Lawsuit: Stephen Toyota sold dozens of cars without paying back lender

Added: 2026-06-02

[00:00:00]A local car dealership is accused of owing Toyota millions of dollars. So, what does that mean for customers? Your consumer investigative reporter Cassidy Williams joins us now to explain.

[00:00:11]Cassidy?

[00:00:11]>> Well, Stephanie, I didn't know this, but when you buy a car at a dealership, in most cases, the car you're purchasing isn't actually owned by the dealership.

[00:00:18]There's a lender behind the scenes you don't know about. The car dealership then pays back the lender when you buy the car. So, what happens when the dealership doesn't pay back the lender for the car you just bought? That's a question the I-Team wanted to answer.

[00:00:31]When we stopped by Stephen Toyota in Bristol one day last week, the lot was nearly empty. Turns out there's a federal lawsuit filed by Toyota Motor Credit Corporation against Stephen Cadillac GMC and the owners of the business. The lawsuit says in late March, a Toyota representative went to the dealership and found 46 cars missing. That's more than 1.4 million dollars in inventory gone. But, the 46 cars weren't stolen. Attorney Daniel Blend with Consumer Law Group isn't connected to this case, but he has represented consumers in similar situations. We asked him to help explain what happened here.

[00:01:04]>> Car dealerships typically do not own their inventory, but rather they um borrow the money for the inventory. And the creditor is known as a floor planner.

[00:01:13]>> So, it was that floor planner from Toyota Motor Credit Corporation who accuses the dealership of selling dozens of cars without paying them back. So, what does this mean if you bought one of those cars? Blend says legally, it's still yours, and the debt is not your responsibility.

[00:01:28]>> Most consumers have no idea that the uh dealership may not have the title to the car that they're buying. Um but, they can rest assured that under the law that if they um pay the dealership for the car, and if they have no knowledge that the dealership is acting contrary to their obligation in their contract with the floor planner, then the car is the consumer's.

[00:01:55]>> Blend says a consumer will have an issue if the dealership did not properly register the car in their name and give them a new title as required by law. If that happens, Blinn says you should contact the Department of Motor Vehicles and file a complaint about the dealership, but that doesn't appear to have happened here. In May, court filings show Stephen Cadillac GMC and Toyota Motor Credit Corporation came to an agreement on how they will pay back the money, including the missing cars and other loans. It's over $5 million.

[00:02:22]So, what does that mean for the future of Stephen dealerships? The I-Team reached out to the lawyers representing Stephen Cadillac GMC weeks ago and left messages at the business, too. They have not responded, but Blinn says a lawsuit like this often means one thing.

[00:02:37]>> When a car dealership isn't paying its floor planner, that's frequently a sign that that dealership is about to go out of business.

[00:02:44]>> Now, a judge's order said if Stephen Cadillac GMC had not paid back the full $5 million by today, Toyota Motor Credit Corporation could start taking assets, including the land that the dealership is on, but Stephen Cadillac GMC asked the judge to put a pause on that deadline while they work on a settlement. Now, we called Steven's again today for comment and the person who picked up says they are still open, but told me to call back the main call the main number and ask for the owner for comment. When I pointed out the main number is how I was talking to them in the first place, the man told me he would take a message for me. I have not heard back. Your consumer investigative reporter, Cassidy Williams, Channel 3 Eyewitness News.