You Need an Auto Dealer Bond in Michigan

If you sell more than 5 cars in one year (defined as the last 12 months) in the state of Michigan, then you are required by the Michigan Department of State to be licensed as an auto dealer. This applies to both new and used car dealers. As part of the licensing requirement, dealers are required to obtain a $25,000 Vehicle Dealer Bond, also known as an auto dealer bond. We’re familiar with the licensing process in Michigan and have helped hundreds of Michigan dealers get bonded. Get started with our three minute form process today to obtain an instant quote.

Example car dealership

How much does it cost?

Our prices for a $25,000 Michigan Vehicle Dealer bond starts at $200 for a 1 year bond. The price is largely based on the applicant’s credit score. Generally speaking, a higher credit score will result in lower prices. In some cases, a dealer’s previous work experience can result in a discount for bond prices. There is no minimum credit score requirement to get an auto dealer bond in Michigan.


Michigan Auto Dealer Bond FAQ

Are there other types vehicle bonds in Michigan?

No. The $25,000 Vehicle Dealer Bond listed above is the only bond you need to worry about for getting licensed as a used or new auto dealer. It is sufficient to cover all your license bonding requirements.

Is a credit check needed for this bond?

Yes, but it won’t impact your credit score. For Michigan auto dealer bonds, insurance companies will conduct a soft credit check to evaluate your eligibility and determine pricing. However, this type of credit check does not affect your credit score negatively. It is used solely to assess bond eligibility and pricing, without any impact on your credit history.

Can I get a Michigan auto dealer bond with poor credit?

If your credit score is below 650, it may be classified as "poor" credit. Fortunately, we partner with insurance companies that specialize in providing coverage to this market segment. Contact us if you have less than ideal credit. We'll help you obtain a Michigan auto dealer bond by shopping your application with our insurance partners. Our team has helped numerous individuals with imperfect credit secure an Michigan Vehicle Dealer bond.

Is there another name for this bond?

Yes. This is officially known as a “Vehicle Dealer Bond”, as named by the Michigan state government, but this is also known colloquially as an “auto dealer bond” or a “motor vehicle dealer bond”. The three are used interchangeably.

How long does it take to get bonded?

Our goal is to offer a same-day bonding service in most situations. Once we receive a quote from our insurance partners, your pricing is set, and the process can be completed immediately. We're committed to working hard, even on weekends, to expedite your bonding procedure. Our phone lines are open every day from 9:30 am to 9:30 pm CST, and if we're unable to answer your call, we strive to return your call within 30 minutes.

How can I avoid claims against my bond?

You can minimize chances of bond claims by adhering to the auto dealer guidelines in the state of Michigan. Most of this is just conducting business in an honest and transparent manner with the customer’s interest in mind. Concretely, this involves paying the appropriate fees and taxes related to vehicle sales and providing valid car titles to customers. By submitting your bond, you confirm that you'll fulfill all legal requirements associated with operating an auto dealer business in Michigan.