How to get a dealer license in Michigan

MCL 257.248(5): 'A person shall not carry on or conduct the business of buying, selling, brokering, leasing, negotiating a lease, or dealing in 5 or more vehicles of a type required to be titled under this act in a 12-month period unless the person obtains a dealer license from the secretary of state authorizing the carrying on or conducting of that business.' Used car sellers apply for a Class B used vehicle dealer license.

• Class A, new vehicle dealer: Dealers who buy and sell new vehicles under a franchise agreement or contract with the manufacturer.
• Class C, used vehicle parts dealer: Businesses that acquire late model major component parts for resale at wholesale or retail, and may dismantle whole vehicles for parts and sell the rest as scrap.
• Class D, broker: People who, for pay, bring buyers and sellers together without holding title to the vehicle. Anyone who conducts a vehicle auction needs this license.
• Class E, distressed vehicle transporter: Businesses that buy, transport and sell vehicles only to Class C, F or R dealers.
• Class F, vehicle scrap metal processor: Businesses that process vehicles into scrap metal by shredding, shearing, fragmenting or baling.
• Class G, vehicle salvage pool: Businesses that store and display damaged or distressed vehicles for insurance companies.
• Class H, foreign salvage vehicle dealer: Dealers licensed in another state who deal at wholesale in salvageable parts or late model distressed vehicles in Michigan.
• Class R, automotive recycler: Businesses that buy late model major component parts for resale at wholesale or retail, and may dismantle whole vehicles for parts and sell the rest as scrap. MDOS describes Class C the same way.
• Class W, wholesaler: Businesses that buy and sell used vehicles only from and to licensed dealers. They must buy or sell at least 24 vehicles a year to keep the license.
• Salvage Vehicle Agent license: People who buy salvage or scrap titled vehicles at an auction. Class C and R dealers also need it.
• Installment seller license (Michigan Department of Insurance and Financial Services): Dealers who sell passenger vehicles or motor homes with two or more scheduled payments or deposits. It costs $30 a year and expires June 30.

Surety bond. A $25,000 Uniform Vehicle Dealer Surety Bond (form AR-0026) for Class A, B and D dealers (MCL 257.248(2)). Classes C, E, F, G, H, R and W do not need it. Dealers with an older $10,000 bond had to move to $25,000 at the first renewal after January 23, 2023, or sooner if that bond was canceled.

Insurance. Class A and B dealers need 20/40/10 fleet-type Michigan no-fault insurance covering 'any vehicle' or 'all owned vehicles,' shown on an ACORD 25 certificate in the exact business name. Class W dealers need it only if they request dealer plates, and Class C and R dealers need workers' compensation insurance.

Place of business. MCL 257.14(2) requires a Class A or B dealer to have a permanently enclosed building that is not a residence, tent or temporary quarters, with an office of at least 150 square feet that has office furniture, working utilities, a restroom and a phone in the business name. The site needs at least 1,300 square feet to display 10 vehicles plus 650 square feet of customer parking, surfaced and well lit. It needs a permanent exterior sign visible from the roadway and posted hours of at least 30 a week for 48 weeks a year, with 15 of those hours between 8 a.m. and 5 p.m. Monday to Friday. It needs an on-site registered repair facility or a written servicing agreement with one within 10 miles, plus zoning and municipal approval. Dealers may not share space or resources to meet these rules, a separate license is needed to sell at retail or open a location in another county, and MDOS inspects the site before issuing the license.

Background check. Each owner, partner, officer and director listed on the application must be fingerprinted through Livescan, which lets MDOS review criminal history from the Michigan State Police and the FBI. The application packet says MDOS sends fingerprint instructions after it receives the application, so do not get fingerprinted before then. The application also asks about arrests or convictions in the past ten years and five years of work history.

Pre-license education. Required. Approved courses and details.

1. Attend free pre-licensing dealer training within 6 months before you apply, and register by email at [email protected].
2. Set up a location that meets MCL 257.14, with a registered repair facility or a servicing agreement within 10 miles.
3. Have your local zoning and municipal officials sign the Dealer Zoning Form and Dealer Municipality Approval Form no more than 90 days before MDOS receives your application.
4. Buy a $25,000 Uniform Vehicle Dealer Surety Bond on form AR-0026.
5. Get 20/40/10 fleet no-fault insurance and an ACORD 25 certificate in the business name.
6. Submit the Original Vehicle Dealer License Application (AR-0032) online or by mail, with your business filing, the $160 fee and $10 for each dealer plate (at least 2).
7. Get fingerprinted when MDOS sends instructions, and pass the pre-license inspection.
8. Within 90 days after the license is issued, have a designated individual complete dealer training.

Official forms:

• Original Vehicle Dealer License Application (in the application packet), AR-0032
• Uniform Vehicle Dealer Surety Bond (in the application packet), AR-0026
• Dealer Zoning Form and Dealer Municipality Approval Form (in the application packet)
• Vehicle Dealer Supplemental Location License Application (AR-0066)
• Application for Additional or Replacement Dealer Plates or Tabs (AR-0036)
• Vehicle Dealer License Change of Name and/or Change of Address Application (AR-0068)

A Class B used dealer needs at least 1,300 square feet to display 10 vehicles plus 650 square feet of customer parking. A Class W wholesaler needs only an office of at least 8 by 8 feet and may not display vehicles there, but it may buy from and sell to licensed dealers only.

Dealer-only auctions require a dealer license to buy, and MDOS says only a licensed Salvage Vehicle Agent may buy salvage or scrap titled vehicles at an auction. AuctionACCESS (auctionaccess.com), accepted at over 400 auction marketplaces in the US and Canada, limits membership to licensed vehicle dealers and their authorized representatives.

Licenses expire December 31. Renew through e-Services at least 30 days before expiration, and MDOS may renew for up to 4 years at $160 a year. A renewal filed within 30 days after expiration costs 150% of the normal fee, and after 30 days you must apply as a new dealer. MDOS will not renew unless the dealer bought or sold more than 5 vehicles in the prior 12 months, and Class B dealers need a designated individual to complete continuing education every 24 months.

This is general information, not legal advice. Rules and fees change, so confirm the details with the Michigan Department of State (MDOS), Business Licensing Section before you apply. Last verified October 20, 2026.

Planning the business side too? Read how to start a car dealership. Used cars you offer for sale need an FTC Buyers Guide in the window. Selling your own car instead? See how to sell a car in Michigan.