The Michigan Department of State has suspended the license of a used-vehicle dealership after it was discovered closed and regulatory agents were unable to inspect dealership records.

Department of state staff attempted to conduct an inspection at Coyotes Sales, 161 E. Ludington Drive, Farwell, on April 10. The dealership, owned by Don Keilholtz, was locked and had no visible exterior signage or hours posted. With no one present to provide the records, as required by law, a violation was written for noncompliance. The suspension was served June 18.

Jaguar Land Rover North America LLC (Land Rover) is recalling 16,186 2016-2017 Range Rover and Range Rover Sport vehicles.

The driver's seat belt emergency locking retractor (ELR) may not lock as designed. As such, these vehicles fail to comply with the requirements of the Federal Motor Vehicle Safety Standard (FMVSS) number 209, "Seat Belt Assemblies."

Land Rover will notify owners, and dealers will replace the driver's seat belt assembly, free of charge. Interim notices informing owners of the safety risk will be mailed July 1. Owners will receive a second notice when the remedy becomes available.

Land Rover's number for this recall is N333.

The Michigan Department of State has issued a temporary cease and desist order against a Detroit repair shop for operating without a facility registration in violation of the law.

All American Truck & Trailer Repair, 2663 Michigan Ave., owned by Mugurel Lungu, was served with the order June 4.

After receiving a complaint regarding repairs performed on a dump truck, a Department of State regulation agent conducted an inspection of the repair facility March 6. In April, the department began investigating a second consumer complaint regarding unauthorized repairs.

Ford Motor Co. is recalling 107,857 2013 F-150 vehicles equipped with 5.0L or 6.2L gasoline engines, that previously had the powertrain control module (PCM) software reprogrammed under recall 19V-075.

The software used to reprogram the PCM did not have the necessary updates to prevent the transmission from unexpectedly downshifting into first gear, regardless of vehicle speed.

Ford will notify owners, and dealers will reprogram the powertrain control module, free of charge. The recall is expected to begin June 24.

Ford's number for this recall is 19S19.


Most car dealers I encounter try in good faith to follow the requirements of the many federal and state laws that regulate the business of selling, financing, and leasing vehicles to consumers. They make an affirmative effort to identify those requirements, and they try to follow the rules.

Some of the dealers I meet have some vague notion that theirs is a heavily regulated industry, but they don't know the details of the compliance mandates that apply to them and don't make a serious stab at trying to follow the laws and regulations. They aren't intentionally fudging the rules - they just don't know what those rules are and don't care about incurring the increased overhead that is part of the cost of running a dealership legally. Pure of heart, perhaps, but empty of head.

And then there are the crooks. Some dealers know full well that their activities don't meet legal standards, but they have made the cynical determination that they are unlikely to get caught and, if caught, are unlikely to have to pay a penalty significant enough to hurt them. At day's end, their attitudes, and their actions, are no different from those of common street muggers.

You probably compete against dealers like these on a daily basis. They bait and switch, pack payments, engage in illegal spot delivery transactions, advertise deals that they know they cannot deliver, sell cars that aren't in good shape while maintaining to the contrary, advertise cars at one price on the Internet for "creditworthy buyers" while charging credit-challenged buyers more to cover the discounts they must pay when they sell those buyers' retail installment contracts to discounting finance companies, tell buyers that the purchase of service contracts is required as a condition of financing, and otherwise lie, cheat, and steal.

In addition to these fraud-on-the-customer sorts of violations, some dealers will go further, defrauding the banks, credit unions, and finance companies that provide financing to their car buyers by, for instance, faking customers' credit credentials, engaging in "power booking," or knowingly engaging in straw transactions that violate their dealer agreements with their financing sources.

By competing unfairly, these dealers take food off the tables of the dealers who try to comply with the law. And when you think about it, so do the dealers with the pure hearts but empty heads. If you are one of those honest, or trying-to-be-honest dealers, how can you compete against dealers who don't know the rules or who know them but don't follow them?

The idea of complaining to a state or federal regulator about another dealer's illegal activities doesn't sit well with some dealers, and accusations of another dealer's misconduct can carry some risks of their own. Still, if the dealership down the street is advertising that brand-new Belchfire V-8 at $2,500 less than you do because it is aggregating every possible discount available on the car, knowing full well that no, or almost no, buyers will qualify for all the discounts and you are missing Belchfire sales as a consequence, then that dealership is stealing from you, and you would be perfectly justified in calling the law.

Still squeamish? Here are a few somewhat less drastic solutions.

When faced with players who ignore the rules, some dealers raise a fuss with their state dealership associations. The effectiveness of this approach will vary with the effectiveness of the association. If it's a golfing club in disguise, you'd be wasting your time, but if the association makes serious attempts to keep dealers operating legally, you might get some results.

Another less drastic approach to dealing with corner-cutting dealers is to meet with your state and federal regulators to describe how the corners are being cut and to ask for some enforcement. You don't have to name names and point fingers at specific dealers, but you will need to describe the activity you believe to be illegal and ask that the activity be investigated. This approach also can involve your state association.

Finally, your dealership can engage in efforts to educate the public about common dealer scams and ways to avoid them. Several programs, including one by the American Financial Services Association, teach financial literacy, and there are resources available for businesses that want to support these efforts. Again, this is an effort that won't make much immediate difference but is a long-term and systematic response. It is also a program that your state association could help with, if so inclined. An educated consumer can be a compliant dealer's best defense against cheating dealers.


Thomas B. Hudson was a founding partner of Hudson Cook, LLP, and is now of counsel in the firm's Maryland office.

© 2019, all rights reserved. Based on an article from Spot Delivery. Single print publication rights only to Used Car News.


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