How to Get a Car Dealer's License in Michigan Without a Lot

A Michigan auto dealer license is a legal requirement for anyone buying, selling, brokering, or leasing 5 or more vehicles in a 12-month period within the state. A dealer license allows a licensee to participate in closed auto dealer auctions, as well as sell cars to others. However, Michigan's car lot requirements for license applicants aren't financially feasible for many starting their careers as car dealers.

• A Michigan car dealer lot must have a minimum of 1,300 square feet and be able to fit 10 vehicles. 650 additional square feet must be available for customer parking.

Luckily, one class of license allows you to deal vehicles in Michigan without a car lot. Below, we cover how to get a dealer license without a lot, licensing requirements, the application process, and more.

There are multiple types of car dealer licenses you can get in the state of Michigan. 

Other available classes include: Class C (Used Vehicle Parts Dealer), Class D (Broker), Class E (Distressed Vehicle Transporter), Class F (Vehicle Scrap Metal Processor), Class G (Vehicle Salvage Pool), Class H (Foreign Salvage Vehicle Dealer), Class R (Automotive Recycler).

No, you don't always need a car lot to get an auto dealer's license in Michigan — a Wholesale License (Class W) doesn't require a car lot. 

However, if you want to sell cars to the general public—not just other dealers as a Class W license allows you to — you will need a New Vehicle Dealer License (Class A) or Used Vehicle Dealer License (Class B). Both these license classes require an applicant to have a car dealership with a display lot.

The Michigan Vehicle Code requires all MI dealers to be licensed by the Michigan Department of State. To get licensed as a wholesale dealer, you don't need any dealer training. Instead, you will need to complete the following steps. 

Step 1: Find a Permanent Location

Even though wholesale dealers don't need a car lot, they still need an established place of business per state law (Sections 14 and 248 of the Michigan Vehicle Code). An office location must:

• Be a permanently enclosed building or structure either owned, leased, or rented by a wholesaler.
• Have heat and electricity, and be no less than 8 feet by 8 feet with a door.
• Have all books, records, and files necessary to conduct business. 
• Not have vehicles in any sort of display area. However, the premises may be used to store vehicles purchased by the wholesaler prior to sale to a licensed vehicle dealer.
• Have an exterior sign displaying the dealership's name permanently affixed to the building.

Note that this license type does not require a listed phone number. 

Step 2: Fulfill State Business Licensing Requirements

Individual Owner or Partnership: Register with the County Clerk for the county in which your business is located. You will need to provide a copy of the Assumed Name Filing with your licensing application. 

Corporation or Limited Liability Company: Register with the Michigan Department of Consumer and Industry Services. Your application requires a copy of the articles of incorporation, articles of organization, or certificate of good standing.

Step 3: Get a Sales Tax Number

Apply for a sales tax number through the Michigan Department of Treasury. Their online application allows you to receive your registration in as little as 7 business days. 

Step 4: Obtain Insurance

As of January 2023, wholesale dealers must maintain a minimum of 20/40/10 Michigan no-fault fleet insurance. The insurance certificate must show coverage for either "all-owned vehicles" or "any vehicle." 

Important: while other Michigan dealer license types require a dealer surety bond, a Class W license does not. Just last week, one of our surety agents was putting through a potential client's, Don's*, information to get him a dealer license bond. Don was rather chatty and happened to mention his excitement about getting his wholesale dealer license. After a short chat to confirm the license type he was applying for, Don was thrilled when our agent suddenly quoted him $0—he didn't need a bond for that license type! 

*Name changed for privacy

Step 5: Fill Out a Dealer License Application

The Dealer Application Forms are available online through the Michigan Secretary of State. 

This process requires information regarding your business and personal identification, as well as a zoning and municipal approval form.

Annual license fee: $160

Mail the completed application and applicable fee to: 

Michigan Department of State
Business Licensing Section
Lansing, MI 48918

Step 6: Get Fingerprinted

Fingerprinting is required as part of the background check for this license. You must submit your application before proceeding with fingerprinting.

• Fingerprints are done by appointment only. You can book through the IdentoGO website for Michigan.

Step 7: Pass Your Inspection

Before any license is issued, an inspection of the business location is necessary. The business address listed on the application must meet the established place of business requirements outlined in Section 14 of the Michigan Vehicle Code [MCL 257.14]

A Michigan car dealer lot must be a minimum of 1,300 square feet with the ability to fit 10 vehicles. 650 additional square feet must be available for customer parking.

Michigan is in good company with this condition—41/50 states have a car lot requirement for licensing. However, most other states' pre-license requirements for lots aren't as substantial as Michigan's. For example, California doesn't have a set lot requirement (some dealers have got licensed with a lot that fits 1 car), while states like Texas only require room for 5 vehicles.

Want to know more about becoming a New Vehicle Dealer or Used Vehicle Dealer in Michigan?

Read our Michigan Auto Dealer License Guide. We cover zoning requirements, dealer plates, repair facility requirements, auto dealer surety bonds, and more.