Michigan Auto Dealer License Guide

Your location must meet the established place of business requirements, as required by P.A. 495 of 2004. For a Class A or Class B dealer, the place of business must meet these requirements:

• A permanently enclosed building or structure owned or leased by a dealer, not a residence, tent or temporary quarters
• Contain all books, records and files for the business in an office of at least 150 square feet, equipped with a listed telephone in the business name, standard office furniture, utilities and a restroom
• Must have space of at least 1,300 square feet to display a minimum of 10 vehicles of the kind and type that the dealer is licensed to sell and an additional 650 square feet for customer parking. These areas must be surfaced and well lit during business hours.
• Have an exterior sign with the name of the dealership, permanently affixed to the building or land with letters clearly visible from a highway
• Open at least 30 hours per week
• Class A and Class B dealers are required to provide proper servicing facilities, either by registering as a Motor Vehicle Repair Facility (application included with the dealer application) or by entering into an agreement with a currently registered motor vehicle repair facility within 10 miles of the dealership.

You must provide written verification from the appropriate zoning or municipal authority to certify that your business location meets the applicable requirements

New and used vehicle dealers must have 20/40/10 fleet-type Michigan no-fault insurance. This insurance must specifically cover “any vehicle” or “all vehicles owned.”

Auto Dealer Insurance

There are several types of insurance coverages that are recommended for auto dealers, but the recommended coverage will vary based on your business and personal needs.

If you’d like to learn more about all of the insurance coverages available to you, please read our auto dealer insurance guide.

You’ll need to provide the following documents with your application:

• Fingerprints, which are submitted through Identix along with copies of your business’ Articles of Incorporation or Assumed Name Filing
• Proof of either your own registered repair facility or an agreement with a registered repair facility
• Proof you have at least 2 dealer plates
• Franchise agreement with a manufacturer (new vehicle dealers only)

The cost of an auto dealer bond is a small percentage of the total bond amount. The bond cost varies depending on your financial strength, e.g. personal credit. You can also take a look at our most frequently asked surety bond questions.

• Fill out our online application form to obtain a free bond quote for your auto dealer license. It takes 5 minutes and you will be able to lock your rate for the next 90 days (in case you want to purchase the bond).

The state of Michigan requires all licensed dealers to hold a valid surety bond, so make sure you get bonded before you apply for your license.

Bond Amount Required: $10,000

Fill out your application and submit it with all supporting documentation.

Fees:

• $175 for the license
• $10 for each dealer plate

Mail your application to:
Michigan Department of State Business Licensing and Regulation Division Business Licensing Section
P.O. Box 30018
Lansing, MI 48918