A provision in HB5356 cuts title fees for used-vehicle acquisitions—but only under specific conditions and only starting mid-2027.
Most Michigan retail auto dealers don't yet know that a fee exemption buried in HB5356 will affect how much they pay to acquire used vehicles from consumers. Starting July 1, 2027, dealers who buy consumer-owned vehicles that already carry a Michigan electronic title will pay significantly less to transfer that title into dealer inventory.
Under current Michigan law, when a dealer acquires a used vehicle from a consumer and transfers the title, the dealer pays standard certificate-of-title fees. These include a $10 base fee, a $3 service fee, a $0.50 theft-prevention assessment, and a $1.50 tire surcharge—totaling approximately $15 per vehicle.
Beginning July 1, 2027, that cost drops to $5 per vehicle—but only when the vehicle being acquired already has an electronic title on file with Michigan and the dealer uses the electronic transfer process. The $5 fee covers a dealer-to-dealer electronic transfer and replaces the standard fee structure entirely.
For dealers acquiring dozens or hundreds of used vehicles annually, this represents a meaningful reduction in per-unit acquisition costs. A dealer purchasing 200 used vehicles per year with electronic titles could save roughly $2,000 annually under the new fee structure.
This provision applies specifically to dealers acquiring consumer-owned vehicles that already carry Michigan electronic titles. It does not apply to:
As electronic titling becomes more common in Michigan, a larger share of used-vehicle acquisitions will qualify for this lower fee. Dealers should expect the savings to grow over time as the installed base of electronic titles increases.
This exemption is codified in Section 806(4) of HB5356, which amends the Michigan Vehicle Code (MCL 257.14 et seq.). The bill became effective on its enactment, but the fee exemption itself does not take effect until July 1, 2027. This gives the state time to implement the electronic transfer system and dealers time to adjust their acquisition workflows.
The provision is part of a broader modernization of Michigan's title-transfer system. HB5356 amends 16 sections of the 1949 Michigan Vehicle Code and adds new language governing electronic title processes.
Dealers don't need to take action immediately, but it's worth understanding how this fee structure will affect acquisition economics starting mid-2027. If your dealership acquires a significant volume of used vehicles, tracking how many carry electronic titles now will help you forecast savings. You may also want to confirm your title-transfer processes are set up to use the electronic method when the fee reduction takes effect.
For the full text of HB5356 and additional guidance on Michigan vehicle title requirements, consult the Michigan Vehicle Code or contact your state dealer association.