Michigan Auto Dealer Bond— $25,000 -- From $100/Year

Michigan's $25,000 bond amount is relatively low compared to states like California ($50,000), Illinois ($50,000), or New York ($20,000-$100,000). Lower bond amounts mean lower premiums. With excellent credit (750+), Michigan dealers pay just $100-$200 per year -- that's roughly $8-$17 per month. Even with fair credit (620-679), premiums range only $400-$700 annually. The combination of a low bond amount and competitive surety market keeps Michigan among the cheapest states for dealer bonding.

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.

Michigan is one of a handful of states where the Secretary of State (SOS) handles vehicle and driver services instead of a separate DMV. The Michigan Department of State (MDOS), under the Secretary of State, manages all dealer licensing through its Business Licensing Section. When you see references to "Michigan DMV," they mean the Secretary of State. All dealer applications, bonds, and renewals go through MDOS, not a separate DMV agency.

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. This threshold applies to all vehicle types, including cars, trucks, and motorcycles.

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. Class A and D dealers are not required to complete pre-licensing training.

Your license is summarily suspended on the effective date of bond cancellation. You must immediately cease all vehicle sales operations. The surety company must give 30 days written notice to the Michigan Department of State before cancellation takes effect. If your bond lapses more than 30 days, you must apply for a completely new license -- including new application, bond, fingerprints, and all supporting documents.

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. Renewal notices are sent in advance, but it is the dealer's responsibility to renew on time regardless of whether they receive a notice.

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.