Uniform Vehicle Dealer Surety Bond - Michigan Department of State
Required for motor vehicle dealers selling new or new and used vehicles in Michigan. Protects consumers and the state from dealer violations of licensing laws.
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Details
About This Bond
The Uniform Vehicle Dealer Surety Bond is a financial guarantee required by the Michigan Department of State for businesses engaged in selling new motor vehicles or both new and used motor vehicles. This bond ensures compliance with state licensing laws and dealer regulations.
Who Needs This Bond: Motor vehicle dealers in Michigan who sell new vehicles or a combination of new and used vehicles must obtain this bond as part of their licensing requirements. This includes franchised new car dealers, independent dealers selling new vehicles, and mixed inventory dealers.
Protection Provided: The bond protects both the State of Michigan and consumers from financial losses resulting from the dealer's failure to comply with licensing laws, fraudulent practices, or violations of dealer regulations. If a dealer engages in prohibited activities or fails to meet their legal obligations, claims can be made against the bond to compensate affected parties.
Bond Details: The bond requires a $25,000 coverage amount and has a one-year term. The bond is renewable annually and must remain active throughout the dealer's licensing period to maintain compliance with Michigan Department of State requirements.
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At a glance
Michigan Auto Dealer Bond Key Facts
Governed by MCL 257.248.
The basics
What Is an Auto Dealer Bond in Michigan?
Yes — Michigan requires an auto dealer bond for most dealers. To get or keep a Class A (new vehicle), Class B (used vehicle), or Class D (broker) dealer license, you must file and maintain a $25,000 surety bond with the Department of State (MCL 257.248). Michigan issues it on the Uniform Vehicle Dealer Surety Bond form. Class C, E, F, G, R, and W dealers are exempt and do not post this bond.
Good to know - Required for Michigan Class A (new vehicle), Class B (used vehicle), and Class D (broker) dealer licenses. Class C, E, F, G, R, and W dealers are exempt from the bond (MCL 257.248).
A surety bond is a promise, backed by a surety company, that you will run your dealership honestly and follow Michigan’s vehicle laws. If you commit fraud, cheating, or misrepresentation in the vehicle business, a harmed buyer, seller, lender, or government agency can file a claim against your bond — up to $25,000.
The bond protects the public and the state, not you. Michigan’s surety pays a claim only after a court judgment or a final Secretary of State order finds fraud, cheating, or misrepresentation. If a claim is paid, you must repay the surety company.
The bond must be on file when you apply, and it must stay active the whole time you hold your license. If your surety cancels the bond, the Department of State summarily suspends your dealer license on the cancellation date, so keeping coverage continuous is essential.
Qualification
What You Need to Qualify for a Michigan Auto Dealer Bond
Approval depends on your dealer license type, required coverage amount, and underwriting factors such as credit.
- You are applying for, or renewing, a Michigan Class A (new vehicle), Class B (used vehicle), or Class D (broker) dealer license with the Department of State — these are the classes that must post a bond.
- You will post a $25,000 surety bond. Class C, E, F, G, R, and W dealers are exempt and do not post this bond.
- Your bond is written by a surety company authorized to do business in Michigan and signed by an agent licensed in Michigan (MCL 257.248).
- You have an established place of business that meets Michigan’s dealer requirements (a permanent site, proper zoning, and required signage).
- You can keep coverage continuous, because if your surety cancels the bond your dealer license is summarily suspended on the cancellation date.
- You will renew your dealer license every year — a Michigan dealer license expires December 31.
Step by step
How to Get an Auto Dealer Bond in Michigan: Step by Step
Confirm your dealer class and bond requirement
Decide which dealer license you need. A $25,000 surety bond is required for Class A (new vehicle), Class B (used vehicle), and Class D (broker) licenses. Class C, E, F, G, R, and W dealers are exempt from the bond.
Get the Vehicle Dealer License Application Packet
Download the Department of State’s Vehicle Dealer License Application Packet and complete the application. The packet lists every form, document, and fee you need for your license class.
Vehicle Dealer License Application PacketBuy your Michigan dealer bond
Buy your $25,000 bond and we handle the paperwork. We issue your surety bond on Michigan’s official Uniform Vehicle Dealer Surety Bond form and provide it for filing with your application — there is no bond form for you to download, complete, or sign.
Prepare your place of business and documents
Set up an established place of business that meets Michigan’s dealer rules — a permanent location with proper zoning and signage — and gather the supporting documents the packet requires, such as your business registration and identification.
File your application, bond, and fee
Submit your completed application, your surety bond, your supporting documents, and your license fee to the Business Licensing Section in Lansing. Your bond must be on file at the time you apply, or the license cannot be issued.
Renew each year and keep your bond active
A Michigan dealer license expires December 31 and must be renewed annually. Keep your surety bond continuous — if it lapses or the surety cancels it, your license is summarily suspended on the cancellation date.
Paperwork
Michigan Dealer Bond Forms & Documents
The application, instructions, and fee schedule for a Michigan dealer license — you complete and submit this.
View formMichigan’s official $25,000 dealer bond form — we issue and file this for you; you do not fill it out yourself.
View formReference guide to license classes, the bond requirement, fees, and renewal.
View formYou'll also need
Cost
How Michigan Auto Dealer Bond Pricing Works
You do not pay the full $25,000. That figure is the coverage — the most a valid claim can collect. You pay a premium, which is a small percentage of the bond amount.
Your premium is set by underwriting, mostly your personal credit. Well-qualified applicants pay a low rate; higher-risk applicants pay more. The premium is separate from Michigan’s license and dealer plate fees.
Worked example
Michigan sets the dealer bond at $25,000. You do not pay $25,000 — you pay a premium, often a small percentage of the bond amount for well-qualified applicants. Your exact rate depends on underwriting, mainly your credit. Start a quote to see your price.
Filing
Filing Information
Michigan Department of State — Business Licensing Section
Filing notes
Your surety bond must be filed with the Department of State at the time you file your dealer license application. A Class A, B, or D dealer license cannot be issued without it (MCL 257.248).
The bond must be written by a surety company authorized to do business in Michigan and signed by an agent licensed in Michigan. Keep coverage continuous — if the surety cancels the bond, your dealer license is summarily suspended on the effective date of the cancellation.
We issue your bond on Michigan’s official Uniform Vehicle Dealer Surety Bond form and provide it for filing with your application packet — there is no bond form for you to complete or sign. Submit your completed application, bond, and fee to the Business Licensing Section in Lansing.
FAQ
Michigan Auto Dealer Bond FAQ
For most dealers, yes. A $25,000 surety bond is required to get or keep a Class A (new vehicle), Class B (used vehicle), or Class D (broker) dealer license (MCL 257.248). Class C, E, F, G, R, and W dealers are exempt.
The bond amount is $25,000 for every dealer class that must post one (Class A, B, and D). You pay a premium — a small percentage of that amount — not the full $25,000.
Class C (used vehicle parts), E, F, G, R (automotive recycler), and W (wholesaler) dealers do not post this bond. The bond applies to Class A, Class B, and Class D dealers.
The "Uniform Vehicle Dealer Surety Bond." We issue this bond for you and provide it for filing with your application — there is no bond form for you to complete.
You pay a premium, not the full $25,000. The premium is a small percentage of the bond amount, based mainly on your credit. Start a quote to see your rate.
A Michigan dealer license expires December 31 and is renewed each year, and your bond must stay active the whole time. You can buy a 1, 2, or 3 year term. Keep coverage continuous so your license is not suspended.
Yes. Your surety bond must be filed with the Department of State at the time you file your application. A Class A, B, or D dealer license cannot be issued without it.
If your surety cancels the bond, the Department of State summarily suspends your dealer license on the effective date of the cancellation. Keep coverage continuous and renew on time to avoid a suspension.
Sources
Last verified 2026-07-01. Requirements change - confirm current details with Michigan Department of State — Business Licensing Section before you file. This page is informational and not legal advice.
FAQ
Michigan Auto Dealer Bond Questions
The cost of a Michigan auto dealer bond is usually a small percentage of the state-required bond amount. Your exact premium depends on the bond amount, license type, business details, and underwriting factors such as credit.
Many auto dealer bonds can be issued the same day after you complete the application. Larger bond amounts or applications that need underwriting review may take longer.
Requirements vary by license type, but most Michigan auto dealers need to complete a short application and purchase the bond amount required by the state before their license can be issued or renewed.
Often, yes. Many states have separate bond requirements for wholesale, retail, broker, or other dealer license types. Choose the bond that matches your Michigan license instructions.
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AutoDealersBond.com is operated by Shield Liability Insurance Agency, a California and Texas licensed insurance agency (CA License #6018195, TX License #3446536). Shield Liability Insurance Agency is not an insurance carrier and does not underwrite bonds or insurance policies. Bond and coverage availability, pricing, and issuance are subject to carrier underwriting approval, eligibility, applicable state requirements, and policy or bond terms. Availability varies by state.
