Motor Vehicle Dealers - New or New and Used Vehicles
Required for motor vehicle dealers selling new or new and used vehicles in Michigan. Protects consumers and the state from dealer violations of licensing laws.
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About This Bond
The Uniform Vehicle Dealer Surety Bond is a financial guarantee required by the State of Michigan for businesses engaged in selling new motor vehicles or both new and used vehicles. This bond ensures compliance with state licensing laws and regulations governing motor vehicle dealerships.
Motor vehicle dealers who sell new vehicles or operate as combined new and used vehicle dealers must obtain this bond as part of their licensing requirements. The bond serves as protection for both the State of Michigan and consumers who purchase vehicles from licensed dealers.
The bond protects against financial losses that may result from the dealer's failure to comply with Michigan vehicle dealer laws, including issues related to title transfers, warranty obligations, and other regulatory requirements. If a dealer violates these laws and causes financial harm to consumers or the state, claims can be made against the bond for compensation.
This bond requires a $25,000 coverage amount and has a one-year term. The bond is renewable annually to maintain continuous compliance with Michigan's dealer licensing requirements. Dealers must keep this bond active throughout their licensing period to remain in good standing with state regulators.
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At a glance
Michigan Auto Dealer Bond Key Facts
Governed by Mich. Comp. Laws § 257.217(1)(d).
The basics
What Is an Auto Dealer Bond in Michigan?
A bonded title in Michigan is a regular vehicle title the Michigan Department of State issues on the strength of a Vehicle Uniform Surety Bond (form TR-121). You use it when the Secretary of State is not satisfied that you own the vehicle — for example, you were never given a properly assigned title and cannot reach the previous owner. Michigan calls this the “Vehicle Uniform Surety Bond.” It is required when the vehicle is worth more than $2,500 or is less than 10 model years old.
Good to know - A surety bond (or court order) is required when the vehicle is worth more than $2,500 or is less than 10 model years old. If the vehicle is 10 or more years old, worth $2,500 or less, and was purchased in Michigan, you can self-certify ownership with form TR-205 instead — no surety bond.
The bond protects the Michigan Department of State and any prior owner, future buyer, or lienholder if someone else turns out to have a claim on the vehicle. You file it together with your title application — it does not replace the application.
If your vehicle is 10 or more years old, worth $2,500 or less, and was purchased in Michigan, you usually do not need a surety bond. As a last resort, you can self-certify ownership with form TR-205 after you have exhausted every option to contact the previous owner. A vehicle that does not meet those limits needs a surety bond or a court order.
Qualification
What You Need to Qualify for a Michigan Auto Dealer Bond
Approval depends on your dealer license type, required coverage amount, and underwriting factors such as credit.
- You cannot get a properly assigned ownership document (the title) and cannot reach the previous owner for a replacement.
- The vehicle is worth more than $2,500, is less than 10 model years old, or was not purchased in Michigan (otherwise you may self-certify ownership with form TR-205 instead).
- The bond is issued by a surety company licensed by the Michigan Department of Licensing and Regulatory Affairs (LARA).
- The vehicle identification number (VIN) can be verified — if there is no Michigan record, a TR-54 VIN/HIN inspection by a Michigan law enforcement agency is completed.
Step by step
How to Get an Auto Dealer Bond in Michigan: Step by Step
Confirm you need a bond
Michigan requires a Vehicle Uniform Surety Bond only when the Secretary of State is not satisfied as to ownership and the vehicle is worth more than $2,500 or is less than 10 model years old. If your vehicle is 10 or more years old, worth $2,500 or less, and was purchased in Michigan, ask about self-certifying ownership with form TR-205 instead.
Self-Certification of Vehicle Ownership (TR-205)Determine your bond amount
The bond must equal twice (2x) the vehicle's value as set by the Secretary of State. Establish the value with an appraisal from a licensed Michigan dealer or a printout from a recognized online value guide such as Kelley Blue Book, J.D. Power, or Edmunds. Enter your value in the calculator above to estimate your premium.
Buy your Vehicle Uniform Surety Bond
Purchase the bond for twice your vehicle value and complete form TR-121. The bond must come from a surety company licensed in Michigan by LARA, and the effective date must be no later than the date you apply for the title. Once issued, the bond stays in effect for three years.
Vehicle Uniform Surety Bond (TR-121)Complete your Self-Certification of Vehicle Ownership
In addition to the bond, every applicant must complete form TR-205, certifying how you got the vehicle, that you are the rightful owner, and that you have exhausted all options to obtain a properly assigned title. Incomplete forms are not accepted.
Self-Certification of Vehicle Ownership (TR-205)Get a VIN inspection if there is no Michigan record
If the vehicle has no Michigan record, a Michigan law enforcement agency must complete a TR-54 VIN/HIN inspection and you submit it with the bond. Skip this step if Michigan already has a record of the vehicle.
Vehicle Number and On-Road Equipment Inspection (TR-54)File everything at a Secretary of State office
Submit the signed TR-121 bond, the bond company’s authorization, your completed TR-205, any required TR-54 inspection, your title application, and proof of Michigan no-fault insurance if you are also registering. Pay the $15 title fee plus the 6% use tax at a Secretary of State office.
Paperwork
Michigan Dealer Bond Forms & Documents
The surety bond filed with your title application (twice the vehicle value).
View formRequired with the bond for all applicants; also the no-bond path for qualifying older, low-value vehicles.
View formVIN/HIN inspection by a Michigan law enforcement agency when there is no Michigan record.
View formYou'll also need
Cost
How Michigan Auto Dealer Bond Pricing Works
You do not pay the full bond amount. In Michigan, the surety bond must equal twice (2x) your vehicle's value. You pay a premium, which is a smaller percentage of that bond amount.
Your premium depends on the bond amount and underwriting. Use the calculator above for an estimate; your final premium may vary. The $15 title fee, the 6% use tax, and any registration fees are paid to the State of Michigan and are separate from the bond premium.
Worked example
If your vehicle's value is $4,000, the bond amount is 2x that, or $8,000. You pay only the premium on the $8,000 bond, not the full $8,000.
Filing
Filing Information
Michigan Department of State (Secretary of State)
We prepare the issued bond and send you a copy for your records. Filing requirements vary by state, license type, carrier, and bond form.
1-888-767-6424FAQ
Michigan Auto Dealer Bond FAQ
Yes, conditionally. Michigan issues a title backed by a Vehicle Uniform Surety Bond (form TR-121) when the Secretary of State is not satisfied as to ownership and the vehicle is worth more than $2,500 or is less than 10 model years old. If the vehicle is 10 or more years old, worth $2,500 or less, and was purchased in Michigan, you self-certify ownership with form TR-205 instead — no bond.
The bond amount equals twice (2x) your vehicle’s value. You pay a premium — a percentage of that amount — not the full bond amount. Use the calculator above to estimate it.
The bond is twice the value as determined by the Secretary of State. Value is established by an appraisal from a licensed Michigan dealer or a printout from a recognized online value guide such as Kelley Blue Book, J.D. Power, or Edmunds.
Three years. A Vehicle Uniform Surety Bond is issued for three years; after that, if no valid claim has been made, you can obtain a clear Michigan title.
You usually do not need a surety bond. If the vehicle was also purchased in Michigan, you can self-certify ownership with form TR-205 as a last resort, after exhausting every option to contact the previous owner. Newer or higher-value vehicles need a surety bond or a court order.
Yes. Along with the TR-121 bond, every applicant must complete a TR-205 Self-Certification of Vehicle Ownership and provide proof the surety company is licensed in Michigan. If there is no Michigan record of the vehicle, a TR-54 VIN inspection by a Michigan law enforcement agency is also required.
At a Secretary of State office. Submit the signed TR-121 bond, the TR-205 form, the surety company’s authorization, any required TR-54 inspection, and your title application, then pay the $15 title fee plus the 6% use tax. Call 1-888-767-6424 or schedule a visit online with questions.
Sources
Last verified 2026-06-23. Requirements change - confirm current details with Michigan Department of State (Secretary of State) before you file. This page is informational and not legal advice.
FAQ
Michigan Auto Dealer Bond Questions
The cost of a Michigan auto dealer bond is usually a small percentage of the state-required bond amount. Your exact premium depends on the bond amount, license type, business details, and underwriting factors such as credit.
Many auto dealer bonds can be issued the same day after you complete the application. Larger bond amounts or applications that need underwriting review may take longer.
Requirements vary by license type, but most Michigan auto dealers need to complete a short application and purchase the bond amount required by the state before their license can be issued or renewed.
Often, yes. Many states have separate bond requirements for wholesale, retail, broker, or other dealer license types. Choose the bond that matches your Michigan license instructions.
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AutoDealersBond.com is operated by Insurance Services by Shield, a California and Texas licensed insurance agency (CA License #6018195, TX License #3446536). Insurance Services by Shield is not an insurance carrier and does not underwrite bonds or insurance policies. Bond and coverage availability, pricing, and issuance are subject to carrier underwriting approval, eligibility, applicable state requirements, and policy or bond terms. Availability varies by state.
