$25K Michigan Dealer Bond. What It Costs You.

Real-time premium for the $25,000 Michigan Uniform Vehicle Dealer Surety Bond under MCL 257.248. Covers Class A (new), Class B (used), and Class D (broker) licenses — by FICO band, experience, and term.

Filed with the Michigan Department of State Business Licensing Section. Bond increased from $10,000 to $25,000 effective January 23, 2023 (2022 PA 263).

The 2023 Bond Increase: Why Michigan Raised It 2.5×

Michigan's dealer bond had sat at $10,000 since the 1990s. By 2022, a $10,000 recovery ceiling was functionally inadequate — a single failed BHPH deal with outstanding principal, interest, and unpaid title fees could easily exceed the entire bond face, leaving consumers with no practical recourse. Michigan Public Act 263 of 2022 amended MCL 257.248, raising the Uniform Vehicle Dealer Surety Bond to $25,000, effective January 23, 2023.

Two compliance checkpoints followed:

1. New applicants from January 23, 2023 forward were required to file the $25,000 bond at initial application — no grace period.
2. Existing dealers with $10,000 bonds were required to file a rider amendment upgrading the bond to $25,000 at their next annual renewal, no later than December 31, 2023. Dealers who missed this rider had their license suspended by MDOS until the corrected bond was on file.

For Class B used-vehicle dealers, the premium impact was modest: a $10,000 Michigan bond at 2% cost $200/yr; the upgraded $25,000 bond at the same 2% rate costs $500/yr. Even at the higher face amount, Michigan remains one of the least expensive dealer bonding states in the country relative to states like California ($50,000), Texas ($50,000), or Illinois ($50,000).

Michigan Dealer License Classes: Who Files the $25K Bond

Michigan issues ten dealer license classifications (A through W). Only three require the Michigan auto dealer bond. The bond form itself exempts Classes C, E, F, G, R, and W by name. This matters because wholesale dealers (Class W) and repair facilities (Class R) often ask whether they need the bond — they do not.

Source: MCL 257.248 (Michigan Legislature) and the Michigan Department of State Uniform Vehicle Dealer Surety Bond form (michigan.gov/sos).

Michigan Dealer Bond Cost by Credit Score (2026)

Because Michigan's bond face is only $25,000 — roughly half of what California and Texas require — premium dollars are low across every credit tier. The table below shows what to expect on the $25,000 bond for both annual and 2-year terms. See how surety bond costs are calculated for the full methodology.

Compared to the same credit tiers on a $50,000 bond (California, Texas, Illinois), Michigan dealers save $250–$1,500+ per year simply because the face amount is lower. For a full state-by-state comparison, see auto dealer bond cost by state.

Why Michigan Calls It “Secretary of State” (Not DMV)

Michigan is one of only a few states where the Secretary of State — not a separate Department of Motor Vehicles — handles all vehicle-related licensing, titles, and dealer regulation. The Michigan Department of State (MDOS) Business Licensing Section is the agency that issues dealer licenses, accepts the MCL 257.248 bond, and conducts compliance inspections. When surety companies write Michigan dealer bonds, the bond obligee is named as the Secretary of State, not a DMV.

This matters practically in one way: the original executed bond — not a copy, not a fax — must be filed with MDOS Business Licensing Section in Lansing within 30 days of bond issuance. MDOS will not accept electronic copies for the initial filing. The surety delivers the original; the dealer keeps the premium receipt and a certified copy.

The bond runs continuously until canceled. The surety must give MDOS a minimum 30-day written cancellation notice. If coverage lapses, the Business Licensing Section suspends the dealer license automatically — no separate hearing required. This is the primary mechanism that drives dealers to renew on time, and it's why MDOS suspension-for-bond-lapse is more common than most dealers expect heading into their first renewal cycle.

What We See on Michigan Dealer Bond Files

At the $25,000 face amount, Michigan dealer bonds are straightforward to underwrite for most applicants. The cases that slow down or complicate the file fall into two patterns:

• The 2023 rider gap. When the $10K-to-$25K increase took effect, some existing dealers had bonds written on shorter annual terms that expired mid-2023 — before their December renewal. Those dealers needed both a rider on the current term and a new $25K bond at renewal. A small number missed the rider entirely and had their licenses suspended briefly. If you acquired a dealership after January 2023, verify that the bond on file is the current $25K form, not an uncured $10K legacy bond — MDOS occasionally misses these on purchased-license transfers.
• Class B training compliance and the bond application. First-time Class B applicants sometimes arrive at the bond application before completing pre-licensing training. The surety can issue the bond — training is not a bond underwriting condition — but MDOS will not activate the dealer license until the training certificate is on file. The result is a dealer who paid for a bond and can't use it yet. Get your pre-licensing training scheduled before binding the bond so everything lands at MDOS simultaneously.

— Eric Drummond, Licensed Producer, BuySuretyBonds.com

Michigan Motor Vehicle Dealer Licensing: Where the Bond Fits

The $25,000 bond is one step in a multi-requirement application process. Michigan's licensing threshold is modest — anyone selling five or more vehicles per year must be licensed — but the facility and operational requirements are substantive:

1. Establish a compliant place of business. Minimum 150 sq ft office, 1,300 sq ft display area for at least 10 vehicles, 650 sq ft customer parking. Zoning must allow motor vehicle dealership use. Home-based dealerships are not permitted.
2. Complete pre-licensing training (Class B only). Must be completed within 6 months prior to the license application date. A designated individual from each retail location must also complete continuous education dealer training within 90 days of license issuance, then once every 24 months.
3. Secure the $25,000 Uniform Vehicle Dealer Surety Bond. Apply with a licensed surety, pay the premium, receive the original bond. File the original — not a copy — with MDOS Business Licensing Section in Lansing.
4. Obtain no-fault fleet insurance. Michigan requires fleet-type no-fault coverage at a minimum 20/40/10 limit for all vehicles in dealer inventory.
5. Complete fingerprinting and background check. All principals must submit fingerprints through an approved vendor (L-1 Identity Solutions). Form RI-030 criminal history check is part of the packet.
6. Submit the full application packet with $160 fee. Bond, training certificate, fingerprinting receipt, zoning approval, insurance certificate, premises photos, and business registration documents go together to MDOS.
7. Pass pre-license location inspection. MDOS schedules an on-site inspection of the dealership location to verify it meets established-place-of-business requirements before issuing the license.

Michigan dealer licenses are annual, expiring December 31. The bond must stay continuously in force. A bond cancellation mid-year triggers automatic license suspension — the most common reason Michigan dealers contact a surety producer mid-cycle.

Frequently Asked Questions

Michigan Dealer Bond Research — Next Steps

Lock In Your Michigan Dealer Bond Rate

Real quote in minutes from A-rated surety carriers. The $25,000 MCL 257.248 bond at good credit typically runs $375–$625/yr — less than $55/month. No cost until your bond is issued.

Filed with Michigan Department of State Business Licensing Section. Original bond delivered directly to MDOS Lansing.