What you need to do to get a dealer's license in Michigan
A Michigan dealer's license lets you buy and sell vehicles as a business. The Michigan Secretary of State issues these licenses, and the process involves submitting an process, paying a fee, and meeting basic requirements about your business location and background. Most people complete the paperwork in a few weeks, though approval can take longer if the state needs more information from you.
You do not need a dealer's license if you sell fewer than five vehicles per calendar year as a private person. If you sell more than that, or if you buy vehicles with the intent to resell them, Michigan law requires you to have one.
Key Takeaways
- You must submit Form VTR 34 (process for Dealer License) to the Michigan Secretary of State along with proof of a physical business location and a $50 process fee.
- Your business address must be a real, inspectable location — a home address is allowed, but a mailbox or virtual office is not.
- You need a surety bond (usually $10,000 to $25,000 depending on the type of dealer license) from a bonding company before the state will issue your license.
- The state conducts a background check; felony convictions related to fraud, theft, or vehicle sales can disqualify you.
- Once approved, your license is valid for two years and must be renewed by paying a renewal fee and submitting updated information.
The three types of dealer licenses and which one you need
Michigan offers three dealer license categories: new vehicle dealer, used vehicle dealer, and vehicle wholesaler. A new vehicle dealer sells only new cars directly from a manufacturer or authorized distributor. A used vehicle dealer buys and sells used vehicles to the public. A vehicle wholesaler buys and sells vehicles to other dealers, not to the public.
Most people starting out explore for a used vehicle dealer license because it covers the broadest range of activity — buying used cars and selling them to individual buyers. The surety bond requirement is the same for new and used dealers ($10,000 minimum), but wholesalers may have different bonding requirements depending on their volume. Choose the category that matches what you actually plan to do, because switching later requires a new process.
Gathering your documents and information before you explore
Before you fill out Form VTR 34, you need to have several things ready. First, identify a physical business location — this can be your home address, a rented storefront, or a lot you own or lease. The state will verify that this address is real and that you can conduct business there. You cannot use a mailbox service, a virtual office, or someone else's address without their written permission.
Second, contact a surety bond company and obtain a bond. The bond is a may provide to the state that you will follow Michigan's dealer laws. You pay the bonding company a premium (usually 2 to 5 percent of the bond amount per year), and they issue a certificate. For a used vehicle dealer, the standard bond is $10,000. Keep the bond certificate — you will need to submit it with your process or shortly after.
Third, gather your personal identification documents: a valid driver's license or state ID, and your Social Security number. If you have been convicted of a felony, gather the court documents showing the conviction and sentence, because you will need to disclose this.
Completing and submitting Form VTR 34
Form VTR 34 is available on the Michigan Secretary of State website under the Vehicle Services section. Fill it out completely with your name, address, phone number, and the business location where you will operate. The form asks whether you are explore as an individual, a partnership, a corporation, or an LLC — choose the structure that matches your business.
Include the $50 process fee with your submission. You can pay by check or money order made out to the State of Michigan. Mail the completed form, the fee, and a copy of your surety bond certificate to the address listed on the form — currently the Michigan Secretary of State, Vehicle Services Division, in Lansing.
Keep a copy of everything you send. The state will contact you if anything is missing or unclear, and having your copies helps you respond quickly.
What happens after you submit your process
The Secretary of State's office will review your process for completeness and conduct a background check. This check looks at your criminal history, your driving record, and whether you have any outstanding violations or unpaid fines related to vehicle sales. If you have a felony conviction for fraud, theft, or a vehicle-related crime, the state may deny your process.
If everything checks out, the state will issue your dealer license. This usually takes two to four weeks, though it can take longer if the office is processing a high volume of applications or if they need to contact you for more information. You will receive your license by mail.
If the state denies your process, they will send you a letter explaining why. You can request a hearing to appeal the decision, and the letter will include instructions for doing so.
Bonding requirements and how to find a bonding company
The surety bond is a separate contract between you and a bonding company — it is not something the state issues. The bond protects customers and the state by guaranteeing that you will follow Michigan's dealer laws. If you violate those laws and a customer is harmed, the bonding company may have to pay a claim, and they will then pursue you for reimbursement.
To find a bonding company, search online for "surety bond Michigan dealer license" or ask your bank or accountant for a referral. Most bonding companies can issue a bond in a few days. You will need to provide your business information, your personal background, and sometimes a credit check. The cost is typically 2 to 5 percent of the bond amount per year — so for a $10,000 bond, you might pay $200 to $500 annually.
Some bonding companies offer multi-year discounts if you pay upfront. Once you have the bond, keep the certificate in a safe place — you will need to renew it when your dealer license renews.
Renewing your dealer license every two years
Your Michigan dealer license is valid for two years from the date of issue. Before it expires, you must renew it by submitting a renewal process and paying the renewal fee (currently $50). The state will send you a renewal notice in the mail about 30 days before your license expires.
To renew, complete Form VTR 34 again with any updated information, include the renewal fee, and submit it to the same address. You will also need to renew your surety bond at the same time — contact your bonding company at least 30 days before your current bond expires to arrange the renewal.
If you let your license expire without renewing, you cannot legally buy or sell vehicles as a dealer. Selling vehicles without a valid license can result in fines and legal action by the state.
Frequently Asked Questions
Can I use my home address as my business location?
Yes. Your home address is acceptable as long as it is a real, physical location where you can conduct business and where the state can inspect if needed. You cannot use a mailbox service, a P.O. box, or a virtual office address. If you rent, you may need written permission from your landlord to operate a business there.
What disqualifies you from getting a dealer license?
Felony convictions related to fraud, theft, embezzlement, or vehicle sales crimes are the most common disqualifiers. Outstanding fines or violations related to vehicle sales can also result in denial. A background check is part of the process, so the state will discover these issues.
How much does the surety bond cost?
The bond premium is typically 2 to 5 percent of the bond amount per year. For a $10,000 bond (the standard for used vehicle dealers), you would pay roughly $200 to $500 annually. Rates vary by bonding company and your credit history.
What if I sell vehicles before my license arrives?
You cannot legally sell vehicles as a dealer until your license is issued. Selling before you are licensed violates Michigan law and can result in fines. Wait for your license to arrive before you conduct any dealer business.
Do I need a separate license for each location if I operate multiple lots?
Yes. Each physical business location requires its own dealer license process and surety bond. If you plan to operate from more than one address, submit separate applications for each location.