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Five Simple Rules To Keep in Mind When Buying a Car in Michigan

Five Simple Rules that Michigan Car Dealers Must Follow

          Used car dealers in Michigan have to abide by both the Motor Vehicle Code and the rules enacted by the Michigan Secretary of State when selling cars to the public.  Some of the most common violations of these rules allow dealers to hide evidence of fraud or wrongdoing. Violations of these rules should raise red flags to any buyer. If you have bought a vehicle or plan to buy one from a Michigan car dealer, keep these five simple rules in mind:

  • A dealer must provide a copy of every document you sign at the time you sign it. MCL § 257.251a.

As a matter of course, anytime you sign a document with any business, you should request a copy for your own records.  This helps ensure the buyer has an accurate record of all the details of the sale which can help if the buyer needs to bring a legal claim at a later point in time.

  • A dealer must have valid certificate of title in its immediate possession, MCL § 247.235(1), and must show you all titles and re-assignments of titles in its possession, MCL § 257.233a(3).

Sounds so simple right? Trust me, this rule gets broken all the time. The reason for this rule:

  • To ensure accurate odometer information;
  • To help consumers understand the vehicle’s history (e.g., help avoid unknowingly purchasing a salvage vehicle, prior rental vehicle, etc.);
  • To ensure that the dealer actually has the right to sell or lease the vehicle.

          Accurate odometer information is vital to any buyer. The front of the title will contain an odometer statement. The back of the title will also contain recent re-assignments and give you a clue as to the names of the people or companies that owned the vehicle. If you see an insurance company in that chain of title, you need to proceed with caution.

A car titled in an insurance companies name is typically a salvage vehicle. Watch out for cars that five model years old. Be careful because in Michigan a used car dealer can sell you a motor vehicle that is more than five model years old and not be branded as a salvage title vehicle. So for example, you are on a lot looking at used cars when you see a vehicle that is a 2010 for a great price with fairly low mileage. You will want to use research.com or some other vehicle history service. You will not always be able to find much on the back of titles because sometimes the car has been sold back and forth many times between auto dealers.

  • A dealer is only allowed to provide you with 1 temporary tag. MCL § 257.226a(1).

If a used car dealer gives you a second temporary tag then this should raise a red flag. This typically means the dealer has not applied for title and is trying to skirt the rules. This could be for a variety of reasons but it is illegal to issue a second temporary tag.

  • A dealer may not allow the use of a dealer plate for more than 72 hours. MCL § 257.244(8).

This forces the dealer to apply for title in a timely manner.

  • A dealer must submit your application for title within 15 days of the sale or lease. MCL § 257.217(4).

This is constantly violated especially when the car is being financed. This is because the dealer has attempted to assign the contract to a finance company. When finance companies reject the offer, the dealer will stall in applying for title because they need to list the finance company as a secured party on the title with the application for title. Many times, the finance company hasn’t rejected the offer, they simply have offered the dealer less money than the dealer wants to accept.

A dealer in Michigan must finance a car dealer if they have allowed the consumer to drive off the lot with vehicle. Do not allow a dealer to lie to you, financing cannot fall through because the dealer must finance the dealer by law. They cannot repossess the vehicle because financing falls through, make your payments to the dealer and make them on time. Keep all of your paperwork at home, take them out of your car.

Keeping these rules in mind when dealing with use car dealers so that you can help protect yourself from the consequences of  a bad deal.