Does the Michigan Consumer Protection Act Cover Car Dealers? What Buyers Need to Know

By Joshua Feygin, Esq. · Dealer Fraud · Updated September 2026

For most of the last three decades, the honest answer was no. The Michigan Consumer Protection Act reads like a buyer's statute, with a list of deceptive practices in MCL 445.903 and a private claim for damages and attorney's fees in MCL 445.911, but an exemption in MCL 445.904(1)(a), as the Michigan Supreme Court read it in 1999 and 2007, took licensed car dealers out of it almost entirely. On July 31, 2026, the Court overruled those decisions. This post explains what the Act says, why dealers were exempt, what changed, and which claims a Michigan auto fraud attorney pleads alongside it.

What Does MCL 445.903 Prohibit?

MCL 445.903(1) declares unfair, unconscionable, or deceptive methods, acts, or practices in trade or commerce unlawful, then lists them. The list is specific, and several items describe a bad car deal exactly:

• (1)(c) Representing that goods have characteristics, uses, or benefits they do not have. A car sold as accident-free with a repaired frame.
• (1)(d) Representing that goods are new when they are used, reconditioned, or secondhand. A former demonstrator or rental sold as new.
• (1)(e) Representing that goods are of a particular standard or quality when they are of another. A rebuilt salvage car represented as clean.
• (1)(s) Failing to reveal a material fact the omission of which tends to mislead, and which the consumer could not reasonably have known.
• (1)(y) Gross discrepancies between the seller's oral representations and the written agreement. A quoted payment that is not the contract payment.
• (1)(bb) Making a representation of fact material to the transaction such that a person reasonably believes the state of affairs to be other than it is.
• (1)(cc) Failing to reveal facts material to the transaction in light of representations made in a positive manner.

None of these requires proof that the dealer intended to deceive, and (1)(s) and (1)(cc) reach omissions as well as statements.

Why Were Car Dealers Exempt?

MCL 445.904(1)(a) says the Act does not apply to a transaction or conduct specifically authorized under laws administered by a regulatory board or officer acting under statutory authority of Michigan or the United States. Read literally, that exempts conduct a regulator has affirmatively permitted. In Smith v. Globe Life Insurance Co. (1999), the Michigan Supreme Court read it more broadly: the question was whether the general transaction was authorized by law, not whether the specific misconduct was. In Liss v. Lewiston-Richards, Inc. (2007), the Court applied that reading to licensed residential builders.

Vehicle dealers are licensed and regulated by the Secretary of State under the Michigan Vehicle Code, MCL 257.248 and following. Under Smith and Liss, that was enough. Michigan state and federal courts dismissed Consumer Protection Act claims against dealers and manufacturers because selling motor vehicles is a transaction authorized by law, regardless of the fraud alleged.

What Did the 2026 Eli Lilly Decision Change?

On July 31, 2026, in Attorney General v. Eli Lilly and Company, No. 165961, a four-to-three majority of the Michigan Supreme Court held that Smith and Liss were wrongly decided because they broadened the exemption beyond the statute's plain language, and overruled them. The inquiry under section 445.904(1)(a) is now whether the specific transaction or conduct at issue, rather than the general transaction, is authorized by law. A dealer's license authorizes it to sell cars. Nothing in the Vehicle Code authorizes it to misstate mileage, hide a salvage brand, or contradict the contract on the lot. The opinion is published on the Court's site and mirrored on Justia.

What Does MCL 445.911 Let You Recover?

MCL 445.911(2) lets a person who suffers loss as a result of a violation recover actual damages or $250, whichever is greater, together with reasonable attorney's fees. Subsection (1) authorizes a declaratory judgment and an injunction, whether or not damages are sought. Subsection (4) allows a class action for actual damages on behalf of persons residing or injured in Michigan, and subsections (5) and (6) let the court order reimbursement, strike unconscionable clauses, and appoint a receiver in a class case. Subsection (8) limits recovery to actual damages when the defendant proves a bona fide error despite reasonable procedures. Subsection (9) sets the deadline: six years after the practice, or one year after the last payment, whichever is later.

The $250 floor is modest. The fee-shifting is what matters to you: a claim over a $700 add-on or a misdescribed trim level becomes practical to bring when the statute lets the dealer, not the buyer, pay the lawyer.

What Claims Never Depended on the Act?

• Common-law fraud and silent fraud. A knowing or reckless false statement of material fact you relied on to your loss, or a misleading incomplete answer to a direct question where the dealer had a duty to speak, as the Court of Appeals explained in M&D, Inc. v. McConkey, 231 Mich App 22 (1998). Damages are generally the loss the lie caused, and rescission may be available in the right case.
• The Michigan odometer statute. MCL 257.233a(15): three times actual damages or $1,500, plus costs and fees, for an intentional violation of the odometer disclosure or tampering rules. See odometer fraud in Michigan.
• The Federal Odometer Act. 49 U.S.C. § 32710: three times actual damages or $10,000, plus fees, for a violation with intent to defraud. Our Federal Odometer Act page covers the federal claim in depth.
• Vehicle Code dealer duties. The salvage and rebuilt salvage title brands in MCL 257.217c and the written distressed-vehicle certification a dealer must give under Rule R 257.253; the advertising limits in MCL 257.248a; the written sale memorandum in MCL 257.251. A violation is grounds for license discipline under MCL 257.249 and can be evidence of fraud in the civil case.
• The dealer bond. MCL 257.248(2) requires a $25,000 surety bond that indemnifies a purchaser for loss caused through fraud, cheating, or misrepresentation, payable after a judgment or a final Department of State order.
• Warranty and UCC claims. The Magnuson-Moss Warranty Act and revocation of acceptance under MCL 440.2608.

How Does a Michigan Dealer Case Proceed?

1. Documents firstThe purchase agreement, retail installment contract, Buyers Guide, odometer statement, title, the ad, and every message with the dealer are what the claim is built from. They are reviewed through the free case evaluation. If an attorney can assist, you'll receive an intake questionnaire and retainer agreement.
2. Demand and preservationMichigan has no statutory pre-suit demand for dealer claims. We send one anyway, with a preservation notice for the deal jacket and the auction condition report.
3. Agency complaintsThe Attorney General's Consumer Protection team mediates complaints, and the Department of State's Regulatory Monitoring Division investigates dealers under the Vehicle Code.
4. SuitIn the Michigan district court for claims of $25,000 or less under MCL 600.8301, the circuit court above that, or federal court when an Odometer Act claim supports it. We seek fees from the dealer under MCL 445.911(2), MCL 257.233a(15), or 49 U.S.C. § 32710.

The figures on this page are statutory amounts set by law, not results in any case.

This page is attorney advertising and general information, not legal advice. Reading it does not create an attorney-client relationship. Results depend on the facts and law of each matter; prospective clients may not obtain similar results. Statutory damages described are as set by law and are before deductions for attorney's fees and costs. Sue Your Dealer – A Law Firm, Hollywood, Florida · By appointment only · (954) 321-0507.