Buying a Vehicle in Michigan

Vehicle History Reports or Other Relevant Vehicle Records

A vehicle history report (VHR) is recommended before purchasing a used vehicle in Michigan. This report offers a comprehensive overview of the vehicle's past, encompassing accidents, title information, and ownership history.

To request a VHR, an individual can use the National Motor Vehicle Title Information System (NMVTIS). The system's approved third-party data providers typically require the vehicle identification number (VIN) or license plate number and charge a service fee.

Aside from the VHR, individuals can request other vehicle records through the MDOS Online Services portal. An optional record lookup account can be created to expedite future requests, but it is not mandatory to obtain a record.

Buyers who opt out of online services may submit their record request through mail. The Non-Account & Individual Record Request form (BDVR-154) or Record Request for Account Holders form (BDVR-153) should be filled out and mailed. Payment via check or money order is required, and submissions should be directed to:

Individuals can also obtain their vehicle records at an SOS branch office. Scheduling a visit in advance is recommended to avoid long wait times and increase the likelihood of prompt service. A valid driver's license or identification card is required, and a payment of $15 can be made via cash, check, money order, or credit/debit card.

What Are Permissible Reasons for Requesting a Vehicle Record in Michigan?

Potential buyers seeking a vehicle record they do not own must adhere to the permissible use guidelines of the Driver's Privacy Protection Act (DPPA). These guidelines permit access for insurance purposes, employment verification involving driving, and use in legal matters.

Permissible reasons for requesting vehicle records under Michigan law are outlined in MCL Section 257.208c. These reasons include the following:

• Official use by government agencies
• Use in legal proceedings
• News reporting
• Personal requests or authorized disclosure
• Notification regarding abandoned, towed, or impounded vehicles
• Permitted use by licensed private investigators and security agencies
• Verification of commercial driver's licenses
• Rental decisions
• Legitimate research activities
• Insurance purposes
• Private toll transportation operations
• Safety and regulatory compliance
• Fraud prevention and debt recovery by legitimate businesses

Pre-Purchase Inspection

A vehicle safety inspection worksheet in Michigan provides a preliminary evaluation of a vehicle's condition. While informative, it should be different from a comprehensive pre-purchase inspection conducted by a qualified mechanic.

Though not mandatory, a pre-purchase inspection is highly recommended for all vehicle purchases and particularly advisable for vehicles branded with a salvage title due to prior extensive damage.

This professional mechanic testing offers a detailed assessment of the vehicle's mechanical soundness, identifying potential issues that may need to be apparent in the initial evaluation. Prospective buyers should consider engaging a qualified mechanic to conduct a pre-purchase inspection to evaluate the vehicle's mechanical and structural integrity comprehensively.

If the car bears a salvage title, the buyer should request a copy of the salvage vehicle inspection certificate from the seller, verifying that the vehicle has passed the required inspection and is eligible for registration and titling.

Odometer Disclosure Statement

The buyer of a used vehicle in Michigan should know the state's odometer disclosure requirements as mandated by MCL Section 257.233a. These regulations mandate that the seller provides a complete and accurate record of the vehicle's mileage at the time of sale. This disclosure takes the form of the BDVR-108 MDOS Odometer Mileage Statement.

The buyer will receive a copy of the completed BDVR-108 form during the purchase process. The MDOS or SOS may request this document for verification.

Ownership Transfer

In Michigan, transferring vehicle ownership involves specific actions by both parties. After the seller completes their part on the Application for Michigan Vehicle Title (TR-11L), the buyer plays a crucial role in finalizing this process to ensure legal ownership.

They must carefully fill out their designated sections on the original vehicle title, providing accurate information such as their full name, address, and signature.

The buyer must gather the necessary documentation, including the completed original vehicle title, the completed TR-11L form, and proof of Michigan No-Fault insurance if they intend to register the vehicle.

Finally, the buyer must visit a SOS branch office to submit the gathered documents and the required fees.

Bill of Sale

Michigan vehicle buyers should be aware that while a bill of sale isn't mandatory, completing the state-recommended TR-207 Bill of Sale safeguards their purchase. This document formally transfers vehicle ownership from seller to buyer, offering concrete proof of ownership.

If there are any disagreements or misunderstandings with the seller, the TR-207 serves as a reference to clarify the transaction's terms. It also streamlines the vehicle registration process with the Michigan SOS, potentially becoming a required document.

Registration Tabs and License Plates

After submitting the completed RD-108 Application for Title and Registration and the necessary documents, the buyer will receive a Temporary Registration Permit (BFS-4). This permit, which can be placed in the vehicle's rear window or license plate area, allows the buyer to legally operate the vehicle while awaiting the official registration and license plates.

Note that transferring a license plate is permitted between vehicles owned by the same person or when selling to an immediate family member. This process requires a visit to the SOS office with the current vehicle registration, title, or application, as applicable.

Lemon Law in Michigan

Michigan's Lemon Law protects buyers or lessees of new or qualifying used vehicles who experience significant defects with their purchase. This applies to vehicles bought or leased within Michigan or by Michigan residents, providing a wide range of consumer protection.

Eligibility and Process

A buyer or lessee may qualify for a refund or a replacement vehicle under "lemon laws" if a vehicle defect continues despite a reasonable number of repair attempts. This is generally applicable when the same issue arises four or more times within two years or if the vehicle is out of service for 30 days or more during the warranty period or the first year following delivery.

To initiate this process, a formal written notice must be sent to the manufacturer via the return receipt requested. This must be done within the warranty period or one year from the vehicle's delivery date, after three repair attempts for the same defect, or 25 days out of service for repairs.

The notice should include a detailed description of the defect(s) and a comprehensive repair history. It should also explicitly request either a refund of the purchase price or a replacement vehicle.

Refund, Replacement, or Reimbursement

If the manufacturer cannot fix the vehicle defect after a reasonable number of attempts, the buyer or lessee has the right to choose a refund or a comparable replacement vehicle.

Refunds cover the purchase or lease price, including options, modifications, and applicable charges, minus a reasonable allowance for vehicle use and any unrelated damage. The manufacturer will also reimburse towing and reasonable rental car expenses incurred due to the defect.

If the manufacturer fails to resolve the issue, the buyer or lessee can file a complaint with the Michigan Department of Attorney General or call 877-765-8388.

Vehicles Purchased Out-of-State

Titling and registering a vehicle purchased outside of Michigan requires buyers to visit an SOS office. The necessary documents include the same ones needed for in-state purchases, plus the out-of-state vehicle registration. If there is a lien on the vehicle, a lien termination statement or title signed by the lending institution must also be presented.

In cases where a lienholder holds the out-of-state title, buyers must provide all previously mentioned documents along with one of the following:

• A photocopy or fax of the out-of-state title
• A memo title
• A recently validated title application
• A vehicle record printed on the issuing state's Department of Motor Vehicles letterhead verifying the vehicle's title in that state

Under these circumstances, the Michigan DOS will issue a limited memo registration. However, the out-of-state title will remain the official ownership document and not be converted to a Michigan title.

Vehicles Purchased Overseas

Vehicles purchased overseas and intended for use in the U.S. must meet specific standards. These standards, established by the Environmental Protection Agency (EPA) and the Department of Transportation (DOT), cover emissions, safety, and other technical aspects.

The Manufacturer's Certificate of Origin accompanying the vehicle will indicate if it has been manufactured to meet these U.S. standards.

Importing a vehicle from overseas requires using a certified importer. This importer is responsible for ensuring compliance with federal regulations, converting the odometer to miles, and handling customs duties.

Suppose the vehicle was manufactured for sale in the U.S. In that case, the buyer must provide an Entry Summary (CBP Form 7501) with a stamp and standard documentation. This requirement is specific to vehicles manufactured for the U.S. market and facilitates a smooth import process.

If the vehicle was not originally manufactured for sale in the U.S., additional documentation is needed:

• U.S. DOT Form HS 7
• U.S. EPA Form 3520-1
• A statement of compliance or waiver from both the DOT and EPA

These additional documents confirm the vehicle meets the necessary safety and environmental standards for operation in the U.S.

Taxes

The buyer is responsible for paying a 6% sales tax on the purchase price of a vehicle. The dealer typically collects this tax at the time of purchase. The buyer will receive a receipt for this transaction.

However, if the vehicle was purchased from a private seller or an out-of-state dealer, the buyer must pay a 6% use tax instead. To do this, the buyer must complete Form 518 Registration for Michigan Taxes. The completed form and payment should be submitted to the Michigan Department of Treasury.

Title and Registration Fees

A title fee is assessed to transfer ownership of a vehicle. In Michigan, the title fee is a standard $15. However, additional costs, such as a $10 late title fee, may apply if the title is transferred after 15 days of purchase.

The registration fee is determined by a formula that considers the vehicle's specifications (use the Michigan SOS Registration Fee Calculator for an estimate) and a plate fee that varies depending on the chosen plate type.

In addition, a $15 title transfer fee and a $10-$15 plate transfer fee apply, with the latter depending on whether the vehicle was purchased privately or from a family member.

Note that a $15 late fee is incurred if the title transfer is completed after 15 days of purchase.

Personal Injury Protection

This covers all reasonable and necessary medical expenses for a lifetime up to the chosen coverage limit. It also covers wage loss and replacement services for up to three years after the accident.

Property Protection

This covers up to $1 million for damage caused to other people's property in Michigan, including buildings, fences, and parked vehicles. It does not cover damage to other cars.

Residual Liability Insurance - Bodily Injury and Property Damage

This protects against lawsuits in certain situations, such as causing an accident resulting in death, serious injury, or permanent disfigurement. It also covers accidents involving non-residents or those occurring in another state.

The minimum coverage for residual liability insurance is:

• Up to $250,000 for one person injured or killed in an accident
• Up to $500,000 for each accident if multiple people are injured or killed
• Up to $10,000 for property damage in another state

Additional Coverage for Family Members

A no-fault policy covers all family members living in the household, even if they are passengers in another vehicle or pedestrians.

To obtain auto insurance, one can contact licensed insurance agents or companies directly. The Michigan Department of Insurance and Financial Services also provides resources and comprehensive information to assist with the process.