Dealer Licensing - Classifications

Dealer Licensing - Classifications


Requirements. A dealer license may be issued in one or more classifications (classes) depending on the business activities of the dealer. Michigan law imposes different obligations upon different classes of dealers, and not all classifications are “compatible”. The following descriptions indicate what activities each dealer class allows and which classes are compatible.



Class A - New Vehicle Dealer A licensed new vehicle dealer buys and sells new vehicles under a franchise agreement or contract with the manufacturer of the new vehicle. A Class A license is compatible with B, C, and E; or B, E, and R classes described below. As a general rule, Michigan law provides manufacturers, importers, and distributors shall not sell any motor vehicle directly to a retail customer other than through its franchised dealers.

Requirements.

  • Copy of Franchise or Affidavit
  • Repair Facility Registration or Service Agreement
  • Secretary of State Branch Designation
  • Fleet Insurance Certificate
  • Minimum of 2 dealer plates
  • $10,000 Vehicle Dealer Surety Bond

License Fee.    $10.00


Class C - Used Vehicle Parts Dealer This dealer buys or otherwise acquires late model major component parts (see Chapter 5) for resale, either at wholesale or at retail. This dealer may also acquire whole vehicles to dismantle them for the resale of their parts, selling the remains as scrap. Class C, and Foreign Salvage Vehicle Dealers (Class H) and Automotive Recyclers (Class R), are the only classes which can buy late model distressed vehicles (salvage or scrap vehicles) or late model major component parts through Michigan auctions, brokers, or salvage pools in Michigan.

Class C and Class R are compatible with A, B, and E; or E and F. Class C and Class R are NOT COMPATIBLE with each other or with Class D or Class G.

Requirements.

  • Repair Facility Registration or Service Agreement (required only if parts installed)
  • Secretary of State Branch Designation
  • Workers' Compensation Insurance

License Fee.    $100.00


Class D - Broker A broker is a dealer who, for compensation, either brings a buyer and seller together, negotiates the terms of a transaction, or displays a vehicle offered for sale. In the broker's role regarding the sale, purchase, lease or exchange of vehicles or salvageable parts, the broker does not have title or other legal interest in the vehicle or salvageable part. A person who conducts a vehicle auction is a type of broker and requires a Class D license.  Brokers cannot buy vehicles at auctions.  Class D is compatible only with Class G.

Requirements.

  • Secretary of State Branch Designation
  • $10,000 Vehicle Dealer Surety Bond

License Fee.    $10.00


Class E - Distressed Vehicle Transporter This class of dealer may buy, transport, and sell vehicles only to a Class C Used Vehicle Parts Dealer; Class F Scrap Metal Processor; or Class R Automotive Recycler.This dealer may NOT dismantle vehicles or sell parts.Class E is compatible with A, B, and/or C; or C and/or F; or A, B, and/or R; or R and/or F.

Requirements.

  • Zoning Approval
  • Secretary of State Branch Designation

License Fee.    $10.00


Class G - Vehicle Salvage PoolThis dealer stores and displays damaged or distressed vehicles for insurance companies.  Class G is compatible only with Class D.

Requirements.

  • Zoning Approval

License Fee.    $10.00


Class G - Vehicle Salvage PoolThis dealer stores and displays damaged or distressed vehicles for insurance companies.  Class G is compatible only with Class D.

Requirements.

  • Zoning Approval
  • Secretary of State Branch Designation

License Fee.    $10.00


Class H - Foreign Salvage Vehicle Dealer This dealer is licensed in another state and is engaged in this state in the business of purchasing, selling, or otherwise dealing on a wholesale basis in salvageable parts or late model distressed vehicles. This dealer buys or otherwise acquires late model major component parts for resale, either at wholesale or at retail. The dealer may also acquire whole vehicles to dismantle for the resale of parts, selling the remainder as scrap.


Class R - Automotive Recycler This dealer buys or otherwise acquires late model major component parts for resale, either at wholesale or at retail. This dealer may also acquire whole vehicles to dismantle them for the resale of their parts, selling the remains as scrap.

Requirements.

  • Repair Facility Registration or Service Agreement (required only if parts installed)
  • Secretary of State Branch Designation

License Fee.    $100.00


Class W - Wholesaler Vehicle License This dealer engages in the business of buying and selling used vehicles from and to licensed vehicle dealers.  The Class W license is compatible with a Class C or Class R license.  Wholesalers cannot buy, sell or otherwise deal the vehicles to a person other than a licensed vehicle dealer.