Unlike many states, Michigan does not have used car laws that specifically outline the requirements car dealers must follow for the sale of their vehicles. A "lemon" refers to a new or used vehicle that buyers must return to the repair shop multiple times, often to fix the same problem that compromises the vehicle's use, safety, or value. Michigan lemon laws address new cars. Consumers who find themselves with a used-car "lemon" must avail themselves of the other laws designed to protect their rights.
Consumer Protection Law
The Michigan Consumer Protection Act (MCPA) protects purchasers of household or personal goods. The act prohibits businesses such as dealerships from using "misleading or deceptive practices" when selling goods and services. Dealers have an obligation to answer buyers' questions about vehicles honestly. For example, the dealer that tells a consumer that the vehicle offers good quality and reliable transportation, and omits telling the purchaser that the previous owner returned the vehicle because of numerous issues with repairs and malfunctions. This omission may constitute dishonesty on the part of the dealership and may lead to a justifiable lawsuit.
Used Car Rule
The Federal Trade Commission requires all used car dealers who sell six or more used vehicles within a year to abide by the Used Car Rule. If buyers can see the vehicle, the dealer must post a buyer's guide in view of the customer, even if the dealer does not intend to sell the vehicle in its present state. Two types of buyer's guide exist: "As Is" or "Implied Warranty." If an expressed warranty comes with the purchase it must also show what percentage of the cost the dealership will pay.
The law requires the name, address, phone number and contact person for complaints on the back of the form. Transactions conducted in Spanish must have the document translated in Spanish and posted appropriately. Information must include the vehicle identification number, make and model year.
Magnuson-Moss Warranty Act
This federal regulation applies to the purchase of products that cost more than $25 and has an expressed written warranty. If the dealer fails to repair the vehicle after two to three attempts, the regulation requires the entity to give the buyer a replacement or refund the full price. The purchaser may also recover attorney fees. This law does not put a mileage restriction on the vehicle it covers.
The most important thing a consumer can do involves documenting anything related to vehicle repairs. Maintain written records of repair invoices and make sure they accurately describe the issue. Write down the details of phone calls and visits to the repairs shop and get the name of the person you speak to about the problem. Keep receipts and record any time loss or other expenses related to the repair of your vehicle.
Contrary to popular belief, the "three-day cooling off period" that gives consumers the option of rescinding a contract does not apply to the purchase of vehicles. Some dealerships promise "money back guarantees" or a "no questions asked" return policy that gives consumers some measure of protection, but you need to check around to identify these offers. Make sure you get the policy in writing.
The Federal Trade Commission states used car buyers can protect themselves against unscrupulous sellers by conducting due diligence on the dealership before finalizing their purchase. Check with the Michigan's Bureau of Regulatory Services and the Better Business Bureau to find out if the entity has outstanding complaints. You may also file a complaint at both places.