How to Get a Dealer License in Michigan
In Michigan, dealer licensing runs through the Michigan Department of State (Secretary of State) — Business Regulation Section, Vehicle Dealer Licensing. To get a used car dealer license in Michigan you'll need a registered business, a compliant location, a $25,000 surety bond, and the fees below. Whether you're opening a car lot, going wholesale-only, or starting a buy-here-pay-here operation, this guide walks the Michigan auto dealer license requirements, real costs, and the exact steps — in plain English. Rules change, so verify everything against the Michigan Department of State (Secretary of State) — Business Regulation Section, Vehicle Dealer Licensing's current pages before you file.
- Surety bond
- $25,000
- License term
- One-year term — every dealer license expires December 31 and must be renewed online before then (paper renewals are no longer accepted). A 30-day late-renewal window adds a fee of 50% of the renewal fee; a license expired more than 30 days requires a brand-new original application.
- Sales threshold
- A license is required once you buy, sell, exchange, broker, or lease 5 or more titled vehicles within a 12-month period.
- Pre-licensing
- Yes — pre-licensing vehicle dealer training is required. Sessions cover the Michigan Vehicle Code, dealer duties, recordkeeping, and Secretary of State e-Services, and run virtually via Microsoft Teams at no cost (pre-register with the Business Regulation Section at blrd@michigan.gov). New Class B dealers must also designate someone to attend continuous-education training within 90 days of license issuance, then once every 24 months.
License types in Michigan
| License type | What it covers |
|---|---|
| Class B — Used Vehicle Dealer | The core retail used-car license: buys and sells used vehicles to the public. This is what most independent lots hold. |
| Class A — New Vehicle Dealer | Buys and sells new vehicles under a franchise agreement or contract with the manufacturer (and may also sell used). |
| Class W — Wholesaler | Buys and sells used vehicles only from and to licensed dealers — a wholesaler may not sell to a retail customer. |
| Class D — Broker | For compensation, brings a buyer and seller together, negotiates terms, or displays a vehicle offered for sale. A vehicle auction is a type of broker and needs a Class D. |
| Class C — Used Vehicle Parts Dealer | Acquires late-model major component parts for resale (wholesale or retail) and may dismantle whole vehicles for parts, selling the remainder as scrap. |
| Class R — Automotive Recycler | Buys or acquires late-model major component parts for resale and dismantles whole vehicles for parts, selling the remainder as scrap. |
| Other classes (E, F, G, H) | Distressed vehicle transporter (E), vehicle scrap metal processor (F), vehicle salvage pool (G), and foreign salvage vehicle dealer (H) — specialized salvage/scrap operations. |
What it costs
| Item | Cost | Notes |
|---|---|---|
| Dealer license fee (per class) | $160 / year | $160 annually for each license class (e.g. Class B used-vehicle dealer); most independent lots hold one class. |
| Surety bond (face amount) | $25,000 | Required for Class A, B, and D. The annual premium you actually pay is a fraction of this, based on credit. |
| Dealer plates | $10 each | Class A/B must buy a minimum of 2 plates; additional plates are $10 each (tabs included), allocated by highest monthly inventory. Replacement plates/tabs are $5. |
| Late renewal fee | +50% of renewal fee | Applies during the 30-day late-renewal window after the Dec. 31 expiration. |
| Entity / zoning / municipal filings | Varies | Business entity registration plus local zoning and municipal approval for the lot. |
Step by step
- Register your business entity and secure a location with local zoning/municipal approval.
- Build out a compliant established place of business (150 sq ft office, 1,300 sq ft display for 10+ vehicles, 650 sq ft customer parking, permanent sign, 30+ posted hours, on-site repair facility).
- Obtain the $25,000 vehicle-dealer surety bond (Class A/B/D) and Michigan no-fault fleet insurance for dealer plates.
- Attend the required pre-licensing dealer training (free, virtual via Microsoft Teams — pre-register with the Business Regulation Section).
- Complete and submit the Original Vehicle Dealer License Application and pay the $160 license fee.
- Pass the dealer premises inspection, then buy your dealer plates and set up Secretary of State e-Services for titles (RD-108) and BFS-4 temporary registrations.
Premises & temp tags
Location: Class A/B dealers need a real established place of business: an office of at least 150 sq ft with standard furniture, working utilities, a working restroom, and a business-listed telephone; land of at least 1,300 sq ft to display a minimum of 10 vehicles plus 650 sq ft of customer parking (surfaced and well-lit); a permanent exterior sign showing the dealership name and readable from the road; posted regular hours of at least 30 hours per week (15 of them between 8 a.m. and 5 p.m., Monday–Friday); and a registered repair facility on site to service the type of vehicles sold. Tents, mailboxes, and temporary stands do not qualify.
Temp tags / plates: Dealers issue BFS-4 temporary vehicle registrations to buyers through Secretary of State e-Services (typically valid 15 or 30 days), letting a car be driven legally until the permanent plate and registration are processed on the RD-108.
Michigan-specific things to know
- Michigan requires an on-site registered repair facility for Class A/B dealers — a genuine service bay, not just a sales office — which trips up new independents planning a bare display lot.
- The $25,000 bond is tied directly to your license: if the surety cancels the bond, the Secretary of State summarily suspends the license on the cancellation date.
- Class W wholesalers cannot sell to the public at all — a single retail sale off a wholesale license is a violation; retail requires a Class B.
- Licenses run on a calendar year and always expire December 31 regardless of when you were licensed; miss renewal by more than 30 days and you must start over with a full original application.
Official Michigan resources
- Michigan SOS — Vehicle Dealers ↗
- Michigan SOS — Dealer Manual ↗
- Michigan SOS — Dealer e-Services Login ↗
Michigan dealer license FAQ
How much does a dealer license cost in Michigan?+
Dealer license fee (per class): $160 / year; Surety bond (face amount): $25,000; Dealer plates: $10 each; Late renewal fee: +50% of renewal fee; Entity / zoning / municipal filings: Varies. Plus the $25,000 surety bond (you pay a small annual premium on that, not the full amount).
How big is the dealer bond in Michigan?+
Michigan requires a $25,000 surety bond. Class A, B, and D dealers must maintain a vehicle-dealer surety bond of $25,000. The amount rose from the old $10,000 level; each dealer's bond stepped up to $25,000 at the first renewal after Jan. 23, 2023 (or immediately if the prior bond was cancelled). A cancelled bond summarily suspends the license.
Do you need a physical lot to get a dealer license in Michigan?+
Class A/B dealers need a real established place of business: an office of at least 150 sq ft with standard furniture, working utilities, a working restroom, and a business-listed telephone; land of at least 1,300 sq ft to display a minimum of 10 vehicles plus 650 sq ft of customer parking (surfaced and well-lit); a permanent exterior sign showing the dealership name and readable from the road; posted regular hours of at least 30 hours per week (15 of them between 8 a.m. and 5 p.m., Monday–Friday); and a registered repair facility on site to service the type of vehicles sold. Tents, mailboxes, and temporary stands do not qualify.
How many cars can you sell in Michigan without a dealer license?+
A license is required once you buy, sell, exchange, broker, or lease 5 or more titled vehicles within a 12-month period.
How long is a Michigan dealer license valid?+
One-year term — every dealer license expires December 31 and must be renewed online before then (paper renewals are no longer accepted). A 30-day late-renewal window adds a fee of 50% of the renewal fee; a license expired more than 30 days requires a brand-new original application.
Is dealer training or an exam required in Michigan?+
Yes — pre-licensing vehicle dealer training is required. Sessions cover the Michigan Vehicle Code, dealer duties, recordkeeping, and Secretary of State e-Services, and run virtually via Microsoft Teams at no cost (pre-register with the Business Regulation Section at blrd@michigan.gov). New Class B dealers must also designate someone to attend continuous-education training within 90 days of license issuance, then once every 24 months.
How do temporary tags work for Michigan dealers?+
Dealers issue BFS-4 temporary vehicle registrations to buyers through Secretary of State e-Services (typically valid 15 or 30 days), letting a car be driven legally until the permanent plate and registration are processed on the RD-108.
Data verified 2026-07-17. Requirements change — confirm with the Michigan Department of State (Secretary of State) — Business Regulation Section, Vehicle Dealer Licensing before filing.
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