Opening a Used Car Dealership in Michigan: Dealer License, Lot Rules, and Who to Call
You are buying, opening, or taking over a fixed Michigan used car dealership or retail lot. The example below follows one broad Class B retail-lot purchase and shows who decides each task, what to ask, what to have ready, and the official sources behind it. Wholesale-only, broker, parts, salvage, rental, and other plans have different lanes in the interactive check.
Do not price the deal as if the seller's license and plates belong to the buyer
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Buying assets, inventory, a name, a lease, or even an operating business does not by itself show that the buyer's legal entity, owners, address, class, bond, insurance, training, inspection, plates, and repair setup are authorized.
Ask
“For this exact asset or entity deal, what new application or approved ownership, officer, name, address, plate, and closing steps must occur before the buyer advertises, displays, sells, or uses dealer plates?”
Have ready
Purchase and entity documents, buyer and seller ownership, current license search, classes, address, inventory and title list, plate list, bond and insurance, training, fingerprints, repair setup, notices, and closing timeline.
Who decides
Michigan Department of State and transaction counsel
This route does not decide whether a stock or asset deal preserves any authority or approve the buyer's closing structure.
Open the current dealer record instead of relying on the sign or seller
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The legal entity, owners, class, status, address, administrative actions, and expiration date can matter separately. A wall license or broker statement may be incomplete or stale.
Ask
“What does today's MDOS record show for the exact entity, owners, class, address, status, expiration, and administrative-action history?”
Have ready
State search result, wall license, applications and amendments, entity records, owner and officer list, addresses, notices, orders, renewal proof, and seller explanation for differences.
Who decides
Michigan Department of State, Business Compliance and Regulation Division
This check cannot authenticate a license, clear an administrative action, or say a seller's authority belongs to the buyer.
Compare the lot to the Class A and B established-place rules before signing
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Michigan's current manual describes a permanent nonresidential building, a 150-square-foot office, working utilities, restroom and business phone, at least 1,300 square feet for ten vehicles, 650 square feet for customer parking, surfacing, lighting, a permanent sign, at least 30 posted hours with 15 during weekday business hours, records, and a servicing arrangement.
Ask
“How will MDOS measure and inspect each required part of this exact site, and what must be changed before an application or move can be approved?”
Have ready
Dimensioned site and floor plans, lease or deed, office and parking measurements, utilities and restroom, phone listing, surface and lighting, sign details, hours, records area, repair facility or agreement, photographs, and written local answer.
Who decides
Michigan Department of State and the local zoning and code offices
This route does not measure the lot, pass the inspection, approve shared space, or promise that a feature satisfies MDOS or local rules.
Confirm the retail dealer class before buying inventory
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Class A covers new vehicles under a manufacturer franchise; Class B covers used vehicles. Other vehicle flows can require different or additional classes.
Ask
“Which dealer class or compatible classes cover every planned purchase, title, advertisement, display, wholesale deal, and retail sale?”
Have ready
Vehicle types and title history, new or used status, customers, sellers, expected annual volume, franchise documents, online and physical display, related businesses, and locations.
Who decides
Michigan Department of State, Business Licensing Section
This route names likely lanes but does not select, approve, or combine dealer classes.
Check the property history separately from the dealer-site fit
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A former dealer lot can also have repair, body work, washing, fuel, tanks, drains, waste, fill, or contamination history. Passing a dealer-site screen would not make the property clean or settle buyer protections.
Ask
“What Phase I, records, tank, drain, waste, vapor, sampling, Michigan BEA, due-care, renovation, and land-work questions should be settled before purchase, possession, or occupancy?”
Have ready
Property and parcel records, prior uses and operators, Phase I and sampling, tanks and closures, spills and cleanup, drains and separators, repair and wash areas, waste records, restrictions, building materials, site work, possession date, and transaction advice.
Who decides
Use the Michigan Commercial Property Check and qualified environmental and legal professionals
This dealer route does not perform environmental due diligence, declare the property clean, preserve liability protections, or replace environmental or legal advice.
Get the local answer in writing for the whole dealership use
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Dealer licensing requires zoning and municipal approval, while local review can separately address vehicle display and storage, customer parking, repair, washing, signs, lighting, access, hours, outdoor work, and occupancy.
Ask
“Does the local government allow every planned use at this address, and which zoning, site-plan, building, fire, sign, driveway, occupancy, or business approvals come first?”
Have ready
Legal parcel and municipality, written use description, site and floor plans, vehicle counts, display and storage, parking, signs, lighting, hours, deliveries, repair and wash work, utilities, and proposed construction.
Who decides
The city, village, or township land-use and code offices
A local yes does not issue a dealer license, and an MDOS license does not replace local approval.
Put the applicant and the property document on the same page
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The dealer applicant needs a real right to occupy the qualifying premises. A letter of intent, option, seller promise, related landlord, or unsigned lease can leave the application and closing exposed.
Ask
“What signed property document must name the applicant, cover every required area and term, and stay contingent on the needed dealer and local approvals?”
Have ready
Applicant legal name, deed or lease, options and contingencies, parcel and suite, site plan, shared areas, term and possession date, construction duties, signs, utilities, repair area, and landlord relationships.
Who decides
Michigan Department of State, the local office, and transaction counsel
This route does not interpret a lease, confirm marketable title, or say a property document is sufficient.
Audit the inventory, titles, plates, customer deals, and state file before closing
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The buyer can inherit cars without usable titles, open RD-108 work, plate problems, consumer promises, missing deal jackets, salvage or odometer issues, and records that do not match the seller's story.
Ask
“Can the seller reconcile every vehicle, title, lien, plate, open customer transaction, complaint, warranty, record, and state submission before the purchase money moves?”
Have ready
Inventory by VIN without entering it here, assigned titles and liens, odometer and salvage disclosures, police book, deal jackets, RD-108 and branch receipts, plate log, Buyers Guides, warranty and service-contract files, complaints, audits, notices, and corrective work.
Who decides
Michigan Department of State, qualified counsel, and the buyer's title and accounting reviewers
This route does not clear a title, lien, VIN, odometer, plate, consumer claim, warranty, or open transaction.
Keep tax clearance and UIA successorship in the closing file
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Michigan warns that a purchaser of a business or its stock of goods can face seller tax liability without the statutory escrow and tax-clearance process. UIA successorship and employee facts are separate.
Ask
“What money should remain in escrow, what must the seller request and disclose, and what Treasury and UIA records must be resolved before closing?”
Have ready
Purchase agreement and allocation, seller tax-clearance request and certificate, Treasury correspondence, UIA transfer and rate records, employee list and payroll dates, liens, escrow instructions, and closing statement.
Who decides
Michigan Department of Treasury, UIA, and transaction counsel
Tax clearance does not clear the dealer license, titles, environmental conditions, contracts, or other liabilities.
Map dealer reconditioning separately from customer repair
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Work only on dealer-owned inventory can follow a different repair-registration analysis than customer-paid work, but it does not erase the Class A or B servicing requirement. Mechanical work, body and paint, fluids, parts, washwater, drains, waste, air emissions, and worker hazards still need the right path.
Ask
“For each reconditioning task, what dealer-servicing, repair-registration, mechanic, air, drain, wastewater, waste, fire, building, and safety duties apply before work starts?”
Have ready
Vehicle ownership and task list, on-site registered facility or service agreement, workers and mechanic credentials, lifts and shop equipment, paint and welding, parts and fluids, wash methods, drains and outlets, waste records, ventilation, fire systems, zoning, and customer-work policy.
Who decides
Michigan Department of State and the local, environmental, and safety offices tied to the work
This route does not classify a repair-facility exception, approve the dealer servicing setup, or cover repair, body work, washing, waste, air, or workplace safety in full.
Detailing, pressure washing, tunnel or bay washing, engine cleaning, and outdoor washing can add sewer, groundwater, drain, reclaim, chemical, and waste questions.
Ask
“Where does every wash, detail, floor-cleaning, overflow, reclaim purge, grit, and sludge stream end, and what written approval covers it?”
Have ready
Wash methods and locations, water and chemicals, drains and final outlets, separator and reclaim records, sewer or groundwater approvals, residues, mobile work, and property history.
Who decides
Use the Michigan Car Wash Site Check and the responsible water or sewer office
This dealer route does not approve a washwater path.
Settle the legal applicant, owners, officers, fingerprints, and control
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The application, entity records, assumed name, bond, insurance, property document, financing, and people who direct the dealership need to tell one consistent story.
Ask
“Who must be disclosed, fingerprinted, added, removed, or approved, and what filing is needed for this ownership, officer, entity, name, or control change?”
Have ready
Entity and assumed-name records, ownership chart, officers and relevant LLC members, applications, fingerprint receipts, financing and management agreements, profit rights, options, seller role, and amendment dates.
Who decides
Michigan Department of State, Business Licensing Section
This route does not approve an owner, decide who must be fingerprinted, or give advice on entity or deal structure.
Michigan Business RoadmapMichigan Department of Licensing and Regulatory Affairs · Reviewed July 11, 2026
Put Class B training on the calendar
Official check
Original Class B applicants have a prelicensure training step, and the designated continuing-education person has a 90-day and recurring 24-month path after licensing.
Ask
“Who must attend the prelicense session, who will be the designated continuing-education person for each location, and when is proof due?”
Have ready
Applicant and officer names, dealership name and address, training registration and completion, designated people by location, license issue date, reminders, and staff roles.
Who decides
Michigan Department of State, Business Regulation Section
This route does not enroll a person, decide an exception, or certify attendance.
Match the bond and insurance to the applicant, class, location, and plates
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The current application packet calls for a $25,000 bond for nonexempt classes, while dealer classes that use plates can have fleet-insurance requirements. Names, locations, dates, coverage, and cancellations matter.
Ask
“Which bond and Michigan fleet-insurance documents must be active for this applicant, class, address, locations, and plate request—and what happens if either changes or is canceled?”
Have ready
Applicant legal and assumed names, owners, class, locations, bond form and power of attorney, carrier and agent details, policy and certificate, effective dates, plate request, claims or cancellations, and renewal plan.
Who decides
Michigan Department of State and qualified Michigan bond and insurance professionals
This route does not quote coverage, approve a bond or policy, or say a class is exempt without MDOS confirmation.
Settle the registered repair-facility arrangement—even for “as is” sales
Official check
Class A and B dealers need an on-site registered repair facility or a written servicing agreement with a registered facility within ten miles. Selling wholesale or “as is” does not remove the application requirement.
Ask
“Will the dealership operate its own registered repair facility or use a signed agreement with a currently registered facility within ten miles, and what work will each perform?”
Have ready
Repair-facility search and registration, agreement, distance, vehicle types, services, site and zoning, mechanics, customer work, reconditioning, records, hours, ownership, and conspicuous-posting plan.
Who decides
Michigan Department of State, Business Licensing Section
This dealer route does not register a repair facility or cover customer repair, mechanic credentials, estimates, shop waste, drains, or air permits in full.
Build one application file and prepare for the location inspection
Official check
The application can depend on the exact class, legal applicant, fingerprints, property, local approval, site, training, and—when that class requires them—bond, insurance, repair, franchise, plate, fee, and inspection items. Class A and B dealers request at least two dealer plates. The current packet says MDOS sends fingerprint instructions after it receives the application, so applicants should not fingerprint early. Missing or mismatched pieces can delay the plan.
Ask
“What is the current application and inspection checklist for this class and transaction, and which item must be approved before inventory, signs, plates, records, or opening?”
Have ready
Current application packet, entity and assumed-name files, applicants and fingerprints, training, bond, insurance, franchise if any, property document, zoning form, site plan and photos, repair agreement, fees, license history, and target dates.
Who decides
Michigan Department of State, Business Licensing Section
A complete-looking file is not an approval, license, plate allotment, or passed inspection.
Confirm the Treasury sales-tax account for the selected dealer class
Official check
The current dealer application directs applicants to Michigan Treasury to determine whether the dealer class needs a sales-tax license. Dealer class, vehicle and parts activity, retail and wholesale customers, trade-ins, fees, and transaction records can affect the tax setup.
Ask
“Which Michigan sales, use, withholding, and other tax registrations apply to this exact dealer class and activity, and what account number and filing process must be ready for the application and first transaction?”
Have ready
Legal entity and assumed name, FEIN, dealer classes and activities, vehicle and parts sales, retail and wholesale customers, trade-ins and fees, locations, employees, prior owner or account information, Treasury correspondence, and accounting setup.
Who decides
Michigan Department of Treasury
This route does not issue a tax license, classify a sale, calculate tax, transfer a seller account, or replace dealer-specific tax advice.
Open the finance and customer-data path before offering payment plans
Official check
Taking two or more scheduled payments, holding or buying installment contracts, arranging credit, operating a sales-finance company, selling add-ons, or receiving customer finance records can raise separate DIFS, federal consumer, privacy, security, contract, and record duties—even if future sales are described as cash-only.
Ask
“Which installment-seller, sales-finance, credit-arranging, add-on, privacy, data-security, disclosure, and contract rules apply before the first application or promise to a customer?”
Have ready
Payment schedule and deposits, sample contracts and ads, lender and assignee agreements, licenses, interest and fees, add-on products, credit application and adverse-action flow, customer data map, service providers, security program, complaint and repossession plan.
Who decides
Michigan DIFS, the FTC, and qualified consumer-finance counsel
This route does not issue a finance license, approve a contract or rate, calculate disclosures, or cover lending, privacy, repossession, or add-on products in full.
Set up the title, plate, police-book, deal-jacket, and open-transaction controls before sales
Official check
Michigan requires proof of ownership for vehicles offered for sale and has detailed title, odometer, salvage, RD-108, plate, purchaser-document, and record duties. A clean lot does not mean a clean file.
Ask
“What source document and record trail must exist from acquisition through display, test drive, sale, title and registration submission, plate use, and final retention?”
Have ready
Inventory control by VIN outside this tool, assigned titles and liens, odometer and salvage disclosures, purchase records, police book, deal jacket, RD-108 workflow and receipts, plate log and authorizations, purchaser copies, training, audits, backups, and correction process.
Who decides
Michigan Department of State, Business Compliance and Regulation Division
This route does not validate a VIN, title, lien, odometer, tax, plate use, form, filing deadline, or record-retention decision.
Match every used vehicle's Buyers Guide to the final written deal
Official check
Most dealers offering used vehicles must display the federal Buyers Guide before a customer inspects the vehicle. Warranty language, Spanish-language sales, service contracts, and the final sale papers must agree.
Ask
“Which Buyers Guide version, language, warranty statement, service-contract treatment, display method, and final signed copy applies to each used vehicle and negotiated deal?”
Have ready
Inventory and Buyers Guides, warranty and service-contract terms, advertisements, languages used in sales, sales forms, customer copies, complaint process, and staff training.
Who decides
Federal Trade Commission
This route does not decide warranty law, approve “as is” language, or replace federal and Michigan consumer-law review.
Salespeople, office staff, lot attendants, detailers, drivers, mechanics, and retained seller staff can add employer registration, payroll, workers' compensation, safety, training, and vehicle-use duties.
Ask
“What Treasury, UIA, workers' compensation, payroll, safety, training, driving, and record steps must be ready before each worker starts?”
Have ready
Worker roles and start dates, employee or contractor facts, pay, driving and plate access, shop and lot hazards, training, payroll accounts, insurance, seller workforce records, and safety plan.
Who decides
Michigan Treasury, UIA, Workers' Disability Compensation Agency, and MIOSHA
This route does not classify workers, run payroll, price insurance, approve plate use, or provide a full employment or safety review.
Some questions have no safe generic answer without the exact address, records, people, or equipment. The interactive check keeps each one visible instead of turning it into a silent gap:
The exact site and legal city, village, or township are not both confirmed.
The current state search, inventory titles, open RD-108 work, and dealer-plate file are not all confirmed.
The applicant legal entity and full owner and officer list are not both confirmed.
Whether fingerprint steps apply, were requested in the correct sequence, and are complete is unsettled.
The application, municipal zoning form, and prelicense inspection file are not all confirmed.
The Class A or B bond, fleet insurance, and minimum dealer-plate request are not all confirmed.
The applicable Class B prelicense and continuing-training sequence is incomplete.
The permanent building, working utilities and restroom, business phone, sign, and written zoning answer are not all confirmed.
A current on-site repair registration or signed agreement with a current registered facility within ten miles is not confirmed.
The seller's administrative, deal-jacket, odometer, salvage, Treasury, and UIA file is incomplete.
The police book, deal jackets, odometer and salvage disclosures, bond, and insurance records are incomplete.
Used-vehicle Buyers Guides, warranty promises, and related records are not confirmed.
Coverage receipt
What this guide covers
This is a starting call sheet for a fixed retail or wholesale dealer path, not permission to sell vehicles.
Checked
fixed Class A or Class B retail-dealer starting lane, transaction, live state record, location, and current condition, applicant, site, local approval, application, records, and operating setup, business-purchase and seller-file questions, separate finance and customer-data handoff, separate route handoffs.
Still decided elsewhere
Michigan Department of State Dealer Services, the local government, and every separate regulator still decide the real application, site, inspection, license, title, plate, finance, and side-activity questions.
Not checked
A dealer class, license, site inspection, zoning approval, ownership or address amendment, bond, insurance policy, plate allotment, title, or finance license. A full dealer operating manual for advertisements, warranties, privacy, credit, repossession, complaints, taxes, records, salvage, repair, towing, rentals, employment, environmental work, or emergencies. Legal, accounting, engineering, environmental, insurance, lending, title, or transaction advice.