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Frequently Asked Questions
 

FAQs relating to dealership restructuring and franchise changes

Please click the links below for additional information. 

These documents will be updated as more information becomes available.

Guidelines for dealership restructuring

  • Option 1: Change of license classification from A and B to class B only
  • Option 1a: Change of license classification from B to A and B
  • Option 2: Change of name; removing a franchise
  • Option 3: Dealership closing

Sample letters

Please note that these letters include various options that may pertain to your situation.  Dealers should choose the best option for your situation, make necessary changes and delete additional text.

Please review this document for answers to these questions:

  • If I no longer have a manufacturer agreement to sell new vehicles, can I continue to sell used vehicles? 
  • What is necessary to move my used car inventory from my closed location to another location I own? 
  • When am I required to terminate my vehicle dealer surety bond? 
  • How do I check to see if the name change I would like to make is available? 
  • What steps do I need to take to terminate one franchise, but continue selling other franchised new vehicles? 
  • What forms are necessary to add a franchise to my existing franchises?

If you have any questions related to licensing, please contact Jean Quinn:

e-mail jquinn@michiganada.org • phone (800) 292-1923 fax (517) 351-3120


If you have a question that is not answered here, or if you would like more information about any topic, please call our office at (800) 292-1923.

Where can I download the State Farm Salvage Vehicle list?
Click on this link to access the current listing of the State Farm salvage vehicles in Michigan.

How do I change the name and/or address of my dealership?
For a change of name only, you will need the Vehicle Dealer License Application change of name/address form along with a copy of your amended Articles of Incorporation. For change of address only, submit the Vehicle Dealer License Application change of name/address form, the Vehicle Dealer Zoning Certification, and you will need to submit a sketch that accurately describes the business location. This should include the office area located within the building, the location of the lot and the cross streets in detail.

I'm opening up a new dealership. What forms do I need to get a new dealer's license?
MADA provides all the forms necessary to open a new and used car dealership that will comply with the State of Michigan. Contact our Membership Services Director Jean Quinn at jquinn@michiganada.org for assistance.

New process in 2010: before issuing a new dealer licence, a pre-license inspection of the business location will be conducted by the State of Michigan. The business address must meet the established place of business requirements.  For more information, please visit the the state's Web page detailing the Dealer License Application Packet.

How do I apply for an off-site sale in the same county as my current location.
Submit the Vehicle Dealer Supplemental Location Application form, Vehicle Dealer Zoning Certification and a Michigan Vehicle Dealer Close Out Statement for Temporary Location form. (Refer to the publications/forms question below, or visit the Department of State's forms Web page.) You will need to submit a sketch that accurately describes the business location. This should include the office area located within the building, the location of the lot and the cross streets in detail. Enclose either a franchise approval to sell new vehicles at the sale location, or self-certify that you have authorization to sell new vehicles at the sale location with those specified dates. If you are only selling used vehicles at the off-site location, you will need a letter signed by the owner stating that the dealership will only be selling used cars there.

How do I apply for an off-site sale in a different county.
New state legislation no longer allows out-of-county sales

What is Michigan's limit on doc fees?
Documentary Preparation Fee Adjustment for 2009   **Doc fee handout**
The Commissioner of the Office of Financial and Insurance Regulation has reviewed the documentary preparation fee for adjustment and has determined the maximum shall be adjusted to $190.00 to reflect the cumulative percentage in the consumer price index for calendar years 2007 and 2008. From this date forward, the documentary preparation fee shall not exceed 5% of the cash price of the motor vehicle or $190.00, whichever is less.  Bulletin 2009-06-CF

What are regulations on damage disclosure?
Dealers must disclose damage to the consumer if the amount exceeds 5 percent of the Manufacturer's Suggested Retail Price (MSRP) or $750 for surface coating repairs, corrosion restoration or a combination of the two. The disclosure must be made before the consumer signs the RD-108.

Do I need to report cash transactions?
Any transaction involving $10,000 or more in cash must be reported to the Internal Revenue Service (IRS) by completing FinCen Form 8300. This is revised version of the Cash Reporting Form due to the passage of the USA Patriot Act of 2001. You may obtain a copy of the revised form by clicking on www.irs.gov/pub/irs-pdf/f8300.pdf.

Where can I get a copy of the Vehicle Dealer Supplemental Form?
The Michigan Vehicle Dealer Supplemental Report Form 92 provides dealers with a sales tax credit. It should be filed with the Department of Treasury in conjunction with your Combined Return for Michigan Taxes Form 160. Go to www.michigan.gov/documents/92f_4862_7.pdf to download this form and its instructions.

What are the restrictions on the sale or lease of an 11 - 15 passenger van?
Dealerships are prohibited from selling or leasing these vehicles to public, parochial or private schools if children are to be transported to and from school or school related activities. This rule applies to the "renting" of these vans.

I am looking for information on tax for sales to Native Americans.
The Michigan Department of Treasury revised its policy in 2003. Under the new rules, tribal government entities and individual Native Americans whose communities have "Tribal Agreements" with the Department of Treasury may make tax-exempt purchases of vehicles if they provide a Tribal Exemption Certificate (Form 3998) and a letter of authorization from the State of Michigan. MADA members may access additional information on this topic.

I want to sell vehicles on Sunday. Are there rules governing Sunday sales?
Yes, Sunday sales are prohibited in some counties. Michigan Public Act 66 of 1953 prohibits dealerships located in counties with a population of more than 130,000 from doing business on Sunday. The act prohibits the opening of any retail or wholesale new and used vehicle business from engaging in business (i.e. buy, sell, exchange, trade or participate in negotiation) on Sunday. It also applies to vehicle leasing. The following counties are currently PROHIBITED from doing business on Sunday: Berrien, Calhoun, Genesee, Ingham, Jackson, Kalamazoo, Kent, Livingston, Macomb, Monroe, Muskegon, Oakland, Ottawa, Saginaw, Saint Clair, Washtenaw and Wayne.

Where do I find the publications and forms from the Secretary of State's Web site?
Go to the Department of State's Web site at www.michigan.gov/sos, choose services for businesses, then click on automobile dealers, publications and forms.  Or click this direct link.

What do I need to know about renewing my license?

Please click on the appropriate links below.  If you have any questions, contact Jean Quinn at (800) 292-1923 or jquinn@michiganada.org.

Dealer license and plates
(Regulated by the Secretary of State)

Check your renewal status: Once you open this page, choose the region in which your dealership is located and then choose the county.  An alphabetical list of all licensed dealerships (new and used) in the county will be listed. Please note: During the period of time when dealer licenses are being renewed, the Secretary of State will include a renewal status column. If the SOS has received your dealership's renewal paperwork, the column will either read "application received" or "license printed." At any other time of year, the status column is not present.

Get helpful tips about completing your renewal application with this brochure from MADA.

 
Repair facility license
(Regulated by the Secretary of State)
Check your renewal status: Once you open this page, choose the region in which your dealership is located and then choose the county.  An alphabetical list of all licensed repair facilities in the county will be listed.
 

Installment seller license                    

(Regulated by the Office of Financial and Insurance Regulation)

MADA would like to offer our experience and no-cost renewal services. Please mail your completed renewal application (which was mailed by OFIR) to us and we will review it for accuracy before hand-delivering it to the approprate department.

Please review this MADA brochure for additional information.

Important updates for 2010:

  • Permission request letter:  If you only have a corporate name, a permission letter is not required.  If you have a dba name, but use only your corporate name or only your dba name(s), a permission letter is required. OFIR will be reviewing all dealer files to ensure dealers are using the appropriate business name on their bank contracts.If you do not have a letter on file, or if you are unsure, MADA recommends including a permission request with your renewal. MADA has prepared this sample permission request letter.
  • OFIR is also reviewing all corporate and dba names associated with a dealership prior to renewing an installment seller license. To ensure that your renewal is not delayed, MADA suggests that you check your corporate and dba names to make sure they are active and renewed with the Department of Energy, Labor and Economic Growth (DELEG). Please check your corporate and dba names with DELEG .

Reminder: current wall licenses do not display an expiration date. Therefore, new wall licenses will not be mailed unless changes are made to dealership information listed on the license.

Once your renewal has been received by OFIR, use this link to check your renewal status. Please read this important information prior to using the search form.  Open the search form to look up your dealership.  Not all fields need to be completed in order to perform a search.  OFIR suggests that the less information entered, the better the search will perform.  Only one or two words typed in the "company name" field should find your particular dealership.  Once you find your dealership (the search may have found more than one company), click on your dealership's name to open the detailed page for your dealership.  Look under “reporting dates.”  If your installment seller license has been processed and renewed by OFIR, the date that the license was renewed will be listed next to the current calendar year.

How do I join your association?
If you sell franchised new cars and/or trucks and are licensed with the State of Michigan you can contact Jean Quinn at jquinn@michiganada.org to become a member. Membership dues are based on previous year vehicle sales.

How can I get additional/replacement dealer plates?
Submit the form Application for Additional/Replacement Plates/Tabs with the correct fees to MADA. (Refer to the publications/forms question above, or visit the Department of State's forms Web page.)

What forms do I need to apply for an installment seller's license?
Submit an Installment Seller License Application, along with a sample of each Sales Finance Company contract(s) you will be using.  Click here for a direct pdf link with license application procedures and necessary forms, provided by OFIS.

What forms do I need to apply for a repair facility license?
You will need to submit a Motor Vehicle Repair Facility Registration Application (AR-0012). (Refer to the publications/forms question above, or visit the Department of State's forms Web page.)


 

MADA
P.O. Box 2525
East Lansing, MI 48826-2525
Map to our East Lansing office
(517) 351-7800
E-mail: info@michiganada.org

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