Who requires it
Michigan Department of State — Business Licensing Section
License & permit · Michigan
Michigan Motor Vehicle Dealer Bond
Michigan new vehicle dealers, used or secondhand vehicle dealers, and brokers must file a $25,000 surety bond with the Secretary of State. The amount rose from $10,000 to $25,000 effective January 23, 2023. The bond reimburses purchasers, sellers, lessees, financing agencies, and governmental agencies for covered fraud or misrepresentation—and the state for certain sales or use tax deficiencies—after a court judgment or SOS final order.
Common bond amount
$25,000
Fixed statutory amount for new vehicle dealers, used or secondhand vehicle dealers, and brokers (SOS Class A, B, and D). Other dealer classes are outside this amount unless separately required.
How you file
File the Secretary of State–approved bond; renewal certificates allowed
Renewal
Renew with dealer license; 30-day SOS cancellation notice
Who requires it
Applicants and licensees for a new vehicle dealer, used or secondhand vehicle dealer, or broker license under MCL 257.248. The SOS dealer manual and DIFS Bulletin 2023-06-INS identify those credentials as Class A, Class B, and Class D. Other dealer classifications (for example salvage, scrap, or recycler licenses) follow different rules and are not automatically subject to this $25,000 instrument.
How much is required
MCL 257.248(2) sets a fixed $25,000 amount for covered dealer and broker applications. Public Act 224 of 2022 raised the prior $10,000 amount effective January 23, 2023; DIFS Bulletin 2023-06-INS directed existing Class A, B, and D dealers to bring coverage to $25,000 by the first renewal after that date (or immediately if a $10,000 bond was cancelled).
How to get and file it
Have a Michigan-authorized surety execute a bond approved by the Secretary of State, or present a renewal certificate that continues an existing approved bond. File the original with the dealer license or renewal package through Michigan Department of State Business Licensing. Keep the name on the bond aligned with the dealer license file. If a renewal certificate is used, the statute treats the bond as renewed each succeeding year in the same amount. The surety may cancel by giving at least thirty days’ written notice to the Secretary of State and is not liable for breaches after the cancellation effective date. The SOS dealer manual states that bond cancellation summarily suspends the dealer license on the cancellation effective date—cease selling and processing dealer paperwork until a replacement bond is on file.
Cost note
Twenty-five thousand dollars is the required bond amount, not the premium you pay. See bond amount vs premium. Bond amount vs premium →
Requirement checklist
- Covered classifications
- New vehicle dealer, used/secondhand vehicle dealer, or broker (Class A, B, D)
- Required amount
- $25,000 under MCL 257.248(2)
- Covered losses
- Fraud, cheating, or misrepresentation by the dealer or its employees/agents/salespersons; also sales/use tax deficiency for the bonded year after judgment or SOS final order
- Cancellation
- Surety gives SOS at least 30 days’ written notice before cancellation takes effect
Official sources
Related resources
Frequently asked questions
Is every Michigan dealer class bonded at $25,000?
No. The statute ties this bond to new vehicle dealers, used or secondhand vehicle dealers, and brokers. Confirm your SOS classification before assuming the $25,000 amount applies.
When did the amount change from $10,000?
January 23, 2023, under Public Act 224 of 2022. New bonds after that date must be $25,000; existing dealers moved up at the first renewal (or immediately if the old bond cancelled).
Surety basics (not repeated here)
Universal surety concepts explained once—linked here instead of repeated on every state or bond page.
Continue with a Michigan application
Michigan will be preselected. Choose your bond type in the application—we confirm the correct product against your agency form before anything is issued.
Last verified 2026-08-10. This guide is based on verified educational content and official sources.
Agents Ready to Help
Share your agency checklist or bond form and we will confirm the agency, amount, and filing steps before issuing.
Talk to the pro →