Michigan Auto Dealer Bond$25,000 -- Among the Lowest Nationwide

Michigan's $25,000 dealer bond is one of the most affordable in the nation. Expect to pay $100-$1,000 annually depending on credit. Excellent credit (750+) pays $100-$200 per year (1-2%). Good credit (680-749) costs $200-$400 (2-4%). Fair credit (620-679) ranges $400-$700 (4-7%). Even applicants with challenged credit rarely pay more than $1,000 for this low-amount bond.

Only Class A (New Vehicle Dealer), Class B (Used Vehicle Dealer), and Class D (Vehicle Broker) require the $25,000 surety bond under MCL 257.248. Classes C (Distressed Vehicle Transporter), E (Salvage Vehicle Agent), F (Foreign Salvage Vehicle Dealer), G (Scrap Metal Processor), R (Repair Facility), and W (Wholesaler) do not require a surety bond.

Anyone who buys, sells, brokers, leases, or deals in 5 or more vehicles within a 12-month period must obtain a Michigan dealer license with the required $25,000 surety bond. Operating without a license is a misdemeanor under Michigan law and can result in fines, imprisonment, and civil penalties.

Yes. Class B (Used Vehicle) dealers must complete pre-licensing training within 6 months prior to application. The designated individual (the person responsible for dealership operations) must also complete continuing education within 90 days after license issuance. Training covers Michigan vehicle code requirements, title procedures, and consumer protection laws.

Michigan dealers must be open a minimum of 30 hours per week, 48 weeks per year. At least 15 of those 30 hours must fall between 8:00 AM and 5:00 PM, Monday through Friday. These hours must be posted and maintained consistently. Failure to meet business hour requirements can result in license suspension.

Your license is summarily suspended on the effective date of bond cancellation. You must immediately cease all vehicle sales operations and cannot process any transactions. The surety company must give 30 days written notice to the Michigan Department of State (MDOS) before cancellation takes effect. If your bond lapses more than 30 days, you must apply for a completely new license.

The $25,000 bond protects purchasers, sellers, lessees, financing agencies, and governmental agencies from fraud, cheating, or misrepresentation by the dealer, its employees, agents, or salespeople. It also covers state sales tax or use tax deficiencies. Any injured party can make a claim against the bond up to the full $25,000 amount.

All Michigan dealer licenses expire annually on December 31st. You can renew online through the Michigan Department of State or by mail. The renewal fee is $160. If your license lapses more than 30 days past expiration, you must apply for a completely new license, including a new bond, application, and all supporting documents.

Yes. The Michigan Department of State accepts electronic bond submissions. The bond number must appear on the face of the bond, and the seal and signatures must be visible on all surety bonds whether submitted electronically or by mail. We provide bonds in the format MDOS requires for fastest processing.