A Missouri dealership repeatedly made major misrepresentations about cash down payments, sales taxes and vehicle features, according to a federal lawsuit filed by Capital One Auto Finance, which bought dozens of loans on such vehicles.
Capital One's suit, filed Dec. 21, accuses Coad Toyota, in Cape Girardeau, of fraud, negligent misrepresentation, breach of a dealer agreement and other claims in connection with financing of "at least 34" vehicles. It seeks $619,690 in compensatory damages, plus an unspecified amount of punitive damages.
Capital One "was damaged because it was induced into purchasing receivables it otherwise would not have purchased at all, or would not have purchased under the current terms" and "was further damaged because the vehicles, which are collateral for the receivables, are worth far less than what the dealership represented," the lender said in the suit.
The dealership had not yet filed a formal answer to the court complaint but in a statement to Automotive News, Tim Coad, an officer of the corporation, said, "This unfortunate matter was just recently brought to our attention. Absolutely none of the loans assumed by Capital One are or ever have been in jeopardy. Most importantly, we would like to assure everyone that at no time were customers ever adversely affected in any way."
Coad's statement continued, "We are working together with Capital One representatives to see that this matter is resolved expeditiously. We are confident this matter will be resolved quickly, and our good relations with Capital One will continue in the future."