The Michigan Vehicle Code (MVC) defines a used vehicle as "any motor vehicle to which a certificate of title and license plates have been issued and which vehicle has been registered for use on the highways by a consumer or dealer." The MVC also states that a new motor vehicle is one "which is not and has not been a demonstrator, executive or manufacturer's vehicle, leased vehicle, or a used or second-hand vehicle."

The Michigan definition of new and used vehicles is consistent with Title15, Chapter 28 of the United States Code (USC). The USC states that new automobile means "an automobile the equitable or legal title to which has never been transferred by a manufacturer, distributor, or dealer to an ultimate purchaser."

A vehicle becomes used when a consumer or dealer has applied for the title and registered the vehicle for use on public roads. A used vehicle dealer purchasing a vehicle on an assigned Manufacturer's Certificate of Origin has exceeded the authority of the used vehicle dealer license. Dealers are reminded that a new vehicle dealer license is required to buy or sell new vehicles. A new vehicle dealer may only sell a vehicle make covered under a franchise agreement with the manufacturer.