Secretary of State
Proof of Ownership
Section 235 of the Michigan Vehicle Code (MCL 257.235) requires every vehicle in a dealer's possession (i.e., for resale purposes) to have a document proving ownership. A vehicle may not be sold or offered for sale in Michigan unless the dealer has a properly assigned title or other ownership document.
The only exception to the document possession requirement is for a new vehicle which has an electronic (paperless) Manufacturer's Certificate of Origin (MCO). However, the dealer should have an invoice or other paper document on file. Brokers and auctions should use the Broker Fee Agreement to show authorization to hold the vehicle.
If all assignment spaces on the title are already filled, the selling dealer must apply for a resale title before completing the sale. No tax is due on resale titles.
Transfer of Ownership
Vehicle ownership is transferred when the owner(s) signs off of the vehicle title (assigning the title) to the new owner, and the new owner signs on and takes delivery. All owners whose names are shown on the face of the title must sign the title. Unless the vehicle is exempt from odometer disclosure requirements, the seller must complete the odometer statement on the title before the sale can be finalized.
When selling a vehicle to a non-dealer, the selling dealer must apply for title and registration on the purchaser's behalf within 15 days of delivering the vehicle, using form RD-108, Michigan Application for Title and Registration. A transaction receipt, form RD-108L, will be generated by the Secretary of State branch office when the transaction is processed. The requirements for completing the RD-108 form are outlined in Chapter 7 of the Dealer Manual.
When a vehicle is transferred from one dealer to another dealer, an RD-108 form is not required if the purchasing dealer is buying the vehicle for resale. The selling dealer simply assigns the title or MCO to the purchasing dealer, and completes the odometer disclosure and separate salvage disclosure, if applicable. All assignments must be dated.
Providing Documents to Purchasers
Dealers must give every purchaser a copy of every document signed by the purchaser, at the time of signing, including the RD-108 and the front and back of the title. The dealer must complete the reassignment and show the purchaser the title (front and back), and any reassignment forms the dealer has, before delivery.
This is a brief introduction, and is not exhaustive. See Chapter 3 of the Dealer Manual for a thorough explanation of Titling and Registration Procedures for Michigan Dealers.