- Dealer accused of duplicate loans on sold vehicles.
- Stellantis says Iowa dealer owes more than $12M.
- Lawsuit seeks seizure of cars, parts, and equipment.
Stellantis has accused a car dealership in Newhall, Iowa, of running a multi-million-dollar fraud scheme tied to vehicle inventory financing. According to the automaker, the alleged operation involved duplicate loans taken out on cars that had already been sold.
The dealership, Sky Auto Mall, which operates locations in Newhall and Center Point, reportedly received loans from Stellantis to purchase vehicles for its inventory. In a newly filed lawsuit, however, Stellantis claims the dealer also secured similar loans from other lenders using the same vehicles as collateral.
Read: Dealer Sues After New Owner Discovers Lambo Had Ten Times The Mileage
Stellantis alleges the dealership then transferred vehicles between its locations to conceal the duplicate loans. Ford was reportedly among the other companies involved in providing additional loans.
In the lawsuit, Stellantis states that “by doing so, each lender would fund the purchase of these vehicles at both dealerships, thereby receiving the proceeds of the advances made to purchase the vehicles themselves, rather than having those proceeds paid to manufacturers or auction houses.”
What Does Stellantis Claim It Is Owed?
Stellantis alleges that Sky Auto Mall also failed to repay the loans after selling the vehicles, leaving the dealership with $1.4 million in proceeds. The automaker says the dealer owes $12.3 million, excluding interest and fees.
In addition to seeking repayment and punitive damages, Stellantis is asking the court to allow it to seize all vehicles, parts, and equipment Sky Auto Mall purchased under its financing agreement. As reported by KCRG, the total value involved could exceed $20 million.
The lawsuit further alleges that “Sky’s principals have acknowledged that they misled (Stellantis Financial Services) in conversations since Sky’s default and double flooring actions were discovered, including with regard to the financial reporting for Sky.”
According to one customer, the dealership’s questionable practices may have extended beyond the alleged duplicate loans. Speaking with KCRG, Jaylin Jones said he purchased a 2023 Ford Edge Sport from the dealer in early February after being promised a zero-down payment, which he says did not materialize.
He also claims the vehicle’s monthly payments were higher than expected and that the Ford’s final price ended up roughly $5,000 above the advertised figure
