Michigan shuts down LaFontaine GM dealership, alleges it sold used cars as new

By Summer time Ballentine, MediaNews Group

Michigan regulators on Tuesday shut down a LaFontaine Automotive Group dealership for allegedly promoting used autos as new, the second suspension the foremost supplier group has confronted over the identical downside.

LaFontaine Chevrolet Buick GMC of St. Clair bought loaner vehicles with as a lot as 9,000 miles of use as new vehicles, the Michigan Division of State stated in an announcement. Michigan legislation requires that loaner vehicles titled and registered by sellers be bought as used.

LaFontaine spokesman Max Muncey described the violation in an announcement as an “administrative error” and stated the corporate “instantly started working intently with state officers to assessment inner processes, right documentation and guarantee full compliance transferring ahead.”

The dealership’s license will stay suspended till an settlement is reached with state regulators, Michigan Division of State spokesperson Cheri Hardmon stated in an e mail.

Regulators recognized LaFontaine’s newest alleged violations whereas monitoring compliance beneath a 2024 settlement with the state over the identical matter at its Livonia dealership.

LaFontaine Hyundai of Livonia was closed for at some point in December 2024 after the state suspended its license for allegedly misrepresenting autos as new. The supplier agreed to pay a $25,000 monetary penalty and full a 24-month probationary interval in lieu of an administrative listening to.

LaFontaine Hyundai of Livonia was required to take part in supplier coaching for managers and staff and was topic to periodic unannounced inspections by MDOS regulatory personnel as a part of the 2024 settlement.

Regulators and the Michigan Car Sellers Affiliation had beforehand issued bulletins reminding sellers what counts as a “used” car beneath the Michigan Car Code.

Muncey stated Michigan’s car title legal guidelines are inconsistent with automaker pointers, which he stated enable loaner vehicles from sellers to be bought as new.

“Michigan’s outdated possession legal guidelines nonetheless require such autos to be labeled as used even when they meet all {qualifications} for brand new car incentives and warranties,” Muncey wrote. “In consequence, these autos are being bought to prospects as used vehicles – regardless of being eligible for brand new car advantages – a regulatory inconsistency distinctive to Michigan.

“Opposite to latest deceptive statements from the Michigan Division of State, no fraudulent exercise has occurred. Shoppers have continued to reap the benefits of lower-priced autos that stay eligible for brand new car incentives and warranties beneath GM’s accredited applications.”

Sellers in Michigan deal with mortgage automotive gross sales in a different way. Mazda of Suburban Troy explains its insurance policies beneath state legislation on its web site:

“The car could also be eligible for brand new car incentives supplied when bought as retail or lease,” based on Suburban Mazda’s web site. “Michigan rules state that it have to be bought as USED. All documentation of the transaction should mirror that it’s a used car. It can’t be bought as a brand new car or as a demo as soon as it’s owned by the supplier. The guarantee begin date is when the car is positioned on mortgage.”

Seller lobbyists have been calling for a change in Michigan legislation for a number of years, stated James Fackler, govt vice chairman of the Michigan Car Sellers Affiliation. He stated automakers encourage sellers to make loaner vehicles obtainable whereas a automotive is being serviced, and later incentivize sellers to promote the vehicles as new by providing new automotive offers on loaner vehicles with a sure mileage.

The affiliation’s objective is to permit loaner vehicles titled and registered by sellers to be bought as new in the event that they fall beneath a sure mileage restrict, Fackler stated.