Michigan Service Shop Bond: Everything You Need to Know

If you operate a motor vehicle repair shop in Michigan, you are required to obtain a Service Shop Bond before receiving your license. This bond serves as a financial guarantee that your business will comply with Michigan’s motor vehicle repair laws, protecting consumers from fraud, unethical business practices, or failure to fulfill contracts.

In my experience, many auto repair shop owners don’t realize they need this bond until they start the licensing process with the Michigan Department of State (MDOS). If you're in the process of opening or renewing your shop's license, this guide will help you understand what a Michigan Service Shop Bond is, why it’s required, how much it costs, and how to obtain one quickly.

What Is a Michigan Service Shop Bond?

A Michigan Service Shop Bond is a surety bond that ensures auto repair shops comply with state laws and regulations under the Motor Vehicle Service and Repair Act (MCL 257.1301-257.1340). The bond protects consumers by ensuring that repair shops:

✔ Perform repairs as promised
✔ Use honest business practices
✔ Comply with contract terms and estimates
✔ Do not engage in fraud or deceptive practices

If a repair shop fails to meet these obligations, the bond provides financial compensation to affected customers.

Who Needs a Michigan Service Shop Bond?

You are required to obtain a Service Shop Bond if:

✅ You own or operate a motor vehicle repair shop in Michigan
✅ You are applying for or renewing a Motor Vehicle Repair Facility License with the Michigan Department of State (MDOS)
✅ You perform repairs on vehicles owned by the public
✅ Your business is categorized as a Class A, B, or C Repair Facility

Types of Service Shops That Need This Bond

🚗 Auto Body Shops – Businesses that repair or replace vehicle exteriors and frames
🔧 Mechanical Repair Shops – Shops that fix engines, transmissions, brakes, and other mechanical components
🛠 Tire & Brake Shops – Businesses specializing in tire sales, balancing, and brake repair
⚡ Auto Electrical Shops – Repair facilities handling electrical and electronic vehicle components
🔩 General Auto Repair Shops – Full-service garages that perform multiple types of repairs

Even mobile mechanics and specialized repair shops may be required to have a bond, depending on the scope of services offered.

Why Is a Michigan Service Shop Bond Required?

The Michigan Department of State (MDOS) enforces bonding requirements to:

✔ Protect consumers from fraud, misrepresentation, or poor-quality repairs
✔ Ensure that repair facilities adhere to contracts and service agreements
✔ Guarantee that service shops comply with Michigan’s repair laws
✔ Provide financial security in case a customer suffers financial losses due to misconduct

If a repair shop violates state regulations, consumers can file a claim against the bond to seek reimbursement for financial damages.

How Much Does a Michigan Service Shop Bond Cost?

While the bond amount required varies by business type and location, most Michigan service shops need a bond amount ranging from $10,000 to $25,000.

However, you don’t pay the full bond amount upfront. Instead, you pay a bond premium, which is a percentage of the total bond amount.

Typical Cost Estimates

📌 For a $10,000 bond:

• With good credit (700+ score): $100 - $300 per year

• With fair credit (650-699 score): $300 - $750 per year

• With poor credit (below 650): $750 - $1,500+ per year

📌 For a $25,000 bond:

• With good credit (700+ score): $250 - $750 per year

• With fair credit (650-699 score): $750 - $1,500 per year

• With poor credit (below 650): $1,500+ per year

In my experience, the best way to save money on bond costs is to work with a surety agency that specializes in auto repair bonds and offers competitive rates.

How to Obtain a Michigan Service Shop Bond

Getting your bond is a simple and fast process:

1️⃣ Determine Your Bond Amount – Check with MDOS or your licensing authority to confirm the required bond amount.
2️⃣ Complete a Bond Application – Provide details about your business, ownership, and financial history.
3️⃣ Receive a Quote – Your bond premium will depend on credit score, business history, and financial stability.
4️⃣ Pay for the Bond – Once approved, pay the bond premium to activate coverage.
5️⃣ Submit the Bond to MDOS – File the bond with the Michigan Department of State (MDOS) as part of your licensing process.

Most service shop bonds can be issued within 24 hours, so you can get licensed and start working quickly.

What Happens If a Claim Is Filed Against Your Bond?

If a customer files a claim against your bond due to:

🚨 Failure to complete repairs as promised
🚨 Charging for unauthorized services
🚨 Using defective or substandard parts
🚨 Misrepresenting repairs or overcharging customers

The surety company will investigate the claim. If the claim is valid, the surety may pay the affected customer up to the bond amount—but you are ultimately responsible for reimbursing the surety company.

To avoid claims, service shop owners should:
✔ Provide accurate estimates and stick to contracts
✔ Communicate clearly with customers about repairs and costs
✔ Follow Michigan’s Motor Vehicle Service and Repair Act regulations

Why Choose Axcess Surety for Your Michigan Service Shop Bond?

At Axcess Surety, we specialize in helping auto repair businesses get the bonds they need—quickly and affordably.

✔ Fast Approvals – Get your bond issued in 24 hours
✔ Competitive Rates – Low-cost bond options, even for credit challenges
✔ Expert Support – We understand Michigan’s bonding requirements and guide you through the process
✔ Easy Online Application – Apply in minutes from anywhere

Get Your Michigan Service Shop Bond Today!

If you need a Michigan Service Shop Bond, we make it fast, easy, and affordable.

🔗 Apply Now or call us today to get started!