Salvage Dealer License
- A salvage motor vehicle has been damaged or is missing a major part causing the cost to repair the vehicle to be higher than the actual cash value of the vehicle before it was damaged. A salvage motor vehicle may be repaired (or “rebuilt”) so that it can be titled as a rebuilt* motor vehicle and registered to operate on public roads. *The blue title issued to a rebuilt vehicle will state on the front of the title that the vehicle has been rebuilt. For more information on title brands, see http://www.txdmv.gov/motorists/buying-or-selling-a-vehicle/title-check-look-before-you-buy, see tab: Title Brands & What They Mean
- A nonrepairable motor vehicle is a vehicle that has been so badly damaged that its only value is as a source of parts or scrap metal. A nonrepairable motor vehicle cannot be repaired or rebuilt. It will always be branded as “nonrepairable.”
- Salvage motor vehicles and nonrepairable motor vehicles are issued special titles by TxDMV that are distinguishable from the blue title issued for regular motor vehicles.
- A salvage or nonrepairable motor vehicle may not be operated on the public roads at any time.
A salvage dealer is engaged in the business of buying, selling, repairing, or rebuilding salvage motor vehicles and nonrepairable motor vehicles.
You must be licensed as a salvage dealer if you:
- buy or sell more than five salvage or nonrepairable motor vehicles in a calendar year; or
- rebuild more than five salvage motor vehicles in a calendar year.
You do not need a salvage dealer license if you:
- buy five or fewer salvage or nonrepairable motor vehicles in a calendar year; or
- rebuild five or fewer salvage motor vehicles in the same calendar year. *However, you may need a used car dealer (GDN) license if you are engaged in the business of selling these rebuilt vehicles.
Salvage Dealer License Endorsements
While there is only a single salvage dealer license, that license is issued with one or more endorsements depending on the type of business activity. The most common endorsements are:
Used automobile dealer endorsement (2) - This endorsement allows you to buy or sell salvage motor vehicles and nonrepairable motor vehicles that have previously been sold to a customer before being damaged. You may also rebuild no more than 5 salvage motor vehicles in a calendar year if you only have this endorsement. If you wish to rebuild more, then add the Salvage vehicle rebuilder endorsement. You may also sell those rebuilt vehicles if you hold an independent dealer or General Distinguishing Number (GDN) license.
Salvage vehicle pool operator endorsement (4) - This endorsement allows a company to conduct auctions where nonrepairable motor vehicles and salvage motor vehicles are sold.
Salvage vehicle rebuilder endorsement (6) - This endorsement allows you to buy and then rebuild salvage motor vehicles so that the vehicle can be titled and registered to lawfully operate on public roads. In order to sell these vehicles after they have been rebuilt, you must also hold an independent dealer or General Distinguishing Number (GDN) license.
Selling Salvage Motor Vehicles and Nonrepairable Motor Vehicles
If you are selling salvage/nonrepairable motor vehicles without repairing them, then the purchaser submits title paperwork to the county tax office.
Selling Rebuilt Salvage Motor Vehicles
If you are selling rebuilt motor vehicles, you need a GDN license to properly submit title paperwork to the county tax office on behalf of the purchaser.
For more information on title brands, see tab: Title Brands & What They Mean
Selling Used Automobile Parts
If you are selling used car parts you may need licensing from Texas Department of Licensing and Regulation (TDLR). More information about the Used Automotive Parts Recycler license and TDLR is available by calling: 800-803-9202 (toll-free in Texas) or 512-463-6599 (locally) or visit: http://www.tdlr.texas.gov/parts/apr.htm
Requirements before Applying for a Salvage Dealer License and Endorsements
- You must have a business location for your salvage operation that is not a residence or apartment complex. Salvage dealers can only operate at their licensed business location.
- You must have a sign and office at your business location where you will maintain the salvage dealer records.
- You must comply with all city, county, and state laws. Compliance with city, county, and state laws governing the salvage business is not only a requirement to obtain a license, but compliance with these laws is required to maintain the license. Check with your local government to determine if there are any special restrictions for operating a salvage business in that jurisdiction.
- You must register for the National Motor Vehicle Title Information System (NMVTIS) program. All salvage dealers are required under federal law to report their vehicle transactions by using NMVTIS. The U.S. Department of Justice is the enforcing agency for the NMVTIS program. TxDMV requires that an applicant provide their NMVTIS number at the time of application and maintain registration during the period of the license. For more information, please refer to the NMVTIS publication, or visit http://www.vehiclehistory.gov/
- You must decide what type of business you will operate and which endorsements you will need to lawfully operate your business. Indicate these on the Salvage Dealer License Application.
- You must obtain certificates and permits to legally operate in Texas:
- Assumed Name Certificate: If you plan on using an assumed name, obtain an assumed name certificate from the proper authority, which is the Texas Secretary of State if you are a corporation or from your county clerk if you are a sole proprietor (individual) or partnership.
- Texas Sales and Use Tax Permit: Photocopy of account status issued by the Texas Comptroller of Public Accounts
- Certificate of Incorporation, Organization, or Partnership: If you are a Corporation or LLC, attach the Certificate of Filing issued by the Texas Secretary of State (SOS), showing that the entity has been formed and approved. Please do not submit your filing documents. Or if your business was formed in another state, attach the Certificate of Authority issued by the Texas SOS showing that the entity has the right to conduct business in Texas.
- Franchise Tax Account Status: If you are a Corporation or LLC, provide a photocopy of current account status issued by the Texas Comptroller of Public Accounts.
License Application Fees, Duration & Renewal, and Submission
The initial salvage dealer license fee is $95 for each endorsement.
TxDMV issues salvage dealer licenses for a one year period. A license and the endorsements may be renewed for one year periods. If unexpired, the cost to renew a license is $85 for each endorsement.
Adding an endorsement to an existing license
The new endorsement must expire at the same time as your existing license. Use the table below to calculate the pro-rated fee needed to add the new endorsement.
|Your existing license expires in how many months?||Pay this fee to add each endorsement|
If you need more information about being a salvage dealer, please call us at (888) 368-4689.
If you have questions regarding the titling of salvage vehicles, please call us at (512) 465-5659.
To file a complaint against a salvage dealer or a person operating as a salvage dealer without a license please submit a complaint form found at: http://www.txdmv.gov/contact-us?tab=5
All salvage dealers are required under federal law to report their vehicle transactions by using the National Motor Vehicle Title Information System (NMVTIS). To increase awareness of the program, TxDMV collects the NMVTIS number from all Salvage Applicants. However, the Department of Justice is the enforcing agency for this program. For further information, please refer to the NMVTIS publication , or visit http://www.vehiclehistory.gov/
For questions regarding Used Auto Parts Recycler licensing, please visit the Texas Department of Licensing and Regulation's website or call toll-free (in Texas): (800) 803-9202 or locally: (512) 463-6599.