How to flip cars legally in Texas

Updated November 4, 2026. General information, not legal advice.

In Texas you can sell fewer than five vehicles of the same type in a calendar year without a dealer license, as long as each one is owned and registered in your name. Sell more, or sell cars that aren't in your name, and you generally need a dealer license, called a General Distinguishing Number (GDN).

The rule

Section 503.021 of the Texas Transportation Code says you can't do business as a dealer without a GDN. Section 503.024 exempts a person who sells or offers to sell fewer than five vehicles of the same type in a calendar year, if they're owned and registered in that person's name.

Note the word "offers": the count can include cars you list, not only cars you sell.

Why you can't skip the title

Reselling a car without putting it in your name is known as title jumping. It doesn't fit the exemption, and it leaves the next buyer exposed. TxDMV says a vehicle must be titled in the buyer's name within 30 days of the sale.

What each flip costs you

1. Take the signed title and file Form 130-U at your county tax office within 30 days.
2. Pay the 6.25% motor vehicle sales tax. The form's instructions base it on the greater of the sales price or 80% of the standard presumptive value, so a very cheap purchase can be taxed above what you paid. Check with your county.
3. Pay the title and registration fees.

That tax comes out of your profit. Run your numbers through the flip profit calculator before you buy.

What happens if you break it

Selling cars as an unlicensed dealer is called curbstoning. The TxDMV disciplinary matrix lists $1,000 per vehicle and/or referral to law enforcement, with a higher tier of $4,000 per vehicle, and notes civil penalties of up to $10,000 per violation.

When to get a license

If you plan to sell five or more a year, plan on a GDN. TxDMV's licensing page covers the requirements. Ask a lawyer or TxDMV about your situation, because the details depend on what you sell and how.

Common questions

How many cars can I sell in Texas without a dealer license?

Fewer than five vehicles of the same type in a calendar year, if each one is owned and registered in your name, under Texas Transportation Code 503.024.

Can I flip a car without putting it in my name in Texas?

No. The exemption only covers vehicles owned and registered in your name, and Texas requires a buyer to title a vehicle within 30 days of the sale.

What is the penalty for curbstoning in Texas?

TxDMV's disciplinary matrix lists $1,000 per vehicle and/or referral to law enforcement for an unlicensed dealer, with a higher tier of $4,000 per vehicle, and notes civil penalties of up to $10,000 per violation.