Michigan Motor Vehicle Dealer, Michigan Auto Dealer Bond:
The Michigan Motor Vehicle Dealer bond is a License Surety Bond that serves to protect Michigan's citizens by providing an avenue for recourse in scenarios where an Auto Dealer does not follow the laws, rules, and regulations as set in Michigan state legal statutes. A Michigan Motor Vehicle Dealer bond might be required for vehicle registration or as part of the Motor Vehicle Dealer licensing process.
In Michigan, the required Motor Vehicle Dealer bond amounts are as follows:
- Michigan, New/Used Motor Vehicle Dealer bond requirement – $10,000 Surety Bond
- Michigan, Motor Vehicle Broker bond requirement – $10,000 Surety Bond
Be sure to check with the Michigan Department of State, or requesting agency, for the most up-to-date required amount for a Michigan Motor Vehicle Dealer bond as well as any required bond forms.
How Does a Michigan Auto Dealer Bond Work?
When you obtain one of these bonds it's actually an agreement between three different parties:
- The obligee is the Michigan Department of State. In any surety bond, the obligee is the party that the principal has an obligation to fulfill. The Michigan Department of State on behalf of the Michigan public requires auto dealers to be bonded. They set the requirement, create the terms, and enforce the penalties for auto dealers without a bond.
- The principal is you and anyone else with an ownership stake in the auto dealership. As part of the agreement, you agree to accept the financial responsibility for any claims made against the bond. You also agree to pay the bond premiums.
- The surety is whichever company issues a Michigan motor vehicle bond to you. If a claim is ever made, the surety company does its own investigation and pays for any valid claims, up to the limit of the bond. Afterwards, the surety recoups whatever amount was paid from the auto dealer – who ultimately has responsibility. Essentially, the surety acts as an intermediary who ensures the principal can meet the terms set by the obligee. In this case, it means that if auto consumers are wronged in some unlawful way they can seek justice in the form of financial compensation.
Who Needs a Michigan Motor Vehicle Dealer Bond?
Any business selling vehicles without a bond is considered illegal by the state of Michigan. Surety bonds are required because they protect the public, and the state considers it a serious violation to evade that responsibility. Anyone caught without a Michigan auto dealer bond could be denied a license for life, forced to pay significant fines, or serve jail time in egregious instances. Michigan state law mandates that anyone who whole sells 5+ vehicles (defined as any vehicle required to be titled) inside of a 12-month period must have a Michigan motor vehicle bond. For help figuring out exactly what kind of bond you need, you can rely on Viking Bond Service.
How Much Does a Michigan Auto Dealer Surety Bond Cost?
You are required to get a bond that provides $10,000 of coverage, but the actual cost is only around 1-5% of that. Your premium is based on your credit worthiness, so if your credit is excellent you can expect to pay on the low end. Bond premiums must be paid to activate the bond, and paid again annually to renew the bond. You should consider these premiums to be the cost of doing business.
How to Apply for a Michigan Auto Dealer Surety Bond
It's possible to obtain a bond in as little as a day with the help of a qualified surety bond provider like Viking Bond Service. However, it's always better to apply early in case any issues arise. Completing an application takes only a few minutes and requires the following:
- Information about your business
- Information about the business owners personal finances, if requested
- Any additional information the surety company may request
Approval of your Michigan auto dealer bond application depends on whether or not the underwriters consider the bond application an acceptable financial risk. They evaluate how likely you are to pay back any claims made against the bond. If you have a low credit score or blemishes on your financial record, it's still possible to get a bond from Viking Bond Service. Your premiums will be a little higher, but the application process won't take any longer, and your bond will fully satisfy the Michigan state requirements.
Obtaining a Michigan Auto Dealer Bond
writes Michigan Motor Vehicle Dealer bonds. We can assist both clients with good credit and also clients with bad credit. In either case, we always work to get the best quote for you. Viking Bond Service has partnered with markets that welcome Michigan Motor Vehicle Dealer bond applications and provide competitive quotes for them.
See Also: Cost Expectations for Auto Dealer Bonds
Request a Motor Vehicle Dealer Bond Quote:
To obtain a Michigan Auto Dealer Bond quote or for more information on any of Viking Bond Service surety bonds call us at 1-888-278-7389 and speak with a Viking Bond Service representative, who will be happy to help you. You can also contact us by completing our online application, filling out the contact form on the current page, or emailing us and one of our agents will contact you shortly.
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