- Agency
- Texas Department of Motor Vehicles, Motor Vehicle Division licensing
- Paperwork
- A license amendment for an ownership change, or a new dealer license if the business entity changes
- The clock
- TxDMV rules describe a 10 day notice of an ownership change
Watch for: Counting the license as an asset that transfers. A buyer who forms a new company usually needs a new license, not yours.
What the license covers
Texas dealers hold a general distinguishing number issued by the Texas Department of Motor Vehicles. It ties the dealer to a business entity, a location and a qualified person.
Because the license describes who runs the business, a sale touches it.
Two paths after a sale
If the same entity stays in place and only the owner changes, TxDMV rules describe a license amendment, with notice due within 10 days of the change.
If the sale is of the business assets to a new company, which is how most small deals work, the rules describe the new entity applying for its own license. Plan on the second path unless TxDMV tells you otherwise.
Plan the timing
A buyer should apply early and ask TxDMV how long approval takes. Selling cars before the license is issued is a serious problem, so closing dates often hinge on it.
Some buyers and sellers use a short transition period so the lot does not sit idle. Ask a dealer attorney whether that is allowed in your case.
Lot, premises and signs
The license is tied to an established place of business that meets state requirements. A buyer who moves the operation or changes the layout may need to prove the new site qualifies.
That is one reason the lot lease matters. Our used car dealership pricing page explains how buyers treat it.
Inventory and titles
Cars on the lot carry titles, liens and floor plan lender interests. Before closing, line up payoff letters and title releases, and list the vehicles with their VINs.
Open title work is another concern. Buyers want to know every sold car has its paperwork filed with the county.
Sales tax and the dealer's other accounts
Dealers also hold a sales tax account and collect tax on vehicle sales. A buyer needs their own account, and you should close yours once the last sale is reported. Ask your CPA about the final report.
Gather before you list
- Your current license and renewal dates
- A list of open deals and pending title work
- Floor plan statements and payoff contacts
- Your lot lease and any sign agreements
Read asset sale or stock sale to see why structure drives the license question. Then ask for a free value check.
This page is general information and not tax or legal advice. Confirm every step with your attorney and TxDMV before you rely on it.