Michigan Compiled Laws

Mich. Comp. Laws § 257.238 (2026)

Security interest in vehicle; certificate of title; assignment; termination statement; electronic transactions.

✓ current as of July 2026

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MICHIGAN VEHICLE CODE

Act 300 of 1949

257.238 Security interest in vehicle; certificate of title; assignment; termination statement; electronic transactions.

Sec. 238.

(1) When an owner named in a certificate of title creates a security interest in the vehicle described in the certificate or in any accessory on the vehicle, all of the following apply:

(a) The owner shall immediately execute an application in the form prescribed by the department to name the holder of the security interest on the certificate of title, showing the name and address of the holder and deliver the certificate of title, application and the required fee together with a copy of the application, to the holder of the security interest.

(b) The holder of the security interest shall cause the certificate of title, application and fee and the copy of the application to be mailed or delivered to the department.

(d) Upon receipt of the certificate of title, application and the required fee, the department shall issue a new certificate in the form provided by section 222 setting forth the name and address of each holder of a security interest in the vehicle or in any accessory on the vehicle for which a termination statement has not been filed and the date on which the application first stating the security interest was filed, and mail the certificate to the owner. However, as provided under this section, the secretary of state is not required to issue a title to the owner of a vehicle if the title is subject to a security interest.

(2) A holder of any kind of a security interest may assign, absolutely or otherwise, the holder's security interest in the vehicle or any accessory thereon to a person other than the owner without affecting the interest of the owner or the validity of the security interest, but any person without notice of the assignment is protected in dealing with the holder of the security interest as the holder thereof.

(3) The assignee of a security interest may have the certificate of title indorsed with the assignee named as the holder of the security interest by providing the department with a copy of the assignment instrument, but the failure of the assignee to do so shall not affect the validity of the security interest of that assignment.

(4) If there is no outstanding obligation and no commitment to make advances, incur obligations, or otherwise give value secured or to be secured by a security interest in a vehicle or an accessory on the vehicle, for which the certificate of title is in possession of a secured party, the secured party may, not more than 14 days after satisfaction of the obligation, execute a termination statement in the form prescribed by the department and mail or deliver the termination statement to the owner or another person as the owner may direct.

(5) If there is no outstanding obligation and no commitment to make advances, incur obligations, or otherwise give value secured or to be secured by a security interest in a vehicle or an accessory on the vehicle, for which the certificate of title is in the possession of another person, the secured party shall, within 14 days after demand but not more than 30 days after demand, execute a termination statement in the form prescribed by the department and mail or deliver the termination statement to the owner or another person as the owner may direct.

(6) The department may require that all transactions concerning vehicle title liens and security interests be conducted by electronic means, as determined by the department. After all liens have been terminated, or for purposes of retitling the vehicle in another state or any other purpose deemed appropriate by the department, the department may issue a paper copy of the vehicle title to the vehicle's owner.

(7) A vehicle sale transaction in which a security interest is entered by electronic means shall include a document recording entry of the electronic security interest and information regarding the financial institution that holds the security interest. At the time a security interest is presented with payment in satisfaction of the security interest, a secured receipt in a form approved by the department and produced at the time the security interest is presented with payment in satisfaction of the security interest may be submitted to the department in lieu of the title for purposes of transferring ownership in the vehicle.

History: 1949, Act 300, Eff. Sept. 23, 1949 ;-- Am. 1964, Act 248, Eff. Jan. 1, 1965 ;-- Am. 1968, Act 66, Eff. Aug. 1, 1968 ;-- Am. 2014, Act 291, Eff. Mar. 31, 2015

Notes of Decisions

Cited in 17 cases (1 in the last 5 years), 1951–2023 · leading case: Boyd v. NBD Bank (In Re Thomas), 231 B.R. 8 (Bankr. W.D. Mich. 1999).

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Boyd v. NBD Bank (In Re Thomas), 231 B.R. 8 (Bankr. W.D. Mich. 1999). · cites it 19× “” Mich.Comp.Laws Ann. § 257.238. At the time the Debtors granted the security interest, they were arguably not named in the certificate of title as owners.”

In re Klein, 486 B.R. 853 (Bankr. E.D. Mich. 2012). · cites it 27× “1999)(creditor’s failure to comply with filing requirement of Mich. Comp. Laws Ann. § 257.238 (a)(2) caused its security interest in vehicle to be unper-fected as of the filing date of the debtor’s bankruptcy petition); Frank v.”

Perry v. Golling Chrysler Plymouth Jeep, Inc, 729 N.W.2d 500 (Mich. 2007). · cites it 2× “238, which requires the person named as the owner on the certificate of title to add security interests to the title, requires the owner to first "execute" an application, then "deliver" it to the holder of the security interest, and then requires that the owner "shall cause the…”

Bruinsma v. Citizens Banking Corp. (In Re Fleming), 226 B.R. 3 (Bankr. W.D. Mich. 1998). · cites it 5× “Mich. Comp. Laws Ann. § 257.238 (c)(2) (emphasis added).”

Remes v. Ford Motor Credit Co. (In re Churchwell), 80 B.R. 855 (W.D. Mich. 1987). · cites it 9× “§ 257.238. 2 To create a security interest in the vehicle, the owners executed the RD-108 form to state FMCC’s name and address as the secured party.”

Frank v. Second Nat'l Bank of Saginaw (In Re Gilbert), 82 B.R. 456 (Bankr. E.D. Mich. 1988). · cites it 2× “217(c) (sic); Mich.Comp.Laws § 257.238(a); In re Schipper, 4 U.”

Matter of Churchwell, 80 B.R. 855 (Bankr. W.D. Mich. 1987). · cites it 9× “§ 257.238. [2] To create a security interest in the vehicle, the owners executed the RD-108 form to state FMCC's name and address as the secured party.”

Wells Fargo Equip. Fin. v. Rodriguez, 438 B.R. 913 (W.D. Tex. 2010). “§ 40-3-50(b) (2009); Mich. Comp. Laws § 257.238 (b)(2) (1979); Mo.”

In Re Microband Companies, Inc., 135 B.R. 2 (Bankr. S.D.N.Y. 1991). “Mich.Comp.Laws Ann. § 257.238 (West 1990).”

Hendon v. Gen. Motors Acceptance Corp. (In re B & B Utils., Inc.), 208 B.R. 417 (Bankr. E.D. Tenn. 1997). “The perfection of a security interest in a motor vehicle in Michigan is governed by Mich. Comp. Laws Ann. § 257.238 (a) (West 1996), 5 which provides in material part: When an owner named in a certificate of title creates a security interest in the vehicle described in such…”

Clark Contracting Servs. v. Fin. (Clark Contracting Servs., Inc.), 399 B.R. 789 (Bankr. W.D. Tex. 2008). “§ 40-3-55(b) (2008) (emphasis added); The assignee may have the certificate of title indorsed with the assignee named as the holder of the security interest by providing the department with a copy of the assignment instrument but the failure of the assignee to do so shall not…”

Roe v. Flamegas Indus. Corp., 167 N.W.2d 835 (Mich. Ct. App. 1969). · cites it 2× “MCLA §§ 257.238, 257.239, and 566.302 (Stat Ann 1968 Rev and 1964 Rev §§ 9.”

Show all 17 citing cases →

— Mich. Comp. Laws § 257.238(4) — 1 case

Moyer v. Rosich (In re Rosich), 558 B.R. 199 (Bankr. W.D. Mich. 2016).

— Mich. Comp. Laws § 257.238(8) — 1 case

Beaumont Health v. Progressive Michigan Ins. Co. (Mich. Ct. App. 2023).

— Mich. Comp. Laws § 257.238(9) — 1 case

In re Dixon, 500 B.R. 869 (Bankr. E.D. Mich. 2013).

— Mich. Comp. Laws § 257.238(a) — 4 cases

In re Klein, 486 B.R. 853 (Bankr. E.D. Mich. 2012). “1999)(creditor’s failure to comply with filing requirement of Mich. Comp. Laws Ann. § 257.238 (a)(2) caused its security interest in vehicle to be unper-fected as of the filing date of the debtor’s bankruptcy petition); Frank v.”

Frank v. Second Nat'l Bank of Saginaw (In Re Gilbert), 82 B.R. 456 (Bankr. E.D. Mich. 1988). “217(c) (sic); Mich.Comp.Laws § 257.238(a); In re Schipper, 4 U.”

Remes v. Ford Motor Credit Co. (In re Churchwell), 80 B.R. 855 (W.D. Mich. 1987). “§ 257.238. 2 To create a security interest in the vehicle, the owners executed the RD-108 form to state FMCC’s name and address as the secured party.”

Matter of Churchwell, 80 B.R. 855 (Bankr. W.D. Mich. 1987). “§ 257.238. [2] To create a security interest in the vehicle, the owners executed the RD-108 form to state FMCC's name and address as the secured party.”

— Mich. Comp. Laws § 257.238(a)(1) — 1 case

— Mich. Comp. Laws § 257.238(a)(2) — 1 case

Boyd v. NBD Bank (In Re Thomas), 231 B.R. 8 (Bankr. W.D. Mich. 1999). “” Mich.Comp.Laws Ann. § 257.238. At the time the Debtors granted the security interest, they were arguably not named in the certificate of title as owners.”

— Mich. Comp. Laws § 257.238(c)(2) — 1 case

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