What are Michigan Motor Vehicle Dealer Surety Bonds?
Michigan Motor Vehicle Dealer Surety Bonds protect any purchaser, seller, financing agency or governmental agency against any monetary loss caused through fraud, cheating or misrepresentation by the principal (vehicle dealer) in the course of business. These bonds also guarantee that the principal complies with all applicable state regulations and industry standards.
If the principal does not comply with the terms of the bond, a claim can be filed with the surety company for relief. If the claim is valid, the surety will pay up to the penal sum of the bond to resolve the claim. The principal is then required to reimburse the surety for all monies paid out, including any attorney fees incurred by the surety in the defense of the claim.
Who is required to have a Michigan Motor Vehicle Dealer Surety Bond?
In the state of Michigan, those who conduct the buying, selling, brokering, leasing, negotiating a lease for, or dealing of 5 or more vehicles in a 12 month period are required to obtain a dealer license.
Dealers who have license types Class A, Class B or Class D are required to submit a $10,000 surety bond as part of their licensing requirements to the Michigan Department of State, Traffic Safety Programs Division – Business Licensing Section. All other license types do not require a bond.
How do I get my Michigan Motor Vehicle Dealer License?
Anyone who wishes to become a vehicle dealer must submit a completed application to the Michigan Secretary of State. The following are a list of items that may be required along with your application. Please consult with the Secretary of State office for the exact requirements needed for your license type.
- Payment of all applicable fees
- Fingerprint card
- Sales tax number
- Zoning and municipal approval forms
- Fleet insurance and workers’ compensations insurance if applicable
- Complete the pre-licensure dealer training program if applicable
- $10,000 surety bond
Not submitting the required items or submitting an incomplete application will delay the processing of the dealer license application.
Allow 30 days from receipt of the completed application for processing.
What is the fine print on Michigan Motor Vehicle Dealer Bonds?
Michigan Motor Vehicle Dealer Surety Bonds are filed with the Michigan Department of State and renew on an annual basis. The bond term is continuous and remains in full force and effect until canceled. The surety can cancel the bond at anytime by providing a 30-day written notice to the Secretary of State prior to the effective cancelation date.
The aggregate liability of the surety will not exceed the penal sum of the bond in any event.
How are Michigan Motor Vehicle Dealer Bonds purchased?
The first step is to complete our quick online application for your free, no obligation bond quote. Submission takes only five minutes, and our underwriting staff will be in contact with you within a couple of hours with pricing. If you prefer to speak with our knowledgeable staff, please call 1-866-722-7873 and one of our Underwriters will assist you in applying for your bond.
After you receive approval, you must sign an indemnity agreement with the surety and provide payment for your bond premium. In most cases, we can issue bonds the same day we receive your signed documents and payment.
How much do Michigan Motor Vehicle Dealer Surety Bonds cost?
Michigan Motor Vehicle Dealer Surety Bonds are subject to underwriting, and the price you will pay depends on a review of your personal credit report. Pacific Surety is proud to offer a variety of approvals, with rates starting at $100 for well qualified applicants. The process typically takes just a few hours from quote to issuance of the bond, and we have the ability to beat any competitors pricing. To find out how much your Michigan Motor Vehicle Dealer Surety Bond is going to cost, please complete our online application for your free, no obligation price quote.
Can I get a Michigan Motor Vehicle Dealer Surety Bond with bad credit?
Pacific Surety offers a wide range of approvals, regardless of credit, for Michigan Motor Vehicle Dealer Surety Bonds. With our strong surety relationships, we have the ability to approve 99% of applicants regardless of how bad their credit is, and our knowledgeable underwriting staff will work with you to ensure you receive the lowest possible pricing for your bond. To see what rate you will qualify for, please contact us or complete our online application for your free, no obligation price quote.