Evening star., 1947-06-22
Court May Decide
When Cars Become
Used Under Law
BY The Associated Press

new passenger automobile become
a fused" car under the motor vehicle
laws?
The question probably will come UP
for court determination before the
end of the current drive of Mich
igan's attorney general, Eugene r.
Black, against uSed-car dealers
whom he accuses of Illegally trading
In new cars-at premium prices.
The attorney generals charge
against the used-car merchandisers
is based on the fact they are licensed
only to deal In secondhand vehicles,
but he also has indicated that he
Is seeking evidence Of conspiracy
between new and used automobile
retailers.
Use Of Forged Names Charged.
Attorney General Black claims to
have found instances where some
new-car dealers have used fictitious
or forged names for original registra-
ton of cars received from the fac
tories and then transferred them
to dealers in used vehicles at higher
than list prices to be resold at still
higher prices.
To investigate all phases of what
he charges are BLACK market" oper-
ations in new-car sales, the attorney
general has initiated grand jury in
quiries in Flint and Detroit.
The used car dealers, denying any
conspiracy with new vehicle retail
ers, insist they have been doing
business exactly as we have for the
last Is to 80 years" buying cars from
original owners and selling them to
other purchasers.
They maintain that If an auto
mobile is driven directly from a
new-car dealers floor to their lots
by its initial registered buyer and
sold to them, 1t is q used" car un-
der the vehicle law, even though 1t
may have only a mile on its speed
ometer.
Dispute Huge Profits" Charge.
They insist also that reports of
huge profits" on the sale of nearly
new cars are untrue, although the
prices obtained from them in some
instances are as much as so per cent
above original factory list. I'VE
have to pay considerably more than
list price to get them" the used
car dealers assert. "A sizeable part
of the markup goes to the individual
who got original delivery of the cal" F."
The used car merchants have chal-
lenged as unconstitutional q pro-
posal by Detroit new vehicle retail
ers that original purchasers be re-
queSted to sign agreements not to
resell their new cars within SIX
months after purchase. They OBJ
ject especially to proposed relief"
stipulation in the agreements provid-
ing that II a new car owner must
sell his vehicle within six months
ne would return 1t to the dealer from
whom 1t was purchased and accept
10 per cent less than the original
price.
If the proposed plan is imple-
mented by the franchised new-car
dealers, it is virtually certain to
be tested In court. The test prob
ably would be made not only on
the question of the legality of the
suggested agreement but on the
refusal of a dealer to sell a new
car to person declining to sign
the stipulation.
Sharp Legal Battle Seen.
That a sharp legal battle is In
prospect on all phases Of the State S
crusade goes without saying, for
many millions of dollars in busi-
ness are involved.
Meanwhile, however, car buying
and selling goes on as briskly as
ever in Detroit's used car lots, par
ticularly in Livernois avenue, where
some of the worlds largest lots are
located. Seemingly the dealers are
as eager to buy as they are to sell.
Signs on the lots promise high
est SIS for your car; or bring in
your title, take away cash" Others
announce Texas" or California
| buyer inside
Most of the dealers do a whole
sale as we'll as retail business in
used cars and many of the vehicles
bought in Livernois avenue are
shipped to various points through
out the country.
Shanghais 200 prewar chemical
plants have shrunk to II, China