FAQ
Vehicle Dealers
How do I find vehicle dealer training information?

Training for vehicle dealers on the basic requirements of the Michigan Vehicle Code can be found on the Secretary of State's Web site at Vehicle Dealer Training or by calling the Business Regulation Section 517-335-1799 .

 

 

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I only have a class "W" vehicle wholesaler license. Can I purchase new vehicles?

No! A wholesaler can only deal in USED vehicles.

 


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I have a class "B" used vehicle dealer license. Can I purchase new vehicles from a class "A" dealership?

No, a used vehicle dealer can only buy and sell USED vehicles. All vehicles must have been previously titled, plated and registered before being sold by a USED vehicle dealer.

 

 

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How do you calculate a license plate expiration date and fee?

Calculating license plate fees is now easier than ever for dealers!  For more information, visit the Plate Fee Calculator page.

Fee Charts and Plate Expiration Information

If you find you need help calculating a plate fee, call the Department of State Information Center at 1-888-SOS-MICH (1-888-767-6424) for assistance.

 

 

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When can I do a title-only sale?

Dealers must apply for both a title and registration with every retail sale unless one of the following explanations is provided in the Remarks section:

  • "Title Only - No Registration - Vehicle Inoperable." This means the vehicle is not drivable. The vehicle must be towed or trailered from the dealership.
  • "Title Only - No Registration - Customer's Request." This means the customer requests no registration. The dealer must also enter the method of delivery: "Vehicle Towed," "Vehicle Trailered," or "Vehicle Delivered on Dealer Plate."
  • "Salvage" Salvage vehicles are not eligible for registration.

 

 

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When I am titling a vehicle in the name of a leasing company, and the lessee is an individual, what date is used for the lessee's plate expiration date?

Leasing companies entrust plate ownership to their lessees. The plate expires on the lessee's birthday. This is dictated by law. Some lessees may wish to have their plate expire on the date their lease is up, however, a birthday expiration date must be used. At the end of their lease, the lessee keeps the license plate and may transfer it to the next car they choose to purchase or lease.

A few leasing companies still own the plates on their leased vehicles. In these cases, the plate expiration date is the first of any month. The leasing company chooses which month they want the plate to expire when they first buy the plate.

 

 

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Am I required to record the purchaser(s) driver license numbers or personal identification numbers on RD-108s?

Yes. The Department uses the name, date of birth and driver license or personal identification (PID) number to verify the purchaser(s) identity and eligibility for license plates. This applies to RD-108s and with private transactions conducted in branch offices.

Michigan residents subject to registration denial cannot purchase, renew, or transfer a license plate, or obtain a registration for any motor vehicle they purchase, lease, or already own. This includes all motor vehicles they own, co-own, lease, or co-lease.  Verifying your customer is eligible for registration prior to submitting your RD-108 at your branch office, via the Department's repeat offender website, may reduce the chance of a returned deal.

Verifying the purchaser(s) driver license or PID number enables Secretary of State branch office staff to process your RD-108s quicker, as we can generate the purchaser(s) name and address from their driver license or PID record. This saves our employees the time-intensive process of typing in the name and address by hand.

 

 

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Who should I contact if I have a question about the collection of sales tax?

The Michigan Department of Treasury requests dealers contact their Sales, Use, and Withholding Taxes Division with any questions about the collection of sales tax. Treasury requests dealers not ask Secretary of State branch offices any sales tax questions, as final jurisdiction with all tax matters rests with the Department of Treasury.

Dealers with any questions about the proper collection of sales or use tax should contact the Michigan Department of Treasury customer service line at 517-636-4230.

 

 

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When should a separate odometer statement be used? Should I complete one when I have also completed the odometer statement on the title?
  • If a Michigan title or out-of-state title has a conforming odometer statement, the odometer statement on the title is always used. There is no need to also complete a separate odometer statement.
  • If an older title does not have a conforming odometer statement, a separate odometer statement is required.
  • With MCO's, either the back of the MCO or a separate odometer statement can be used. We recommend using the MCO.
  • Dealers under Michigan's Paperless MCO Program, do not receive a MCO from their manufacture and must use a separate odometer statement when vehicle ownership transfers.

 

 

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The Department encourages dealers to sign up for the Electronic Funds Transfer (EFT) program. What benefits does this program provide to dealers?

Class A, B, and D dealers who choose the EFT method to pay for their transactions enjoy the following benefits:

  • Eliminates the need for writing checks for each transaction.
  • Expedites transactions with the Secretary of State by ensuring proper fee collection. Eliminates the need for branches to return RD-108s for added fees, if you've made an agreement with your branch to change fees by a few dollars, without returning a transaction.
  • Dealers receive an itemized receipt showing all related fees for each transaction processed. This receipt can help you to maintain your business records.

Dealers may obtain an EFT application online or from the Revenue Accounting Section, at 517-322-1728. Return the completed EFT application to the mailing address or fax number on the face of the application.

 

 

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What is the difference between a conforming vs. non-conforming title?

A "conforming" title is one which has an odometer disclosure statement which complies with federal verbiage standards. For your information, a conforming odometer statement will consist of one of the following two phrases (states have a choice which phrase to use):

I (we) state that the odometer mileage is __________________ and certify that to the best of my knowledge the odometer reading is:

-- actual mileage

-- not actual mileage -- WARNING-ODOMETER DISCREPANCY

-- exceed mechanical limits of odometer

I certify to the best of my knowledge that the odometer reading is the actual mileage of the vehicle unless one of the following statements is checked:

-- The mileage stated is in excess of its mechanical limits.

-- The odometer reading is NOT the actual mileage. WARNING: ODOMETER DISCREPANCY

If an out-of-state title contains an odometer statement with the wording above, then it is a conforming title (the wording does not have to be exact, but often will be).

The majority of states began issuing conforming titles between 1989 and 1992. Generally, those issued before 1989 are nonconforming.

 

 

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Do I need workers' compensation insurance for my employees?
  • Class C and Class R dealers must maintain workers' compensation insurance for employees classified as automobile dismantlers, or have an exemption from the Michigan Department of Insurance and Financial Services (DIFS);
  • Class H dealers must maintain workers' compensation insurance as prescribed by their home state;
  • Other dealers may also need to carry workers' compensation insurance but proof of such insurance is not required with the application for Class A, B, D, E, F, G or W dealers (unless also licensed as a Class C or R dealer).

 

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Who needs an installment sales license?

The Motor Vehicle Sales Finance Act requires persons to obtain an installment seller license when selling a motor vehicle if: Two or more scheduled payments or deposits are made on motor homes or passenger vehicles only, whether or not the seller has retained a security interest in the motor vehicle.

Installment seller licenses are issued by the Michigan Department of Labor and Economic Growth. Form FIS-1028, Installment Seller or Sales Finance Company License Application, is used to apply. The cost of the license is $30 annually. It expires on June 30 each year.

Telephone: 877-999-6442 (toll-free) or 517-373-0220
Fax: 517-373-0549

 

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The out-of-state dealer I wholesaled the vehicle to lost the title. Does Michigan law provide for replacing the lost title in this circumstance?

Michigan law provides for the replacement of lost titles for licensed Michigan dealers and Michigan residents. Michigan law does not provide for a title replacement in this instance. This new owner/dealer must use the provisions available to them in their home state to obtain a replacement title.

 

 

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A customer signed a purchase agreement and gave a $100 deposit. Now they have backed out of the deal. Do I have to return the deposit?

A purchase agreement is a contract between the dealer and the prospective buyer. The contract should specify the conditions under which the deposit may or may not be refunded. You must abide by the terms of the contract.

 

 

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Where can dealers obtain base price information?

Vehicle base price information is available at Secretary of State branch offices and on the Secretary of State Web site at: http://www.michigan.gov/sos/0,4670,7-127-49534_50300_50310_51422-30109--,00.html

 

 

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I bought a car and now I cannot find the title. How do I get a replacement title?

If a Michigan dealer loses an assigned Michigan title for a vehicle, the dealer's best option is to contact the previous owner for a replacement title. If unable to do so, the dealer follows one of the two options shown below to apply for a resale title in the dealer's name:

  1. If the vehicle is less than ten years old or worth more than $2,500, the dealer must either contact the previous owner for a replacement title, obtain a surety bond or court order for proof of ownership.   

    The dealer submits an RD-108 resale title application, a TR-121 Surety Bond or court order naming the dealer as owner, a TR-205 Ownership Certification, and a BDVR-108 Odometer Mileage Statement (unless the vehicle is exempt).
     
  2. If the vehicle is ten or more years old, was previously titled in Michigan, and worth less than $2,500 the dealer may use the self-certification of ownership procedure only if the dealer is unable to contact the previous owner for a replacement Michigan title.  If a dealer loses an assigned out-of-state title or an assigned Michigan title for a vehicle that does not qualify for self-certification, the dealer must obtain either a replacement title from the previous owner or a surety bond.

 If unable to obtain a replacement title from a previous Michigan owner, the dealer submits an RD-108 for a resale title and:

 a)   A TR-205 Ownership Certification

 b)   A copy of the page from their paper or electronic police book indicating how and when the vehicle was acquired for their inventory.

 c)   A BDVR-108 Odometer Mileage Statement completed by the dealer unless the vehicle is over 10 model years old.

 d)   Copies of the front and back copy of the lost Michigan title.

 e)   Purchase documents such as an auction receipt or a bill of sale confirming the vehicle is worth less than $2,500 and qualifies for self-certification, or, for a trade-in vehicle, a printed page from an on-line appraisal service (Kelly Blue Book, Edmunds, N.A.D.A. Guides, etc.).

 

 

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I purchased a late model distressed vehicle at an auction from an insurance company. Since the insurance company did not apply for a salvage or scrap title, do I have to?

Yes. If the vehicle meets the criteria for salvage (75% -90% of the predamaged value) or scrap (91% or more of the predamaged value), dealers are required by law to apply for the appropriate title within 5 days. For more information, see the information regarding special titles on the Secretary of State Web site, or the Salvage Section of the Dealer Manual.

 

 

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What is the Truth in Brokering Act?

Public Act 455 of 1998, known as the Truth in Brokering Act, became effective on December 30, 1998. This law requires brokers and dealers to keep certain information about fees and commissions they receive or pay.

 

 

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I want to have a tent sale a few miles from my dealership. What do I need to do?

A temporary sale at a location away from the established place of business requires additional licensing. This includes a "tent sale," auto show or activity in which vehicles may be displayed or sold for a specific length of time. Additional licensing is required for these activities. Forms are available from Bureau of Driver and Vehicle Programs, Business Licensing and Regulation Division:

Inside County of Licensure - Submit form AR-0066, Vehicle Dealer Supplemental Location License Application (PDF format) and Michigan Vehicle Dealer Closeout Statement (Temporary Location) (PDF format);

  • The Closeout Statement will be used to cancel the license once the temporary sale is over;
  • Approval for temporary sales cannot be given without a Closeout Statement.

 

 

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I made a mistake on the RD-108 so the new title shows the wrong information. How do I correct the mistake?

How the error is corrected depends on what error was made. The procedure for correcting odometer errors, for example, is different from the procedure for correcting the purchaser's name and address. Contact your local Secretary of State branch office for details or you may contact the Department of State Information Center at 1-888-SOS-MICH (1-888-767-6424).

 

 

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How do I begin using a computerized police book?

There is no requirement to notify Bureau of Driver and Vehicle Programs when you begin using a computerized police book. However, it is the dealer's responsibility to make sure the system being used complies with all requirements of the Michigan Vehicle Code.

 

 

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How do I verify whether a motor vehicle dealer is properly licensed or registered by the Department of State?

A list of currently licensed or registered dealers and repair facilities can be found on the Secretary of State's Web site at Vehicle Dealer and Repair Facility Licensee List. Licensees are listed by county in alphabetical order by name and are updated on a daily basis. If you are unable to locate the motor vehicle dealer or repair facility you are searching for, please call the Customer Support Section at 1-888-SOS-MICH (1-888-767-6424) for assistance.

 

 

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How do I renew my dealer license?

Information on how to renew your Michigan dealer license can be found on the Secretary of State's web site at Renewing Your Dealer License.

 

 

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How do I become a licensed dealer?

You must submit a completed original dealer application for departmental review; submit the proper fees; have an established place of business; be fingerprinted (through L-1 Identity Solutions) to allow for a criminal history check and provide copies of Articles of Incorporation or Assumed Name Filing for the business.  A pre-license inspection of the business location will be conducted to verify the business address meets the established place of business requirements.

New and used vehicle dealers must also have zoning and municipal approval for their dealership location; Michigan no-fault fleet type insurance; either their own registered repair facility or an agreement with a registered repair facility; request at least 2 dealer plates. New vehicle dealers must have a franchise agreement with a manufacturer.

Used vehicle parts dealers and automotive recyclers must maintain Worker's Compensation insurance or have an insurance exemption from the Office of Financial and Insurance Services.

You may obtain an original dealer application here or by calling the Customer Support Section at 1-888-SOS-MICH (1-888-767-6424).

 

 

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