Licensing Of Vehicle Dealers - Michigan
Chapter 1: Licensing of Vehicle DealersPage 1Chapter 1Licensing of Vehicle DealersSection 1-1Dealer Licensing Requirements1-1.1 Authorization. Section 248 of the Michigan Vehicle Code (MCL 257.248) provides anyperson, partnership, or corporation engaging in business as a vehicle dealer of any type in thisstate must be licensed by the Michigan Department of State (MDOS). The Business LicensingSection of MDOS oversees this licensing activity. Other auto-related businesses, such as motorvehicle repair facilities and automotive mechanics, are also required to be registered and/orlicensed by the MDOS.MDOS licenses ten classifications of dealers, including: new vehicle dealers, used vehicledealers; vehicle brokers, wholesalers and various types of distressed vehicle dealers. Applicantsmust complete form AR-0032, Original Vehicle Dealer License Application, to apply for adealer license.1-1.2 License Expiration. Dealer licenses expire December 31 each year and must be renewedprior to expiration. Any renewal received after the expiration date will be charged a late renewalfee of an additional 50% of the license renewal fee. Multi-year renewals are available through eServices and are encouraged. Form AR-0033, Vehicle Dealer License Renewal Application, ismailed to the dealer's licensed location prior to expiration. License renewals should becompleted by November 1 to allow for mailing and processing.1-1.3 Un-renewed License. You will be required to apply for a new license if you allow yourlicense to lapse for more than 30 days [MCL 257.248(8)(h)]. Dealers who have not renewedtheir licenses cannot operate. Secretary of State offices will not accept transactions from dealerswhose licenses have expired.1-1.4 Trailers. A dealer license is required for the sale of trailers weighing over 2,500 pounds.A dealer license is also required for the sale of all trailers or campers requiring a certificate oftitle (e.g., trailer coaches or pick-up campers).Section 1-2Established Place of Business1-2.1 Authorization. By law, every dealer must have and maintain an established place ofbusiness. This requirement is outlined in Sections 14 and 248 of the Michigan Vehicle Code(MCL 257.14 and MCL 257.248). The location shown on each dealer's license is the dealer'sofficial “established place of business.” Any proposed changes in the dealership location mustRevised November 2019
Chapter 1: Licensing of Vehicle DealersPage 2be applied for on form AR-0068, Vehicle Dealer License Application Change of Name and/orChange of Address, or through your e-Services account.1-2.2a Established Place of Business Requirements for New and Used Vehicle Dealers.Following are the requirements for licensing of new and used vehicle dealers:a) The premises must contain a permanently enclosed building or structure eitherowned, leased, or rented by a dealer, which is not a residence, tent, temporarystand, or any temporary quarters;b) The building or structure is required to be continuously occupied in good faith forthe purpose of selling, buying, trading, leasing, or otherwise dealing in motorvehicles;c) All books, records, and files necessary to conduct the business of a Class A orClass B dealer must be maintained in the building or structure during yourestablished business hours on file with the Secretary of State;d) A building or structure housing an office of at least 150 square feet in size,equipped with standard office furniture, working utilities, a working restroom, anda working telephone listed in the name of the business on the dealer's license;e) Land space of no less than 1,300 square feet to accommodate the display of aminimum of 10 vehicles of the kind and type the dealer is licensed to sell and anadditional 650 square feet for customer parking. The display and customerparking areas must be adequately surfaced and well-lit during business hours;f) An exterior sign displaying the name of the dealership permanently affixed to thebuilding or land with letters clearly visible from the roadway identifying thepremises;g) Conspicuous posting of the dealer's regular hours of operation. The posted hoursmust be not less than 30 hours per week;h) The premises must contain a registered repair facility on site for the repair andservicing of motor vehicles of a type sold at the established place of business,unless the dealer has entered into a written servicing agreement with a registeredrepair facility at a location not to exceed a distance of 10 miles from theestablished place of business. If repairs are conducted pursuant to a servicingagreement, the servicing agreement must be conspicuously posted in the office;i) The premises meet all applicable zoning and municipal requirements.For specific information on established place of business and other dealer requirements, you maycontact the Business Licensing Section at (888) 767-6424 (1-888-SOS-MICH),Revised November 2019
Chapter 1: Licensing of Vehicle DealersPage 3Licensing@michigan.gov, or check the Secretary of State Web site at www.Michigan.gov/sosunder Automotive Related Businesses.1-2.2b Established Place of Business Requirements for Wholesale Vehicle Dealers.An established place of business for a wholesaler, is the place actually occupied, eithercontinuously or at regular periods and must satisfy all of the following requirements:a) The premises must contain a permanently enclosed building or structure eitherowned, leased, or rented by a wholesaler, which is not a commercial mailbox,tent, temporary stand, or other temporary quarters;b) All books, records, and files necessary to conduct the business of the wholesalermust be maintained in the building or structure described in subdivision a);c) The premises must not be used for the display of vehicles. However, the premisesmay be used for the storage of vehicles purchased by the wholesaler prior to sale toa licensed vehicle dealer;d) An exterior sign displaying the name of the dealership permanently affixed to thebuilding or land with letters clearly visible from the roadway identifying thepremises;e) The premises meet all applicable zoning and municipal requirements.1-2.3 Requirements for All Vehicle Dealers. All places of business, for all dealer licenseclassifications, must meet the following requirements:a) Approval by the Secretary of State;b) Occupied by the dealer either continuously or on a regular basis;c) Books and records kept on the premises during established business hours on filewith the Secretary of State;d) A large share of the business transacted on the premises;e) Vehicle inventory kept on the premises;f) Zoning and municipal approval;g) Adherence to designated business hours on file with the Secretary of State.1-2.4 Two Dealers at One Location. The Michigan Vehicle Code [MCL 257.14 et seq.] definesan "established place of business" as the place actually occupied either continuously or on aregular basis by a dealer where books and records are kept during established business hours onRevised November 2019
Chapter 1: Licensing of Vehicle DealersPage 4file with the Secretary of State and a large share of the dealer’s business is transacted. Theaddress or location listed on your dealer application or change of address application cannot bethe same as the established place of business or location of another licensed dealer.By statute, the proposed address or location can only be the established place of business of onelicensed vehicle dealer. If two dealers are located in close proximity, there must be a clearseparation between the vehicle dealership businesses. This includes separate addresses,inventories, office spaces, customer parking, restrooms, etc.Please note: Businesses cannot share or pool resources to meet established place of businessrequirements. Each business must separately meet the requirements. The Business LicensingSection will evaluate each original dealer license application submission where it appears morethan one dealer is occupying a location on a case-by-case basis.1-2.5 Additional Locations in Same County. A dealer license authorizes the dealer to conductbusiness at a principal place of business in a particular county. Additional locations in the samecounty can be licensed as supplemental locations, at no additional fee, if the same activities willbe conducted. If the types of activity differ, a separate dealer license may be required.1-2.6 Another County. A separate dealer license is required if a dealer sells at retail in anothercounty or establishes a place of business in another county.Section 1-3Workers’ Compensation Insurance1-3.1 Requirements. Used vehicle parts dealers (Class C) and automotive recyclers (Class R)must maintain workers' compensation insurance for employees classified as automobiledismantlers, or else have an insurance exemption from the Office of Financial and InsuranceServices. Foreign salvage vehicle dealers (Class H) must maintain workers' compensationinsurance as required by their home states.Other classes of dealers may be required to carry workers' compensation insurance, but proof ofsuch 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). Contact the Worker’s Compensation Agency ifyou have questions at (888) 396-5041 for more information.Section 1-4Business Hours1-4.1 Requirements. Dealers must maintain and post regular business hours and must advisethe Business Licensing Section of those hours to be kept on record.1-4.2 Business Hours. At a minimum, new and used vehicle dealers (Class A and Class B) mustbe open for business 30 hours each week. All other vehicle dealer classifications must maintainat least 4 consecutive hours of business each week. Dealers are required to adhere to the businesshours filed with the Secretary of State and make records available for inspection to the SecretaryRevised November 2019
Chapter 1: Licensing of Vehicle DealersPage 5of State and law enforcement during reasonable business hours.1-4.3 Change in Business Hours. Dealers must notify the Business Licensing Section of anychanges through their eServices account.1-4.4 Sunday Sales. MCL 435.251. The Secretary of State may deny the application for alicense as a dealer, may refuse to issue a dealer license, or may suspend or revoke a licensealready issued if it finds the applicant or licensee has engaged in the business of buying, selling,trading, or exchanging new, used, or secondhand motor vehicles or has offered to buy, sell, trade,or exchange, or participate in the negotiation thereof, or attempted to buy, sell, trade, orexchange any motor vehicle or interest in any motor vehicle or any written instrument pertainingto a motor vehicle on a Sunday. Sunday sales are permitted in counties having population offewer than 130,000 inhabitants according to the latest or each succeeding federal decennialcensus.Section 1-5Surety Bond1-5.1 Requirements. All Class A, B, and D dealers are required to maintain a vehicle dealersurety bond in the amount of 10,000. These bonds are used to reimburse purchasers, sellers,financing agencies, and government agencies for monetary loss caused by any tax deficiency,fraud, cheating, or misrepresentation in the conduct of the dealer’s vehicle business.1-5.2 License Termination. If a surety bond company cancels a dealer's surety bond, the dealer'slicense will be summarily suspended on the effective date of the bond cancellation. Dealerswhose bonds are canceled, or who have no bond on file with the MDOS must immediately ceaseoperations and cannot sell vehicles, process RD-108s, or otherwise conduct business.1-5.3 Authority. Michigan law (MCL 257.248) requires the issuing surety company to notifyMDOS in advance of any bond cancellation. The Business Licensing Section at MDOS notifiesthe dealer by mail of the cancellation. A notice is mailed advising the dealer the license will besummarily suspended effective on the cancellation date. Secretary of State offices and otherinterested businesses are then notified the license has been summarily suspended.Section 1-6Fleet Insurance1-6.1 Requirements. New, used, and wholesale vehicle dealers (Class A, B, and W) are requiredto maintain a minimum of 20/40/10 fleet-type Michigan no-fault vehicle insurance. Theinsurance certificate must indicate coverage for either “all-owned vehicles” or “any vehicle.” Acopy of the proof of insurance must be maintained in each vehicle that leaves the lot, includingtest drives.Revised November 2019
Chapter 1: Licensing of Vehicle DealersPage 6Section 1-7Dealership Changes1-7.1 Requirements. Changes in ownership, officers, location, business hours, type of business,franchise status, and dealer classifications are examples of changes that require notification andapproval by the Michigan Department of State.1-7.2 Application. Dealers must complete and submit an original application for a license (formAR-0032) or (form AR-0068) Vehicle Dealer License Application Change of Name and/orChange of Address, to request a change or notify Business Licensing Section through theireServices account.Section 1-8Change of Address or Change of Business Name1-8.1 Postal Changes. If a dealer's business address is changed by the Post Office but thedealership has not moved, the dealer must submit a copy of the postal notice to the BusinessLicensing Section.1-8.2 Change of Address. When a dealer anticipates a move to a new location, the dealer mustcomplete form AR-0068, Vehicle Dealer License Application Change of Name and/or Change ofAddress or submit the change through their eServices account. Change of address riders for thesurety bond and fleet insurance are required. Sole proprietorships and partnerships must providea copy of the assumed name filing in the new county. Dealers must include municipal andzoning approvals for the new location.1-8.3 Change of Name. When a dealership changes its name, the dealer must complete formAR-0068, Vehicle Dealer License Application Change of Name and/or Change of Address ornotify Business Licensing through their e-Services account. Change of name riders for thesurety bond and fleet insurance are required from the dealer.Section 1-9Change of Ownership1-9.1 Requirements. Each owner, partner, and principal officer of a business entity must beincluded on the original dealer license application. All changes in the ownership of a dealershipmust be reported to the Business Licensing Section through their eServices account. Forms mayalso be found online at www.Michigan.gov/sos under Business Services,/Automotive RelatedBusinesses/Publications and Forms. Scroll to Licensed Dealer Forms, and select AR-0069,Dealer Corporate Officer Change Application.1-9.2 Corporations. Deleting an officer’s name from a dealer license requires writtennotification. The dealership must submit to the Business Licensing Section either of thefollowing:Revised November 2019
Chapter 1: Licensing of Vehicle DealersPage 7a) A written statement, signed by the person whose name is being removed from thelicense, requesting the removal; or,b) A certification signed by a corporate officer authorized to act on behalf of thecorporation requesting the person's name be removed from the dealer license.To add an officer’s name to the license, the applicant needs to complete form AR-0069, DealerCorporate Officer Change Application, and submit their fingerprints using the Live Scanprocess. The name can be added to the license only after the Michigan Department of State hasconducted an investigation of the applicant’s background.1-9.3 Partnerships. Written notification to the Business Licensing Section is required whenevernames are added to or deleted from a dealer license. A new dealer license is required in certaincases.a) Adding a Name. To add a partner to the license, dealers must complete formAR-0069, Dealer Corporate Officer Change Application, and submit theirfingerprints using the Live Scan process or through their e-Services account.Riders for the surety bond are required. The name may be added only after theMichigan Department of State has conducted an investigation of the applicant'sbackground.b) Deleting a Name. To delete a partner’s name from the license, the dealer mustsubmit a statement, signed by the person, whose name is being removed from thelicense, requesting the removal, or a certification signed by another partner. Arider for the surety bond is required or through their e-Services account.1-9.4 Limited Liability Companies. Written notification to the Business Licensing Section isrequired when a managing member is added or deleted from a dealer license.a) Adding a Name. Adding a member’s name to the license requires the dealer tocomplete form AR-0069, Dealer Corporate Officer Change Application, submittheir fingerprints using the Live Scan process or through their e-Services account.The name may be added to the license only after the Michigan Department of Statehas conducted an investigation of the applicant’s background.b) Deleting a Name. Deleting a member’s name from the license requires astatement, signed by the person, whose name is being removed from the license,requesting the removal, or a certification signed by another managing member orthrough their e-Services account.1-9.5 Individual Ownership. When a sole owner incorporates a dealership or transfersownership to another person or entity, a new dealer license application is needed. An individualowner can add or delete a spouse by amending the current license. A copy of the new assumedname filed with the county must be submitted to the Michigan Department of State. A rider forRevised November 2019
Chapter 1: Licensing of Vehicle DealersPage 8the surety bond is required. The dealer license number will not change in this case.Section 1-10Additional Sales Locations1-10.1 Supplemental Locations. A supplemental location is an approved place of businesslocated within the same county as the dealer's primary established place of business and is inaddition to the primary business location. The business activities at a supplemental locationmust be the same as those conducted at the primary location.To apply for a supplemental location license, the dealer submits a request through their eServices account, or completes form AR-0066, Vehicle Dealer Supplemental Location LicenseApplication, available on the Secretary of State website, at www.Michigan.gov/sos A dealermay have as many supplemental locations as desired, but each location must qualify and belicensed by the MDOS. There is no fee to add a supplemental location.1-10.2 Temporary Sales Locations. A dealer may hold a temporary sale at a location awayfrom the established place of business, but only within the county of licensure. This may includea “tent sale,” an auto show, or a similar event during which vehicles may be displayed or sold fora specified length of time. Form AR-0066, Vehicle Dealer Supplemental Location LicenseApplication, is required. Dealer may also submit the request through their e-Services account. AMichigan Vehicle Dealer Closeout Statement (Temporary Location) form is also needed. TheClose-Out Statement will be used to cancel the supplemental license once the temporary sale isover. Approval for temporary sales cannot be given without a Closeout Statement.Restriction: No temporary sales locations are permitted outside the dealer’s county of licensure.Additionally, if a dealer is not allowed Sunday Sales in their county, the dealer may not conducta Temporary Sale on a Sunday.NOTE: Dealer plates are not issued for temporary sales locations.1-10.3 Temporary Sales Locations – RV Dealers. Licensed RV dealers are not required toobtain a supplemental license to deal in motor homes, trailer coaches, trailers, or pickup campersat a recreational vehicle show if all of the following apply:a) The dealer is licensed as a new or used vehicle dealer (Class A or B); and,b) The duration of the recreational vehicle
Established Place of Business . 1-2.1 Authorization. By law, every dealer must have and maintain an established place of business. This requirement is outlined in Sections 14 and 248 of the Michigan Vehicle Code (MCL 257.14 and MCL 257.248). The location shown on each dealer's license is the dealer's official “established place of business.”
vessels during each licensure period without licensing as a boat dealer); Powersport dealer: Wholesale motor vehicle dealers; Trailer dealers; Recreational vehicle dealers; Motor vehicle, trailer, and boat manufacturers; Wholesale motor vehicle auctions; Public motor vehicle auctions; Lease Rental company;
Commonwealth. Kentucky has been licensing and regulating vehicle dealers since 1914. The Commission in its present form was created in 1982 and is made up of twelve members: four new car dealers, four used car dealers, one consumer, one whole- ‐ sale dealer, aFile Size: 324KBPage Count: 24
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