If you aren't joking, the answer is yes. It doesn't fall under cruel or unusual punishment. Other than that from your question, I wouldn't recommend it for your reputation's sake.
IANAL, but if they are standing on public property, say the street in front of the company, the owner will need to get a restraining order to remove the protester from the area. They'll never seek one, as they don't want to plead their case if they truly screwed the protester.
I would suggest they chose different wording as well on the sign. "I am a thief" could be construed as libel (written on the sign) and the protester could be sued.
Instead, print "Lemons 4 Sale" and get the same results, without fear of libel.
This is slander, but I like how the little guy gets to tell the truth. I saw a group of plumbers do it in front of the new women's hospital in Bton Rouge for a few weeks. Right at the corner of Pecue and Airline.
I don't see a problem with any of the three signs.. you aren't naming a person or company.. even if you were naming the company and they brought you to court, you would have the opportunity to tell the judge why you stood in front the business.. anotherwords, you can say anything so long as its true and you are not under a gag ordered contract..
Caveat emptor. She bought a used car, most likely with no warranty expressed or implied. She also probably didn;t get anything in writing stating the issues with the car. As far as the dealer is concerned, they most likely followed the letter to the law. What's said while making a deal and what's in print are 2 completely different things.
If she hasn't done so, she should talk with them and explain the problem and ask them for any kind of help. Attitude and the way you go about something like that goes a long way. I'm in the car business and even though I sell everything AS-IS and have the customer sign four different documents stating and explaining the vehicle is AS-IS, but if someone has a problem and they come in with a good attitude and appreciates the help I'll bend over backwards to earn their business in the future and keep a good reputation.
If she has done that and a MAJOR problem does exist she could call the used car commission and make a report. They will contact the dealership and request that they help her. That would get her better results than standing in front of the dealership with a sign.