Proper and Improper Use of Dealer Plates

Agency: Secretary of State

The Department of State is often asked by law enforcement or licensed dealers to explain the proper and improper use of dealer plates.  The following guidance is based on both state law and opinions previously published by the Office of the Attorney General.

The statute governing the use of dealer plates is Section 244 of the Michigan Vehicle Code (MCL 257.244; MSA 9.1944). The relevant sections of the statute are as follows:

Sec. 244(1). "A dealer owning any vehicle of a type otherwise required to be registered under this act may operate or move the vehicle upon the highways without registering each such vehicle if the vehicle displays, in the manner prescribed in section 225, 1 special plate issued to the owner by the secretary of state. For the purposes of this subsection, "dealer" shall include any employee, servant or agent of the dealer."

Sec. 244(3). "The plates described in this section shall not be used on service cars or wreckers which are being operated as an adjunct of a licensee's business. . ."

Proper Uses of Vehicles Bearing Dealer Plates Include:

1. Employees, servants, or agents of a dealer may operate a vehicle owned by a dealer for any purpose, provided that the vehicle is not a "service vehicle." This group of permissive users includes the dealer, full and part-time employees, and authorized agents. Examples of proper use of dealer plates on vehicles include:
   
   
   • Dealer-owned vehicles being driven to and from repair facilities, storage lots, and  other locations where vehicles are being held prior to sale.
   • Dealer-owned vehicles being moved to locations where they may be bought or sold.
   • Dealer-owned vehicles driven by employees, servants or agents, or family members for any use except as a service vehicle.
     
     
2. There is no time limit upon the use of a vehicle with a dealer plate for persons described in paragraph 1 above.
   
   
3. A prospective customer of a dealership may operate a vehicle owned by the dealership for testing or demonstration purposes for no more than 72 hours.
   
   
4. A person who has purchased a vehicle from a dealership may operate the vehicle on a dealer plate for up to 72 hours after taking possession of the vehicle if an application for vehicle registration has been made and the purchaser carries proof of purchase that indicates the date of sale.

Improper Uses of Vehicles Bearing Dealer Plates Include:  

1. Vehicles not owned by the dealership except when used within  72 hours of purchase by a  customer.
   
   
2. Vehicles used as service cars or wreckers. Examples of "service cars" include daily rental,   lease, loaners, or courtesy vehicles, vehicles used to chase and deliver parts, or vehicles used to provide roadside service or tow disabled vehicles.
   
   
3. Vehicles titled as scrap or salvage unless the salvage-titled vehicle has been inspected and  recertified by a specially-trained police officer.

Plate Identification

Law enforcement personnel are encouraged to verify dealer plate ownership through LEIN (Law  Enforcement Information Network). The plate record contains the name and address of the dealer  who owns the dealer plate.

Vehicle and Driver Identification

Dealers may assist law enforcement agencies by providing certain documents to persons operating  vehicles with dealer plates.

Dealer-Owned Vehicles

Ownership

New Vehicles---A copy of the manufacturer's certificate of origin or a copy of that portion of the invoice showing the dealer's identification and the vehicle identification number of the vehicle being driven.

Dealer Trades---A copy of either an RD-108 or MV-17 Dealer Reassignment form that shows both dealers' names and addresses.

Used Vehicles---A copy of the front and back of the assigned certificate of title.

Authorization

A form clearly identifying the dealership that authorizes the operator to use the vehicle. If the operator is a prospective customer, then a statement that the vehicle is being operated for demonstration purposes including the date and time that the prospective customer took possession of the vehicle. The form should include the dealership's telephone number.

Insurance

A copy of the certificate of fleet insurance for any and all dealer-owned vehicles.

Customer Purchase of Vehicle

Ownership

A signed and dated copy of the RD-108 showing the new owner's name and address.

Insurance

A certificate of no-fault insurance for the vehicle.

We hope this information is helpful to dealers and law enforcement agencies. We recommend and encourage copies of this document be provided to patrol officers and dealer employees.