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Dealers
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Can I purchase new vehicles if I only have a class "W" vehicle wholesaler license?
No! A wholesaler can only deal in USED vehicles.
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Can I purchase new vehicles from a class "A" dealership if I only have a class "B" used vehicle dealer license?
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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Where can I find vehicle dealer training information?
Information for dealers
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How do I verify whether a motor vehicle dealer, repair facility or mechanic is properly licensed or registered by the Department of State?
Currently licensed or registered dealers, repair facilities and mechanics can be found under Online Services. Follow the link Vehicle Services. Locate Business Services. Follow the link Dealer Services or Repair Facility Services. Then follow the link Find a Dealer or Find a Repair Facility. You may also search for a mechanic by locating Additional Services and following the link Mechanic Services and then following the link Find a Mechanic. These listings are updated on a daily basis. If you are unable to locate the motor vehicle dealer, repair facility or mechanic 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 for dealers
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Are vehicle dealers required to record a customer's driver's license number or state ID number on the RD-108?
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 office 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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Do I have to return the deposit if a customer signed a vehicle purchase agreement and then backed out of it?
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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Do licensed dealers need to have workers' compensation insurance for their 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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Do vehicle dealers need to inform the state if they choose to use 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 vehicle dealers calculate a license plate expiration date and fee?
Calculating license plate fees is now easier than ever for dealers! For more information, visit Online Services.
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How do vehicle dealers report a lost, mutilated, or stolen dealer plate?
Dealers are reminded to monitor dealer plate use and periodically audit dealer plates to ensure that none have been lost or stolen. Lost, mutilated or stolen plates can be replaced by completing an Application for Additional/Replacement Dealer Plates (AR-0036). Dealer plates confiscated for improper use by law enforcement will not be replaced.
Application for Additional/Replacement Dealer Plates -
If a vehicle dealer purchases a late-model, distressed vehicle at an auction from an insurance company, do they need to apply for a salvage or scrap title if the insurance company did not?
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, review the information regarding special titles, or the Salvage Section of the Dealer Manual.
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What is the best way to correct information if a vehicle dealer makes a mistake on the RD-108?
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 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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Is there a compliance checklist available for A & B Dealers to use?
For a comprehensive list of compliance requirements, dealers should consult the dealer manual. However, for your convenience we have created the following checklist that can be used for a quick reference of items that will be inspected.
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Is training required to obtain a vehicle dealer license?
Only for Class B vehicle dealer applicants. PA 420 of 2018 went into effect March 20, 2019, which requires all applicants for a Class B used vehicle dealers to attend prelicensure training within 6 months prior to the date of their application. The pre-license training is required for any applicant, partner of the applicant, or each officer of the applicant, as applicable, for the original eligible used vehicle dealer license.
In addition, every Class B dealer applicant shall select a designated individual to complete the continuing education dealer training program in the 90 day period following the issuance of the license. Newly issued Class B vehicle must select a designated individual for each of its retail sales locations. The dealer cannot select a single individual to be the designated individual for more than 3 locations. Review MCL 247.248 and MCL 257.248l for more information.
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What should I do if I want to have a tent sale a few miles from my dealership?
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 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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How does a vehicle dealer replace a lost vehicle title in their possession?
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 following options to apply for a resale title in the dealer's name:
- 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).
- 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.).
- 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.
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What benefits does the Electronic Funds Transfer (EFT) program provide for vehicle 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 set up their EFT account by logging into their e-Services account under ‘Dealer Services.’
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What does Michigan law allow as far as replacements when an out-of-state vehicle title is lost?
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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What can I expect from dealer training?
Dealer training is conducted via Microsoft Teams for all dealers. Pre-registration is required.
In dealer training, you will learn about the following topics:- How to utilize Secretary of State e-Services
- Issuing and cancelling BFS-4 temporary registrations
- Adding and removing users
- Dealership records and record keeping requirements
- Police book requirements
- Proper documentation of vehicle sales
- Deal jacket requirements
- Vehicle buy-back
- Established place of business requirements
- Consumer and dealer protection
- The dealer inspections process
- Commonly issued violations
- Commonly issued violations
- Dealer plate usage
- Sales and use tax requirements
- How to utilize Secretary of State e-Services
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What does lien assumption mean?
When a dealer assumes a loan when purchasing a vehicle, they are responsible for paying off the remainder of the loan. If they transfer ownership of the vehicle to another dealer before the loan is paid off, the dealer purchasing the vehicle assumes responsibility for the loan.
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What is a lienholder?
Companies who are in the business or practice of financing vehicles. Secured party, security interest, and lienholder are terms that refer to an individual, bank, credit union, or other organization with a financial claim to a vehicle.
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What should I do if I bought a vehicle from a dealer over the internet and haven't received the title?
A: The Michigan Department of State issues the following notification to vehicle owners who buy (or are considering buying) a vehicle from a vehicle dealer over the internet:
The Michigan Department of State processes title applications as quickly as possible once it is received from the vehicle dealer. The department has recently observed some online vehicle purchase applications being submitted by vehicle dealers quite some time after the vehicle purchase resulting in online vehicle buyers waiting longer for their title and registration. State law requires these applications from Michigan dealers to be submitted within 15 business days. MCL 257.217(4).
If you have any additional questions about any delays in your application, please contact your vehicle dealer. To report potential violations, please contact the Regulatory Monitoring Division at SOS-RMD-800@michigan.gov.
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What should I do if I have a complaint about dealer repair instructor or testing business?
Before filing a formal complaint, talk with the manager or administrator of the facility, dealership, or program. They have the authority to work with you and resolve your concerns whenever possible.
If your complaint still isn’t resolved after meeting with the manager or administrator, you may file a complaint with the Michigan Department of State, using our Online Services, mail, fax or email.
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In a vehicle sale, 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 previous wording, 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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What is the Truth in Brokering Act and how does it effect brokers and dealers?
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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When can a paper title be issued?
Once the title is in the name of the dealer (assumed by the dealer), an instant paper title to be purchased at a Secretary of State office. The title will be subject to the additional $5 instant title fee.
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When does my dealer license expire?
The license expiration date is found at the top of your dealer license renewal. The Michigan Vehicle Code requires a new dealer application after a dealer license has been expired more than 30 days.
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When is a convenience fee charged?
The convenience fee is charged for using a credit card as method of payment during the final check out on e-Services. This service fee is calculated at 1.45% of the transaction amount.
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When can a dealer 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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What date is used for a lessee's plate expiration date if the vehicle title is in the name of the leasing company and the lessee is an individual?
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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When should a vehicle dealer complete a separate odometer statement?
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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.
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If an older title does not have a conforming odometer statement, a separate odometer statement is required.
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With MCO's, either the back of the MCO or a separate odometer statement can be used. We recommend using the MCO.
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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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Where can dealers obtain base price information?
Vehicle base price information is available at Secretary of State offices and on the web site at Vehicle Base Prices.
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Where can information be found about on dealer-related, e-Services topics?
Information for dealers
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Who can sign up for dealer training?
Dealer training is conducted via Microsoft Teams for all dealers. Pre-registration is required.
Class A, B, C, D, E, F, G, R, or W dealer owners, managers, sales and office staff that handle paperwork may attend full-day trainings. All trainings have a sign-in and sign-out procedure. Failure to properly sign-in and sign-out of the training will result in not receiving credit for attending the training.- Continuous education dealer training: Register through e-Services. Only the training dates with available slots will be visible. Once you are registered, you will receive a confirmation email with the date and time of the training session.
- Pre-licensing vehicle dealer training: Register via email (BLRD@michigan.gov). You will receive an email approximately 3 days prior to the date you are registered with instructions on how to access the training event, training materials, and the proper link to log into the training.
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Who can use a dealer plate?
The relevant law is Section 244(4) of the Michigan Vehicle Code. MCL 257.244(4). It states that a dealer may use a dealer plate and specifically defines “dealer” to include three types of individuals, beyond the dealers themselves, who may use a dealer plate: “employee, servant, or agent” of the dealer.
Since the Michigan Vehicle Code does not define “employee, servant, or agent,” a dictionary definition is reasonable. An “employee” is someone who is employed by the dealer for wages or salary; an “agent” is someone who acts on behalf of a dealer; and a “servant” is someone who performs duties for the dealer.
“Family member” is not included in the list of individuals who may use a dealer plate. The mere fact of being a dealer’s family member is not enough to use a dealer plate. However, if a dealer’s family member is an employee, servant, or agent of the dealer, that person would be allowed to use a dealer plate. This is not a new law. This clarification is simply offered as a reminder of what the law is and has been for a long time.
With respect to how a dealer plate may be used—that is, what is an appropriate use for a dealer plate—the relevant law is Section 244 of the Michigan Vehicle Code. MCL 257.244. Dealer plates may be used on dealer-owned vehicles driven by employees, servants, or agents of the dealership for any purpose, provided that the vehicle is not a “service vehicle.” The Michigan Vehicle Code does not define “service vehicle” but a common understanding would include courtesy cars, loaners, daily rental, lease, vehicles used for obtaining or delivering parts, and vehicles used to provide roadside service or tow disabled vehicles. -
Who pays the title transaction fee in a dealer-to-dealer trade?
The title transaction fee is generated with the transfer of ownership into the receiving dealer’s name, therefore the receiving dealer is responsible for the fee.
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When is an installment sales license required?
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 Insurance and Financial Services. Form FIS-1028, Installment Seller License Application or FIS-2311 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 517-284-8800
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Who should vehicle dealers contact if they have questions 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.