A car dealership has had its license suspended by the Michigan Department of State over a legal disagreement on what technically constitutes a new vehicle.
LaFontaine Chevrolet Buick GMC of St. Clair, Inc. has allegedly violated probationary measures imposed by the state by way of selling automobiles previously used as loaner cars. While that’s not illegal, registering them as new models violates the Michigan Vehicle Code. However, the dealership is arguing that this shouldn’t be the case — and likely wouldn’t be if the business was based in another state.
While you’ll never convince me that a car with more than a dozen miles on the odometer could ever be a brand-new automobile, this is standard practice for plenty of dealers. That’s why you’ll sometimes see discontinued models granting a handful of sales years later. They’re often vehicles that were used as a loaner by the dealership. But, since they were never officially sold to a customer and registered, they can technically qualify as new.
The business is making the argument that rental or service loaner programs should be considered as such, noting that statutes in other states “reflect this reality.” It’s making the claim that Michigan’s titling laws are outdated, even though they should technically meet all qualifications for the relevant incentives and warranties provided to new vehicles.
“LaFontaine Automotive Group has always operated in full compliance with automaker programs and remains dedicated to maintaining complete alignment with state regulations,” LaFontaine Automotive Group was quoted as stating by MLive. “Unfortunately, a long-standing disconnect between automaker program definitions and state titling requirements has created widespread confusion among dealers across Michigan.”
While the Michigan Department of State (MDOS) announced its decision on Tuesday, LaFontaine has been under the microscope for quite some time. According to the MDOS, the state originally believed it had discovered an illegal sales scheme during a general compliance inspection conducted in September of 2024.
From MLive:
With the dealership’s license now suspended, it’s prohibited from selling automobiles.
“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,” wrote the dealership. “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.”
On the one hand, selling a car with over 6,000 miles on the clock as “new” seems insane. But we don’t have the details of that transaction. If it was simply a clerical error and the vehicle sold to a customer paying a fraction of the original MSRP, then this less of a scandal than it first appears. LaFontaine is also correct in noting that plenty of other states wouldn’t have taken issue with the aforementioned transactions.
We don’t know exactly how the deals took place. Was the dealership selling these cars to people who had no idea what an odometer was or is this legal conflict a bit more nuanced than it first appears?
The dealer group has mixed reviews online. Individuals have also taken to forums (e.g. Reddit) to badmouth several of LaFontaine’s showrooms. However, that’s hardly abnormal and I don’t know many people that have had a stellar experience at any non-premium dealership. My personal experience has similarly resulted in catching most automotive sales representatives being dishonest — either intentionally or because they simply didn’t want to appear ill-informed on the product in question. But that doesn’t mean they’re intentionally breaking the law.
Interestingly, the reviews for the GM-focused showroom that’s taking all the heat in St. Clair actually has some of the best user reviews you’re likely to come across. While that could be a matter of paying for positive feedback, something loads of businesses do on a regular basis, one wonders why the St. Clair site did so much better than LaFontaine’s other Michigan storefronts.
The company has said it’s going to urge the state to modernize the laws while seeking support from OEMs and other dealerships. That $3,000 fine isn’t likely to ruin the showroom but being placed under an extended probation while being disallowed to conduct business is a more-serious issue.
[Images: Gretchen Gunda Enger/Shutterstock; RYO Alexandre/Shutterstock]
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Consumer advocate tracking industry trends and regulations. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied, he pivoted to writing about cars. Since then, he has become an ardent supporter of the right-to-repair movement, been interviewed about the automotive sector by national broadcasts, participated in a few amateur rallying events, and driven more rental cars than anyone ever should. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and learned to drive by twelve. A contrarian, Matt claims to prefer understeer and motorcycles.
More by Matt Posky
Again, guys with all the money, tools, connections, etc.. want to break the law and get away with it.
a car used as a loaner with a number of different drivers and several thousand miles on it is not New. It should not be sold as new and should be discounted appropriately.
