How to Become a Texas Star Dealer

Texas Star is the shorthand term used for automobile dealership registered with the Texas Automobile Dealers Association. The TADA is an organization, aligned with the TIADA (Texas Independent Automobile Dealers Association) that represents automobile dealer interests in legal affairs, including those involving the legislature. TADA membership is specific to new car dealers; TIADA membership focuses on used car dealers. The first step in becoming a Texas Star dealer requires registering with the Texas Department of Transportation and entering into a franchising deal with a manufacturer.

Instructions

1

Acquire a General Distinguishing Number (GDN), which requires a permanent place of business with enough space to show at least five vehicles at once and signage in accordance with other regulations. A separate GDN is needed if the dealership intends to sell motor vehicles other than new or used cars. A GDN costs $500 for first time registration and $200 for renewal. The forms can be found online.

2

Enter a franchise agreement with an automobile manufacturer to sell new cars. Individual manufacturers have specific requirements in order to sell their vehicles and must be contacted about the possibility of franchising the dealership.

3

Obtain a license from the Office of Consumer Credit Commissioner (OCCC). This license is required to handle all matters dealing with motor vehicle financing. Forms can be found on the OCCC website. All forms needed are contained in the Motor Vehicle Sales Finance Licensing Kit.

4

Apply as a dealership with the Texas Department of Transportation. This requires filling out application forms. Application forms are not yet available online and must be requested from the department. The GDN, OCCC license, franchise agreement and other requirements are all needed in order for the application to be accepted.

5

Once the franchise is licensed and established, contact the Texas Automobile Dealers Association with regard to becoming a Texas Star dealer. Information can be found on the TADA website. It also can be requested by mail. Dealer information and photographs are required. TADA will ultimately decide whether or to admit the dealership into the association.

The TADA can also often offer helpful information on the process necessary to establish a franchise and be approved as an auto dealer in Texas.