Proper and Improper Use of Dealer Plates

Agency: 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.

Who

 

As to who may use a dealer plate, the relevant law is Section 244(4) of the Michigan Vehicle Code. MCL 257.244(4).  It states that a dealer may use a dealer plate and specifically defines “dealer” to include three types of individuals, beyond the dealers themselves, who may use a dealer plate: “employee, servant, or agent” of the dealer. 

 

Since the Michigan Vehicle Code does not define “employee, servant, or agent,” a dictionary definition is reasonable.  An “employee” is someone who is employed by the dealer for wages or salary; an “agent” is someone who acts on behalf of a dealer; and a “servant” is someone who performs duties for the dealer. 

 

“Family member” is not included in the list of individuals who may use a dealer plate. The mere fact of being a dealer’s family member is not enough to use a dealer plate. However, if a dealer’s family member is an employee, servant, or agent of the dealer, that person would be allowed to use a dealer plate.  This is not a new law. This clarification is simply offered as a reminder of what the law is and has been for a long time.

 

How

 

With respect to how a dealer plate may be used—that is, what is an appropriate use for a dealer plate—the relevant law is Section 244 of the Michigan Vehicle Code. MCL 257.244. Dealer plates may be used on dealer-owned vehicles driven by employees, servants, or agents of the dealership for any purpose, provided that the vehicle is not a “service vehicle.” The Michigan Vehicle Code does not define “service vehicle” but a common understanding would include courtesy cars, loaners, daily rental, lease, vehicles used for obtaining or delivering parts, and vehicles used to provide roadside service or tow disabled vehicles.

 

Authorized use of a dealer plate includes, but is not limited to:

 

  1. Dealer-owned vehicles being driven to and from repair facilities, storage lots, and other locations where vehicles are being held prior to sale;

  2. Dealer-owned vehicles being moved to locations where they may be bought or sold;

  3. Dealer-owned vehicles driven by a prospective customer of a dealership for testing of demonstration purposes for up to 72 hours;

  4. A person who has purchased a vehicle from a dealership may operate the vehicle with a dealer plate for up to 72 hours after taking delivery of the vehicle; and

  5. Dealer-owned vehicles driven by employees, servants, or agents of the dealership to transport monies and documents (related to the sale of vehicles) to banks and Secretary of States offices.
     

Unauthorized use of a dealer plate includes, but is not limited to:

 

  1. Vehicles not owned by the dealership, except a vehicle sold to a customer not more than 72 hours after taking delivery;
  2. Vehicles used as service vehicles or wreckers. Service vehicles include courtesy cars, loaners, daily rental, lease, vehicles used for obtaining or delivering parts, and vehicles used to provide roadside service or tow disabled vehicles. (Service vehicles must be titled and registered to the dealership);
  3. Vehicles owned by the dealership when operated by a person who is not the dealer, the dealer’s employee or agent, or a prospective purchaser;
  4. Vehicles titled as scrap or salvage, unless the salvage-titled vehicle has been inspected and recertified by a specially trained police officer.

 

Documentation: Helpful Tips

 

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

 

Ownership of the vehicle:

 

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 the RD-108 that shows both dealers' names and addresses.

Used vehicles - a copy of the front and back of the assigned certificate of title.
 

Operation of a dealer owned vehicle with dealer plates:

 

Employees, agents, servants - a document clearly identifying the dealership and the operator as an employee, agent, or servant that is authorized to use the vehicle.

 

Prospective customers - 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.

 

 

A copy of the certificate of fleet insurance for any and all dealer-owned vehicles must be present in the vehicle.
 

When a customer has purchased a vehicle and is driving on a dealer plate for 72 hours, a signed and dated copy of the RD-108 showing the new owner's name and address should be provided, as well as a certificate of no-fault insurance for the vehicle.