Target 8: Dealership fined after car repo

Secretary of State's Office says Midwest Motors' 'spot delivery' was illegal

Midwest Motors in Plainwell. (File)

PLAINWELL, Mich. (WOOD) — The state is taking action against a West Michigan car dealership for selling a car and then demanding its return after financing fell through.

It’s a practice called “spot delivery,” and the State of Michigan calls it illegal and unfair to consumers.

Target 8 first reported on it in April after Mark Todd filed a federal lawsuit against Midwest Motors, a used car dealership on M-89 in Plainwell. Midwest Motors sold Todd a 2013 Kia in February, took his down payment and Jeep trade-in, had him sign the Application for Title and let him drive the car off the lot.

But a week later, Midwest called Todd and told him he’d have to bring the vehicle back.

Mark Todd
Mark Todd.

“He informed me that the financing had fallen through and that the vehicle wasn’t mine,” recalled Todd.

Midwest Motors ultimately repossessed the vehicle.

The Secretary of State’s Office has now weighed in on the conflict, citing Midwest Motors for six violations of Michigan’s Motor Vehicle Code. Among them, the state cited Midwest for failing to apply for title and registration within 15 days of sale, failing to provide copies of documents at time of signing, and repossessing the vehicle after the loan was rejected.

“That’s not legal in Michigan,” explained Andrea Miller, spokesperson for the Department of Insurance and Financial Services, or DIFS.

The Secretary of State and DIFS say that even if a third-party lender ends up denying a loan, the dealership is required to honor the original agreement and accept the monthly payments the customer would have made to the third-party lender.

Miller said customers need to know their rights before they start shopping for a vehicle.

“We want them to know that once they drive off and they sign the paperwork, it’s illegal for the dealership to take the car back,” she said.

The Secretary of State’s Office put Midwest Motors on probation for 24 months, fined it $2,500 and is requiring it to undergo dealer training.

Midwest Motors’ attorney, Randall J. Groendyk, told Target 8 that the dealership is working with the Secretary of State’s Office to resolve its concerns.

“We are aware of the allegations of the Michigan Secretary of State in a May 17 letter to Midwest Motors, which in many ways are similar to the allegations in the pending lawsuit, which Midwest denies,” Groendyk wrote in an email to Target 8.

>>PDF: SOS letter to Midwest Motors

In its response to Todd’s lawsuit, an attorney for Midwest Motors wrote that the deal was always contingent on getting final approval for the Todd’s loan through a third-party lender.

>>PDFs: Lawsuit | Response

Midwest says the credit union that initially agreed to service Todd’s loan later backed out after examining the credit history of Todd’s cosigner more closely.

Don Miller, Midwest Motors
An undated photo of Don Miller, the owner of Midwest Motors.

“Do you have any f***ing cash?” Donald J. Miller, Midwest’s owner, asked Todd in a heated phone call that Todd recorded. “Because if you don’t. You don’t have a car. Do you understand that?

When Todd refused to return the Kia and pick up the Jeep he traded in, Miller called Michigan State Police to report the Kia stolen.

A trooper called and spoke with Todd about Miller’s complaint, but MSP did not pursue the case.

“It’s definitely important for us, with the help of you, to get the word out that this (spot delivery) is happening, and it’s not legal in Michigan,” said Miller of DIFS.

If you think you were victimized by a “spot delivery,” you can file a complaint with the Secretary of State’s Office and the Department of Insurance and Financial Services.



DIFS website and complaint form (PDF)

Secretary of State website and complaint form

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