What is an Michigan Dealer Bond?
Michigan Dealer Bonds are required by The Commonwealth of Michigan Registry of Motor Vehicles to obtain your Dealer license. The MVD Bond amount for the sale of New and used vehicles is set at $10,000. The Auto Dealer bond ensures that the principal shall comply with the conditions of any contract made by such licensee in connection with the sale or exchange of any motor vehicle and shall not violate any of the provisions of law relating to the conduct of the business for which it is licensed.
The State requires a Car Dealer bond for each license you hold:
$10,000 Uniform vehicle dealer surety bond for New and Used Motor Vehicle Dealers, Public Consignment Auction Dealers
Different parts of a bond:
There are 3 parts to a Dealer surety bond. The Principal "YOU", The Surety Company, and the Obligee. The Principal is the business or individual applying for the DMV Surety Bond. The Obligee is the individual or entity requiring the Surety Bond and the Surety Company is the company who provides the Surety Bond coverage.
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Michigan MVD Bond Information and Requirements:
Michigan Dealer Application Packet
The MI Secretary of State’s Dealer Manual and Dealer License Application Packet explain all the requirements to apply for a car dealer license. Make sure you take the time to read over the material—it’ll prevent future setbacks!
When submitting your Dealer License Application Packet be prepared to provide:
• Personal information about all owners, partners, corporate officers, and directors.
• A completed:
o Uniform Vehicle Dealer Surety Bond (Form AR-0026).
o Zoning Approval (REV 2019).
o Municipality Approval (REV 2019).
o Dealer Selection for Designated Branches (REV 2015).
o Repair Facility Application (Form AR-0012).
You can substitute this with an agreement from a local registered repair facility.
• Proof of no-fault fleet insurance.
• Proof of worker’s compensation insurance.
• If you plan on selling new cars (Class A dealer license), your manufacturer(s) franchise agreement(s).
• A copy of the business creation document.
• Your sales tax number.
• Copy of the signed LiveScan Fingerprint Background Check Request (Form RI-030).
o You must make an appointment with and pay a fee to the Michigan State Police (MSP) for your fingerprint scan.
• A check or money order payable to “State of Michigan” for the applicable fees.
• New and used car dealers must have a minimum of 2 dealer plates.
Pay close attention to the instructions in your packet. Depending on what type of dealer you are, you may be exempt from certain requirements.
Mail your completed application packet and applicable fees to:
Michigan Department of State
Business Licensing Section
Lansing, MI 48918
Before receiving your license, your dealership will have to pass an inspection—the application packet includes a list of all business location requirements and information on scheduling an inspection appointment.
Dealer Licensing Fees
Dealer license fees in Michigan are as follows:
• Class A: $75.
• Class B: $75.
• Class C: $160.
• Class D: $75.
• Class E: $75.
• Class F: $75.
• Class G: $75.
• Class R: $160.
• Class W: $75.
• Dealer plates (for all classes): $10 each.