Chrysler Capital Sued in Auto Loan Class Action Lawsuit

Chrysler Capital LLC is being sued in an auto loan class action lawsuit, which alleges the financial department of the Chrysler Group LLC uses local dealerships to get around usury laws while exploiting New York’s low income consumers by financing high interest rate car loans.

Plaintiff Franklyn C. Garcia is pursuing this Chrysler Capital class action lawsuit in order to represent himself and a Class of potentially thousands of New York consumers. Garcia claims that he and other consumers in this Class were targeted by Chrysler’s “predatory conduct,” which allegedly includes using local New York dealerships and ambiguous phrasing to skirt state usury laws. The Chrysler Capital auto loan class action lawsuit also alleges that Chrysler, through the dealerships, issued auto loans featuring annual interest rates that are higher than 16 percent—New York state’s maximum allowable auto loan interest rate.

According to the auto loan class action lawsuit, “Chrysler Capital targets vulnerable, low-income consumers like Mr. Garcia who desperately need a car to go to work and take care of their family and who have essentially no bargaining power. Knowing the fundamental importance of automobiles in these consumers’ lives, Chrysler Capital takes advantage of them by imposing interest rates that are unreasonable, unfair and illegal under New York law.”

Garcia allegedly earns a yearly income of $34,000 a year. In March 2014, he visited Eastchester Chrysler Jeep Dodge, who has been named as codefendant in in this auto loan class action lawsuit, and bought a used 2011 Dodge Durango for $26,000. However, the New York dealership allegedly sold the car to Garcia with an auto loan interest rate of 23.67 percent, an abusive rate. According to the Chrysler Capital class action lawsuit, the plaintiff will have paid $54,000 for his vehicle by the end of the 72-month auto loan period.

According to Garcia’s class action lawsuit, Chrysler Capital employs retail installment contracts that allow the financial arm of Chrysler Group to conceal auto loan transactions that are above the 16 percent state maximum. He further alleges that Chrysler Capital does not give the money directly to consumers, and instead gives this auto loan money directly to the local dealerships like Eastchester Chrysler Jeep Dodge. Consumers like Garcia then make payments for the vehicle with these abusive interest rates in place.

After this is complete, Santander Consumer USA, Chrysler Capital’s controlling member, allegedly secures the subprime auto loans like Garcia’s for sale to investors.

The Chrysler Capital auto loan class action lawsuit alleges: “Chrysler Capital uses the form of the retail installment contract as an artifice to disguise its usurious intent. Upon information and belief, Chrysler Capital has intentionally charged illegal interest rates to thousands of New York consumers, directly causing them financial harm.” The plaintiff claims he and the Class are entitled to full restitution of all interest they have paid on their auto loans beyond the New York legal limit of 16 percent a year.

The plaintiff is represented by Christopher B. Dalbey and Robin L. Greenwald of Weitz & Luxenberg PC and Karla Gilbride of Public Justice PC.

The Chrysler Capital Auto Loan Class Action Lawsuit is Garcia v. Chrysler Capital LLC, et al., Case No.1:15-cv-05949, in the U.S. District Court for the Southern District of New York.

UPDATE: The Chrysler Capital Sued in Auto Loan Class Action Lawsuit was dismissed on September 30, 2017.