Michigan Auto Dealer Bond— $25,000 Bond Under MCL 257.248

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 often pay an estimated $100-$200 per year. With fair credit (620-679), premiums are typically an estimated $400-$700 annually; the surety sets the final price. 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 dealer training, and must ensure a designated individual from each retail sales location completes dealer training once in each 24-month period, according to the Michigan Department of State. Confirm the timing for your application with MDOS. 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.

Class A, B, and D dealers must maintain the $25,000 bond for as long as the license is in effect, so a cancelled bond puts the license at risk of suspension. Stop sales and replace the bond immediately, and confirm the cancellation notice terms on your bond and with the Michigan Department of State.

Michigan dealer licenses expire on December 31 of the last year the license is valid. You can renew through the Michigan Department of State; confirm the current renewal fee for your class with MDOS. A late renewal within 30 days after expiration carries an additional late fee of 50% of the renewal fee, and if you renew more than 30 days after expiration you are treated as a new applicant. 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.

Licensed Michigan motor vehicle dealers. It is required by the Michigan Department of State (MCL 257.248), as part of the dealer license. The bond amount is $25,000 for Class A, B and D dealers.

Request a quote with the form on this page. A licensed agent submits your application to a Treasury-listed surety carrier; once the carrier issues your bond, file it as the requiring agency directs.

We submit complete applications to the carrier promptly; most quotes come back within one business day. The carrier decides approval and the final premium, and you pay only when your bond is issued.

Michigan requires dealers to give every purchaser a copy of each signed document at signing, to complete the reassignment and show the title front and back before delivery, and Class A, B, and D dealers to carry a $25,000 vehicle dealer surety bond. The $25,000 bond applies following the first renewal after January 23, 2023, or if a current $10,000 bond is cancelled. A used or secondhand dealer that uses an inventory lender must also post a BLRD-1 Vehicle Dealer Inventory Loan Notice on the vehicle window.

Sources: Michigan Secretary of State: Dealers · Michigan Dealer Manual, Chapter 1 · Michigan Secretary of State: Dealer Manual, Chapter 3