Tex. Codes » Transportation Code · TITLE 7. VEHICLES AND TRAFFIC · SUBTITLE A. CERTIFICATES OF TITLE AND REGISTRATION OF VEHICLES · CHAPTER 503. DEALER'S AND MANUFACTURER'S VEHICLE LICENSE PLATES
Texas Codes

Tex. Transp. Code § 503.033 (2026)

Security Requirement

✓ current as of May 2026
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Sec. 503.033. SECURITY REQUIREMENT.

(a) The department may not issue or renew a motor vehicle dealer general distinguishing number or a wholesale motor vehicle auction general distinguishing number unless the applicant provides to the department satisfactory proof that the applicant has purchased a properly executed surety bond in the amount of $50,000 with a good and sufficient surety approved by the department.

(b) The surety bond must be:

(1) in a form approved by the attorney general;

(2) conditioned on:

(A) the payment by the applicant of all valid bank drafts, including checks, drawn by the applicant to buy motor vehicles; and

(B) the transfer by the applicant of good title to each motor vehicle the applicant offers for sale.

(c) Repealed by Acts 2011, 82nd Leg., R.S., Ch. 1290, Sec. 44(a)(3), eff. September 1, 2011.

(d) A person may recover against a surety bond if the person obtains against a person issued a motor vehicle dealer general distinguishing number or a wholesale motor vehicle auction general distinguishing number a judgment assessing damages and reasonable attorney's fees based on an act or omission on which the bond is conditioned that occurred during the term for which the general distinguishing number was valid.

(e) The liability imposed on a surety is limited to:

(1) the amount:

(A) of the valid bank drafts, including checks, drawn by the applicant to buy motor vehicles; or

(B) paid to the applicant for a motor vehicle for which the applicant did not deliver good title; and

(2) attorney's fees that are incurred in the recovery of the judgment and that are reasonable in relation to the work performed.

(f) The liability of a surety may not exceed the face value of the surety bond. A surety is not liable for successive claims in excess of the bond amount regardless of the number of claims made against the bond or the number of years the bond remains in force.

(g) A dealer shall post, adjacent to and in the same manner as the dealer's general distinguishing number is posted, notice of the surety bond and the procedure by which a claimant may recover against the surety bond. The department by rule may prescribe the form of the notice required under this subsection.

(h) The department shall publish on the department's Internet website:

(1) the procedure by which a claimant may recover against a surety bond; and

(2) the department's contact information.

(i) This section does not apply to a person licensed as a franchised motor vehicle dealer by the department.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995. Amended by Acts 1997, 75th Leg., ch. 755, Sec. 1, eff. Sept. 1, 1997.

Amended by:

Acts 2011, 82nd Leg., R.S., Ch. 1290 (H.B. 2017), Sec. 28, eff. September 1, 2011.

Acts 2011, 82nd Leg., R.S., Ch. 1290 (H.B. 2017), Sec. 44(a)(3), eff. September 1, 2011.

Acts 2021, 87th Leg., R.S., Ch. 493 (H.B. 3533), Sec. 1, eff. September 1, 2021.

Notes of Decisions
Cited in 16 cases, 1998–2008 · leading case: Gramercy Ins. Co. v. MRD Investments, Inc., 47 S.W.3d 721 (Tex. App. 2001).
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Gramercy Ins. Co. v. MRD Investments, Inc., 47 S.W.3d 721 (Tex. App. 2001). · cites it 5× “See Tex. TRAns. Code Ann. § 503.033 (b)(2)(A).”
Gramercy Ins. Co. v. Auction Fin. Prog., Inc., 52 S.W.3d 360 (Tex. App. 2001). · cites it 4× “Gramerey’s first three *362 issues require a determination of (i) whether the checks involved in this case were drawn to buy motor vehicles or to repay funds advanced in connection with floor plan financing agreements, and (ii) whether the floor plan financing agreements in this…”
Gramercy Ins. Co. v. Arcadia Fin. Ltd., 32 S.W.3d 402 (Tex. App. 2000). · cites it 6× “See Tex. Trans.Code Ann. § 503.033 (Vernon 1999).”
Old Repub. Sur. Co. v. Bonham State Bank, 172 S.W.3d 210 (Tex. App. 2005). · cites it 4× “Tex. Transp. Code Ann. § 503.033 (a) (Vernon 1999).”
West v. Triple B Servs., LLP, 264 S.W.3d 440 (Tex. App. 2008). · cites it 2× “Triple B also points to Texas Transportation Code section 503.033, which provides for the recovery of attorney’s fees in addition to damages against a surety, but expressly limits the surety’s liability by providing that it “may not exceed the face value of the surety bond.”
Gramercy Ins. Co. v. Arcadia Fin. Ltd., 96 S.W.3d 320 (Tex. App. 2001). · cites it 4× “See Tex. Transp.Code Ann. § 503.033 (West 1999).”
Lawyers Sur. Corp. v. Riverbend Bank, N.A., 966 S.W.2d 182 (Tex. App. 1998). · cites it 3× “Tex. TraNSP. Code Ann. § 503.033 (b)(2) (Vernon 1998).”
Davis v. First Indem. of Am. Ins. Co., 56 S.W.3d 106 (Tex. App. 2001). “6686, now Tex. Transp. Code Ann. § 503.033 (Vernon 1999).”
S. Ins. Co. v. ADESA AUSTIN, 239 S.W.3d 423 (Tex. App. 2007). · cites it 3× “See Tex. Transp. Code Ann. § 503.033 (a); see also Old Rep.”
Gramercy Ins. Co./Arcadia Fin. Ltd. v. Arcadia Fin. Ltd./Gramercy Ins. Co. (Tex. App. 2001). · cites it 5× “See Tex. Transp. Code Ann. § 503.033 (West 1999).”
Old Repub. Sur. Co. v. GAC-MD, Inc. D/B/A German Auto Ctr. (Tex. App. 2004). · cites it 3× “See Tex. Transp. Code Ann. § 503.033 (West 2003).”
Old Repub. Sur. Co. v. GAC-MD, Inc. D/B/A German Auto Ctr. (Tex. App. 2004). · cites it 2× “See Tex. Transp. Code Ann. § 503.033 (West 2003).”
Show all 16 citing cases →
— Tex. Transp. Code § 503.033(a) — 2 cases
Gramercy Ins. Co. v. MRD Investments, Inc., 47 S.W.3d 721 (Tex. App. 2001). “See Tex. TRAns. Code Ann. § 503.033 (b)(2)(A).”
Gramercy Ins. Co. v. Arcadia Fin. Ltd., 32 S.W.3d 402 (Tex. App. 2000). “See Tex. Trans.Code Ann. § 503.033 (Vernon 1999).”
— Tex. Transp. Code § 503.033(b)(2)(B) — 1 case
Gramercy Ins. Co. v. Arcadia Fin. Ltd., 96 S.W.3d 320 (Tex. App. 2001). “See Tex. Transp.Code Ann. § 503.033 (West 1999).”
— Tex. Transp. Code § 503.033(d) — 2 cases
Gramercy Ins. Co. v. Arcadia Fin. Ltd., 96 S.W.3d 320 (Tex. App. 2001). “See Tex. Transp.Code Ann. § 503.033 (West 1999).”
Gramercy Ins. Co. v. Arcadia Fin. Ltd., 32 S.W.3d 402 (Tex. App. 2000). “See Tex. Trans.Code Ann. § 503.033 (Vernon 1999).”
— Tex. Transp. Code § 503.033(e) — 2 cases
West v. Triple B Servs., LLP, 264 S.W.3d 440 (Tex. App. 2008). “Triple B also points to Texas Transportation Code section 503.033, which provides for the recovery of attorney’s fees in addition to damages against a surety, but expressly limits the surety’s liability by providing that it “may not exceed the face value of the surety bond.”
Gramercy Ins. Co. v. Arcadia Fin. Ltd., 32 S.W.3d 402 (Tex. App. 2000). “See Tex. Trans.Code Ann. § 503.033 (Vernon 1999).”
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