Michigan Vehicle Dealer Bond Overview
- Purpose: To guarantee auto dealers and salvors follow all state laws and regulations
- Who Needs It: All motor vehicle dealers that buy, sell, broker or lease 5+ vehicles per year
- Regulating Body: The Michigan Department of State, Business Licensing Section
- Bond Amount: $25,000
- Minimum Price: $250–$500; credit-based
What Is a Michigan Vehicle Dealer Bond?
A Michigan vehicle dealer bond is a financial guarantee that dealers will operate legally. It serves as a safety net for clients and the state if a dealer causes financial harm.
Under Michigan law, new and used vehicle dealers and vehicle brokers (Class A, B and D dealers) need to file a $25,000 surety bond. This includes auction dealers.
Who Needs a Vehicle Dealer Bond?
You must file a motor vehicle dealer bond with the state if you do any of the following within a 12-month period.
- Buy, sell, broker, lease, or deal five or more vehicles
- Purchase, sell, exchange, broker, or deal salvageable parts for five or more vehicles
- Buy five or more vehicles to sell as parts or keep as scrap metal
If you are a used auto parts dealer or wrecker in Detroit, visit our City of Detroit Used Parts Dealer and Wrecking Bond page.
How Much Do Vehicle Dealer Bonds Cost in Michigan?
Michigan auto dealer bond premiums start at $225 per year for the required $25,000 coverage. Your exact premium will be provided after a quick application review. Apply for your free quote now!
SuretyBonds.com offers the lowest available rates from our nationwide provider network with no added fees.
How Does a Michigan Vehicle Dealer Bond Work?
An auto dealer bond creates a financial contract between three parties.
- Principal: The vehicle dealer filing the bond
- Obligee: The Michigan Department of State, Business Licensing Section
- Surety: The surety provider issuing the bond
The bond form requires you to repay any financial losses that occur as a result of fraud, cheating, misrepresentation or sales tax deficiency.
If a judgment is made against the dealership, a claim can be filed on the bond. The surety company will pay valid claims up to the full $25,000 bond amount, which you must then reimburse.
Michigan auto dealer bonds are required for vehicle dealer licensing. If you need a bond for vehicle registration, a separate Michigan certificate of title bond is required.
How Do I Get a Vehicle Dealer Bond in Michigan?
You can apply for your Michigan auto dealer bond online 24/7. You'll need to provide the following information for Department of State approval.
- Dealership name
- Dealership address
- License type (used vehicle dealer or new vehicle dealer)
- Dealer license number, if available
Once your order has been processed, you'll receive your official Michigan surety bond documentation by email.
What is the Michigan uniform vehicle dealer surety bond amount?
Effective January 23, 2023, the Michigan uniform dealer surety bond amount increased from $10,000 to $25,000. All new bonds filed after January 23, 2023 must be issued with the new $25,000 bond amount.
How Fast Can I Get My Bond?
We can quote and deliver your official Michigan auto dealer bond faster than any other surety provider. Orders placed by 4 PM CST Monday-Friday are typically delivered the same day.
How Do I File My Bond?
Submit your auto dealer bond along with your complete license application packet. You can do this online or by mailing everything to this address:
Michigan Department of State
Business Licensing Section
430 West Allegan
3rd Floor
Lansing, MI 48918
How do I renew my auto dealer surety bond?
You must renew your Michigan motor vehicle dealer bond before the current 1-year term expires. Once you pay your SuretyBonds.com renewal invoice, renewal instructions will be emailed to keep your bond and license active with the state.
Can I Get Bonded With Bad Credit?
Bad credit may impact your premium rate, but it doesn’t always disqualify you from getting a bond. We work with a variety of markets to approve 99% of applicants.
How Do I Renew My Auto Dealer Bond?
You’ll need to renew your dealer bond each year. We’ll provide helpful reminders before your bond expires. All you need to do is pay the renewal invoices and your bond will stay active for another year.
How Do I Update My Bond Information?
If the state requires your surety bond to be updated for any reason, contact your surety provider. The most common changes for these bonds include the car dealership's name or address.
If you bought your bond from us, email [email protected] outlining the change request.
How to Get a Vehicle Dealer License in Michigan
Follow these four main steps to open a dealership in Michigan:
- Choose your license classification
- Establish a place of business
- Buy a surety bond
- Get insurance coverage
- Gather all documents and apply
For more details, read our step-by-step guide on how to become a licensed car dealer in Michigan.
