A paperwork dispute just turned into a full-blown legal enforcement case. The Michigan Department of State (MDOS) recently halted car sales at a Chevrolet-Buick-GMC store in China Township. Investigators said the dealership continually sold its own used loaner vehicles as brand-new cars.

While the dealership doesn’t see the problem, the department considers the practice a violation of state law

MDOS said it first spotted the issue during a compliance inspection of LaFontaine Chevrolet Buick GMC of St. Clair’s in September 2024.

Inspectors reported that some cars listed as new had previously been used as loaners. What’s more, the vehicles had inaccurate title and registration information filed to the state.

The department fined the dealership $3,000 and placed it on 18 months of probation. It also required staff to complete additional training on Michigan’s vehicle code.

After that, MDOS and the Michigan Auto Dealers Association sent statewide notices reminding dealerships that selling used cars as new would trigger disciplinary action.

But when state staff returned to LaFontaine in September 2025, they said the dealer was still selling loaners as new

According to Fox 2 Detroit, one car sold as “new” already had roughly 6,000 miles.

The state then moved to suspend the dealership’s license, stopping all vehicle sales.

LaFontaine Automotive Group disputes the allegations

The company said the problem stems from clerical mistakes. Mainly, RD-108 forms were a problem, plus a mismatch between Michigan’s titling rules and actual automaker programs.

According to the dealership, under GM’s standards and most lender definitions, inventory assigned to approved loaner or rental programs still qualify as new.

As such, they retain full factory warranties and incentives.

The dealership argued that Michigan’s older laws don’t reflect modern industry standards

This creates confusion that has affected other dealers statewide. It described the situation as an administrative issue, not deception, and said customers still received vehicles eligible for new-car warranties and incentives.

LaFontaine said it is now working directly with MDOS to correct paperwork and ensure compliance.

The group added that it supports updating Michigan’s regulations to align with how other states define and title retired loaners.

The Michigan Department of State has asked any affected customers to contact its Office of Investigative Services automotive complaint line at 844-372-8356.