Michigan regulators on Tuesday shut down a LaFontaine Automotive Group dealership for allegedly selling used vehicles as new, the second suspension the powerhouse dealer group has faced for the same issue.
LaFontaine Chevrolet Buick GMC of St. Clair sold loaner vehicles with as many as 6,000 miles of use as new vehicles, the Michigan Department of State said in a statement. Michigan law requires loaner vehicles that have been registered by dealerships to be sold as used.
LaFontaine spokesperson Max Muncey in a statement described the violation as a “clerical error” and said the business “immediately began working closely with state officials to review internal processes, correct documentation, and ensure full compliance moving forward.”
The dealership’s license will remain suspended until it reaches an agreement with state regulators, Michigan Department of State spokesperson Cheri Hardmon said in an email.
Regulators identified LaFontaine’s latest alleged violations while checking its compliance under a 2024 agreement with the state for the same issue at its Livonia dealership.
LaFontaine Hyundai of Livonia shut down for one day in December 2024 after the state suspended its license for allegedly misrepresenting vehicles as new. The dealership agreed to pay a $25,000 financial penalty and complete a 24-month probation period in lieu of an administrative hearing.
LaFontaine Hyundai of Livonia was required to participate in dealer training for managers and employees and was subject to periodic unannounced inspections by MDOS regulatory staff as part of the 2024 agreement.
Regulators and the Michigan Automobile Dealers Association had previously issued bulletins reminding dealers what counts as a “used” vehicle under the Michigan Vehicle Code.
Muncey said Michigan’s vehicle titling laws are inconsistent with automakers’ guidelines, which he said allow dealer loaner vehicles to be sold as new.
“Michigan’s outdated titling laws still require such vehicles to be classified as used, even though they meet all qualifications for new vehicle incentives and warranties,” Muncey wrote. “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.”
Michigan dealerships handle loaner vehicle sales differently. Suburban Mazda of Troy explains its policy under state law on its website:
“The vehicle may be eligible for New Vehicle incentives offered when sold as a retail sale or lease,” according to Suburban Mazda’s website. “Michigan regulations stipulate that it must be sold as USED. All documentation of the transaction must reflect that it is a used vehicle. It cannot be sold as a new vehicle or demo once it has been titled to the dealership. The warranty start date is when the vehicle is placed into loaner service.”

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