The Curbstoner's Story: What you need to know about Unlicensed Vehicle Dealers

What is a "curbstoner"? A curbstoner, or unlicensed dealer, is a person who buys and sells vehicles without first obtaining a vehicle dealer license.

How does the law define a vehicle dealer?

 

Historically, a dealer in Michigan was someone who was engaged in the business of buying, selling, or brokering vehicles, vehicle parts and scrap vehicles.

 

State law now defines a vehicle dealer as someone who within a 12-month period will:

• Buy and sell, exchange, broker, lease, or deal in five or more vehicles, or
• Buy and sell, exchange, broker, or deal in salvageable parts for five or more vehicles, or
• Buy five or more vehicles to sell parts or process into scrap metal.

 

How are curbstoners identified?

 

The Michigan Vehicle Code requires the Department of State to license and regulate vehicle dealers and to investigate and prosecute dealers who operate without a license. Unlicensed dealers are identified by various means, including branch office referrals, document reviews, licensed dealers, computer tracking systems, law enforcement agencies, local zoning offices, and consumer complaints.

 

Many other agencies work with the Department of State to enforce the dealer licensing provisions of the Michigan Vehicle Code. Both the Michigan Department of Treasury and the Internal Revenue Service are interested in finding unlicensed dealers because they fail to report wages and income, and pay taxes. The Department of State also refers information about unlicensed dealers to local prosecutors, other state agencies, and zoning officials.

 

What options do curbstoners have under the law?

 

The Department of State is authorized to fine unlicensed dealers $5,000 for a first offense and $7,500 for each subsequent offense. However, the department prefers to work with curbstoners to bring them into compliance with the law before imposing fines or referring their case for criminal prosecution. Curbstoners wishing to apply for a dealer license should be aware of the following points:

• Applicants for a Michigan dealer license must show a satisfactory business reputation and character, in addition to meeting other requirements.
• Although curbstoning is against the law, the practice will not automatically disqualify a person from obtaining a dealer license. Curbstoners who take the steps necessary to apply for a dealer license will be considered as an eligible candidate, provided they do not have any other violations, issues or circumstances that would disqualify them from obtaining a dealer license.
• Dealers are required to post a $10,000 surety bond. This bond must be obtained before submitting an application.
• Dealers are required to have an established place of business to display their inventory. Proper zoning for a business must be obtained before applying for a dealer license.
• Dealers are required to keep specific records of all sales transactions. These records must be available for inspection by law enforcement officers and Department of State staff.

 

What are the steps for applying for a dealer license?

 

Contact the Department of State to request a dealer kit: by e-mail, licensing@michigan.gov; telephone, 1-888-SOS-MICH (1-888-767-6424); by fax, 517-335-2810; or by mail, Michigan Department of State, Bureau of Driver and Vehicle Programs, Business Licensing Section, Lansing, MI, 48918.

 

Complete the application. Telephone the Business Licensing Section at 1-888-SOS-MICH (1-888-767-6424) if you have any questions.

 

Submit the application to the Michigan Department of State, Bureau of Driver and Vehicle Programs, Business Licensing Section, Lansing, MI, 48918. You will be notified once your application has been processed and a dealer license issued.

 

What should you do if you know of someone who is acting as an unlicensed dealer?

 

If you know of someone who is acting as an unlicensed dealer, you may anonymously report him or her to the Department of State. Please use the form "Reporting an Unlicensed Dealer."

 

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RELATED DOCUMENTS

 

>  Reporting an Unlicensed Dealer (PDF File)