Michigan Auto Dealer Faces Probation and Suspension for Illegal Sales

A Michigan car dealership has had its license suspended by the Michigan Department of State (MDOS) after regulators found multiple violations, including promoting used cars as new vehicles.

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This happened on the eastside of the state in St. Clair County.

Here is how it happened according to MDOS:

The dealership was registering new vehicles in their business name to serve as loaner vehicles for their customers. After these vehicles were pulled from the loaner program, the dealership was reselling them as ‘new’ to consumers.

After this was discovered MDOS along with the Michigan Auto Dealers Association (MADA) informed all dealerships that they needed to stop this practice.

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Along with the warning and a fine of $3,000, the dealership was placed under an 18-month probation period.

You would think that getting caught doing this and warned would put a stop to what was happening but it sounds like that is not the case.

Because on September 24th MDOS followed up and did another inspection and once again they found the dealership was breaking the law by selling more than two dozen used vehicles as “new.”

The company will now remain suspended by MDOS until they and the dealership can come to some sort of an agreement.

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LaFontaine Automotive Group reached out and provided us with the following statement:

LaFontaine Automotive Group confirms that the State of Michigan has issued a temporary suspension of the dealer license for LaFontaine Chevrolet Buick GMC St. Clair. This matter arises from a clerical error in the completion of RD-108 documentation — a paperwork issue that has created confusion between automaker program requirements, dealer processes, and the State of Michigan’s regulatory statutes.

LaFontaine Automotive Group has always operated in full compliance with automaker programs and remains dedicated to maintaining complete alignment with state regulations. Unfortunately, a long-standing disconnect between automaker program definitions and state titling requirements has created widespread confusion among dealers across Michigan.

Under current manufacturer and lender definitions, vehicles utilized in manufacturer-approved rental or service loaner programs fully qualify as new vehicles. In nearly every other state, modernized statutes reflect this reality and allow these vehicles to be titled and sold as new. However, Michigan’s outdated titling laws still require such vehicles to be classified as used, even though they meet all qualifications for new vehicle incentives and warranties.

As a result, these vehicles are sold to customers as titled used cars — despite being eligible for new-vehicle benefits — a regulatory inconsistency unique to Michigan. Contrary to recent misleading statements from the Michigan Department of State, no fraudulent activity has occurred. Consumers have continued to benefit from lower-priced vehicles that remain eligible for new-vehicle incentives and warranties under GM’s approved programs.

LaFontaine Automotive Group respectfully urges the State of Michigan to collaborate with automakers and dealers to modernize and align state regulations with current industry standards. Such alignment would ensure consistent compliance expectations, transparency, and consumer protection across the automotive marketplace.

Upon notification of the temporary suspension, LaFontaine immediately began working closely with state officials to review internal processes, correct documentation, and ensure full compliance moving forward.

As a family-owned organization, LaFontaine Automotive Group takes great pride in its long-standing reputation for honesty, integrity, and guest satisfaction. We remain deeply committed to maintaining the trust of our valued guests and the communities we serve while working diligently with the State of Michigan toward a swift and fair resolution.

There are a lot of things you might be doing in Michigan that could have you wondering if they are legal or not.

Check out the most common Michigan law questions.