30 Luxury Cars Repo'd

30 New Vehicles Repo'd From Luxury Car Dealer

Bob Roberts Reporting

CHICAGO (WBBM) - The repo business is booming in today's faltering economy. But here's a sign that it's really getting bad: a manufacturer, in effect, repossessed 30 new cars Tuesday from a dealer.
WBBM's Bob Roberts reports:

Police stopped traffic on Ontario Street as 30 new Infiniti vehicles that had been assigned to Infiniti Gold Coast Luxury Motors, at 640 N. LaSalle St.--that's 14 SUVs and a handful of sedans and coupes--were loaded onto transports under the watchful eyes of Cook County Sheriff's Police deputies.

Sheriff's deputies are used to working on evictions, but a spokesperson said it was only the third time in two years that cars have been seized from a dealer in Cook County who could not make good on payments for them.

While that may not seem like a trend, the spokesperson said the last time it happened before 2007 was in the year 2000.

The spokesman said deputies acted promptly, following the issuance of an order, known legally as a "replevin" order, by a Cook County Circuit Court judge.

At first, Infiniti Gold Coast personnel contacted by WBBM maintained that the cars were merely being moved to their new showroom nearby, and made it clear that the agency remains in business.

"If the doors were closed we wouldn't be here," the salesman said. "You want to buy a car? I'll sell you a car to show we're still open."

Yet another salesman joked, "The police stopped traffic because President Obama is coming to buy his Porsche."

While the comment drew a laugh, it underscored the difficulties facing the auto industry in a faltering economy. At the recent Chicago Auto Show, Chrysler President Jim Press said the smallest of Detroit's Big Three was aggressively downsizing its dealer network.

WBBM has attempted to contact Infiniti Gold Coast Luxury Motors for comment. So far, no response.

"The police stopped traffic because President Obama is coming to buy his Porsche."

Nearby Stockburger Chrysler remains open.

A luxury auto seller with five Chicago area dealerships is being investigated by the state attorney general after complaints that it has sold cars despite customers placing hefty deposits -- $5,000 for one car, for example -- on them.

Some 50 complaints about Luxury Motors Inc. have come in to the attorney general's consumer protection division since January 2000, spokeswoman Gail O'Connor said Sunday.

Luxury Motors president Joseph Abbas told Crain's Chicago Business the deposits are to hold the prices of cars, not necessarily the cars themselves. "If a guy makes me wait three or four weeks, and I'm paying interest on a car, that's not fair. . . . We give that [deposit] money back," he said. The attorney general's office is investigating whether that policy is being properly communicated to customers, O'Connor said

Luxury Motors says consumers who pay a deposit are securing the price of a car, not necessarily the car on the dealer's lot at the time of the deposit. This policy is stated on the dealer's deposit agreement. In the case of the Florida customer, the attorney general's office says he was not aware of the deposit policy.

"That's not true," says Dave Rafus, vice-president of Luxury Motors' Bentley dealership in Downers Grove, who says he knows the customer in question.

Mr. Rafus points to the clause on Luxury Motors' standard deposit agreement. "Ninety-nine percent of people understand (the policy), but there is always the 1% who doesn't," Mr. Rafus says.

Joe Abbas, Luxury Motors' president, says some of the complaints about deposits stem from consumers who are unable to arrange financing for a car and are angered when the car is sold. "If a guy makes me wait three or four weeks and I'm paying interest on a car, that's not fair. We can't have one guy take it off the market," says Mr. Abbas. "We give that (deposit) money back."

DEALER A GIANT HERE

Luxury Motors is a giant in Chicago, selling 7,000 cars valued at $225 million last year. A Bentley spokeswoman says Luxury is "one of the largest" Bentley dealers in the U.S., and that the dealer is in good standing with the automaker. According to a Bentley survey, Luxury's consumer satisfaction score was 95 out of 100 last year, compared with a regional average of 94.2.

Allegations by consumers and in numerous lawsuits against Luxury Motors seem to center on Luxury's used-car business. Those complaints include failure to deliver a title promptly, failure to disclose a vehicle's history and selling cars with nullified warranties.

A customer from Green Bay, Wis., bought a 2000 Mercedes E320 from Luxury for $21,069 in cash on Oct. 27, according to a bill of sale provided by the customer, who declined to be identified and has not sued Luxury Motors. Mr. Abbas says the customer didn't receive the title until Jan. 21. A dealer has 20 days after a sale to submit title paperwork to the state for processing, according to Jim Kazimour, commander of the secretary of state police in Cook, Lake and DuPage counties.

"We expanded our offices and moved to a bigger one. We went from six people to 22 people in our office and we were just overwhelmed," says Mr. Abbas. "We had the title on Nov. 11, and we lost it in the move."

Mr. Rafus says the dealership has hired new workers to address the problems. "I just added another person who's just a librarian for titles. That's all they do is track titles," he says.

The Illinois attorney general's office says it has received about 50 consumer complaints against Luxury Motors Inc. since 2000. Photo: Brett Kramer

SUITS PENDING

Chicago law firm Krohn & Moss Ltd. is pursuing eight cases against Luxury, all in DuPage County Circuit Court. "I would say that's a lot," says firm partner Adam Krohn. "I can't think of another dealer we have eight with."

One of Mr. Krohn's clients alleges Luxury failed to pay off the loan on his trade-in car, damaging the client's credit rating. Another claims he bought a defective car that Luxury had already repurchased from another customer under lemon laws. Another client alleges he bought a car he thought was under warranty but, after a $3,100 repair bill, discovered was no longer covered. All of the cases are pending. Luxury denies any wrongdoing in connection with the Krohn & Moss lawsuits.

"There are some people no matter what you do you can't make them happy," Mr. Abbas says. "Worst case, we tell the customer we will take the car back. There is not one complaint that hasn't been answered yet."

The Better Business Bureau has collected 47 complaints on Luxury in the last 36 months, 16 of which are unresolved, according to a business bureau spokesman. The business bureau says the remaining 31 complaints have been resolved, which in most cases happens through mediation. Mr. Abbas says he has tried to make good on all complaints.

The Illinois secretary of state police, charged with inspecting businesses for compliance with licensing requirements, has not had any complaints about Luxury Motors, nor is the dealership on the police's "hot list" of problem dealers. "If there was something glaring, they would be on our hot list," according to Mr. Kazimour, the secretary of state police commander.

The attorney general's office took 16 actions against car dealers in Illinois in 2004, according to the spokeswoman.