ST. CLAIR COUNTY, Mich. (FOX 2) - A Michigan car dealership suspended earlier this week after the state accused the business of selling used vehicles as new says the issue was a result of an administrative error.
LaFontaine Chevrolet Buick GMC of St. Clair in China Township said Thursday that the Michigan Department of State (MDOS) lifted the suspension within a day of taking action against the dealership.
The MDOS said that the dealership and department reached an agreement. This agreement included a $25,000 penalty, probation extension until December 2026, and training requirements.
The backstory:
MDOS accused the dealership of selling vehicles that were used as customer loaners as new.
Department staff discovered the new vehicle scheme during a general compliance inspection in September 2024, and violations were issued.
In separate October 2024 emails, MDOS and the Michigan Auto Dealers Association directed all new vehicle dealerships to immediately stop selling used vehicles as new or risk administrative action by the department and a suspension of the dealer's license. The department then provided the dealership with educational materials, and established an Alternative Penalty Agreement for the dealership. That agreement included a $3,000 financial penalty and an 18-month probation period.
Additionally, several representatives of the dealership attended an MDOS training session that included education on violations of the Michigan Vehicle Code.
When MDOS conducted a follow-up inspection this September, it was discovered that the dealership had allegedly continued to sell used vehicles as new, even after the department took action against LaFontaine. One of these vehicles passed off as new had around 6,000 miles on it, according to MDOS.
After the state shared a press release with these accusations, the dealership released a statement saying that there was a paperwork issue that has created confusion between automaker program requirements, dealer processes, and state regulatory laws.
The dealership said that manufacturer and lender definitions allow manufacturer-approved rental or service loaner vehicles to qualify as new, something Michigan law does not recognize. Such a practice allows customers to take advantage of new vehicle incentives when purchasing a vehicle previously used as a loaner.
"Michigan’s outdated titling laws still require such vehicles to be classified as used, even though they meet all qualifications for new vehicle incentives and warranties," the dealership said in its original response to the accusations. "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."
What they're saying:
The dealership released another statement Thursday after reopening:
"Within a day of receiving the suspension notice, the State of Michigan fully lifted the suspension, and as of the following day, LaFontaine Chevrolet Buick GMC St. Clair was 100% back in business across both sales and service operations.
"This issue was purely administrative in nature — stemming from confusion between automaker program requirements, dealer processes, and the State’s outdated regulatory statutes. Frankly, the speed at which this matter was resolved reinforces our belief that the initial action was more of a headline-driven move by the State than a substantive compliance concern.
"Importantly, there was no imminent threat to public safety, no systemic "scheme," and absolutely no guest impact whatsoever. Our commitment to integrity, transparency, and the trust of our guests remains unwavering, and we continue to operate in full partnership with both our automaker and lender partners."
The Source: Previous reporting and a statement from LaFontaine Chevrolet Buick GMC of St. Clair were used in this report.
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