Dealer buys up unpaid car loans
Help is on the way.
Saturday, August 8, 2009
The more than 40 people whose trade-in loans were never paid off when they bought new cars at the Champion dealerships at Iron Mountain Autoplex in Windsor could soon catch a break.
Weld County Garage owner Warren Yoder is in the process of buying 20 of the cars, and Iron Mountain owner John Chamberlain's business partner is said to be buying the remainder that hadn't already been paid off.
“We thought what the heck? Our inventory's high, but we thought there was something we could do to help John on one hand and start making these payoffs,” Yoder said. “It's going to take, obviously, a while for all the paperwork to go through, but by next week, we know at least 20 will be taken care of. ... Hopefully, it's a good thing; 20 people now can finally have a big sigh of relief. I couldn't imagine being in that situation.”
The state Department of Revenue shut down the five Iron Mountain dealerships on July 17 for failing to pay off more than $669,000 in loans on 49 trade-ins to the dealership since May. The situation had left many new car owners with two car payments and one car.
Financial troubles had plagued the dealerships. Problems came not only from the recession that began last year and put a clamp on car sales, but also spring bankruptcies of General Motors and Chrysler. Chamberlain's sole financing was through Chrysler, which froze his financing. Just prior, his bank, New Frontier, had been shut down by the Federal Deposit Insurance Corp. He had $6.7 million in loans with the bank.
Chamberlain voluntarily surrendered his dealerships to Chrysler Financial last week, essentially giving up his dealerships before he was foreclosed on. He owed Chrysler just under $21 million. He still faces fines of up to $1.6 million for more than 200 counts of violating state regulations in various ways involving not paying those vehicle trade-offs.
“Those guys stepped up. They rode in on a white horse and put up almost $300,000,” Chamberlain said late Friday, noting that he asked Lee and Warren Yoder for their help. “I was just impressed. We were tough competitors. It impressed me that a competitor, who we fought hard against over the years, did something like that. I don't think most guys would have done that.”
Chamberlain said a business partner, whom he would not name, will buy the remaining vehicles for his dealership, also which he would not name.
“It's huge, and it sped up the process by weeks,” Chamberlain said of the Yoders' intervention.
Warren Yoder said Chamberlain and his partners had to bring quite a bit to the table to take care of the deal.
“The cars weren't worth what the payoffs were,” Yoder said. “John had to come to the table with a pretty big commitment on his end.”
Yoder wouldn't reveal exactly how much he paid for the cars, which he had to buy through a wholesaler, and not Chamberlain directly.
The payoffs on the cars are now expected to be taken care of next week.
“Hopefully this will all be just water under the bridge in another week,” Yoder said. “It's not done yet, but they assured us the money is coming.”
That's good news for Bobby Vialpondo, whose wife bought their car recently at Iron Mountain in her name.
By Friday, she was contemplating bankruptcy, knowing she couldn't make two car payments.
“She's now in another room upset,” Vialpondo said. “I don't know what to do. Maybe this will make her smile.”
LINK:
Dealer buys up unpaid car loans | Greeley Tribune
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