Damage Disclosure
New vehicles are occasionally scratched or dented during delivery. A car door might get dinged by a customer exploring your lot. And Michigan’s unpredictable weather is known to bring hail and fallen branches. Accidents happen, and the Michigan Department of State reminds you that there are rules to follow when those incidents require vehicle repair.
From the Michigan Dealer Manual, Chapter 3, Section 3-7.2
Disclosure Requirements – New Vehicle Damage
Written disclosure of damage and repairs are required when a new vehicle dealer is selling a new, demonstrator, executive or manufacturer, or program vehicle has been damaged and repaired, and meets the following criteria:
a) The dealer has knowledge of the damage and repairs to the new vehicle; and
b) The cost of the cumulative repairs – calculated at the rate of the dealer’s authorized warranty rate for labor and parts – exceeds either of the following threshold criteria:
- 5% of the MSRP of the vehicle; or,
- $750 in surface-coating repairs or corrosion protection restoration, or a combination of these items.
Additional notes from the Dealer Manual:
- The disclosure must include an itemization of the repairs performed.
- A disclosure statement is not required for any damage or repair of glass, tires, wheels, bumpers, audio equipment, in-dash components or components contained in the living quarters of a motor home.
- Disclosure of material facts is always necessary, regardless of the cost or extent of repairs.
Colombo & Colombo, P.C. has previously shared a form dealers may use to disclose damage and obtain customer signature. (Members may email MADA at news@michiganada.org to request a copy.) Dealers should attach copies of the repair orders showing the repairs made.
Used Vehicles? While damage disclosure isn’t mandated for used vehicles in Michigan, it’s still wise to be upfront.
Reviewed 07/2025
