Stellantis Says Iowa Dealership Ran a $12 Million Loan Scheme

admin — Wed, 11 Mar 2026 00:04:31 +0000

Stellantis Sues Dealership

In the auto industry, lawsuits usually go one way. Automakers are often the defendants in cases involving recalls, warranty disputes, or franchise disagreements. This time, the script is flipped. According to a report from ABC Affiliate KCRG off of Iowa, Stellantis has filed a lawsuit accusing an Iowa dealership of orchestrating a multimillion-dollar fraud scheme tied to vehicle inventory financing.

The complaint was filed by Stellantis Financial Services against Sky Auto Mall and its owners Igor, Yelena, and Alex Tovstanovsky. The dealership operates locations in Newhall and Center Point. According to the lawsuit, the dealership allegedly secured duplicate loans on the same vehicles, leaving the lender claiming more than $12.3 million in losses.

The Alleged $12 Million Loan Scheme

At the center of the case is a practice known in dealership finance as “double flooring.” Dealers commonly rely on floorplan financing to stock their lots, borrowing money to purchase vehicles and repaying those loans once the cars are sold.

Stellantis claims Sky Auto Mall used that system to obtain financing for inventory but then took out additional loans on the same vehicles through other lenders, including Ford Motor Company. The lawsuit alleges vehicles were moved between the dealership’s two locations to conceal the duplicate loans, while some cars were sold without repaying the associated financing, leaving roughly $1.4 million in proceeds unreturned.

Two Sets of Books and a Possible Inventory Seizure

The lawsuit also alleges the dealership kept two sets of financial records, one reflecting the duplicate loans and another designed to conceal them from lenders. Stellantis claims the dealership’s principals later acknowledged misleading the finance company after the alleged scheme was uncovered.

In total, the automaker says the dealership owes about $12.3 million, not including interest or fees. In a separate filing, Stellantis is also seeking permission from the court to seize vehicles, parts, and equipment tied to the financing agreement, which court documents say could exceed $20 million in value.

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The Dealership Model Is Already Changing

The lawsuit comes at a time when the traditional dealership model is already facing pressure from new car-buying trends. Online purchasing platforms have increasingly streamlined the process, allowing buyers to complete much of the transaction digitally rather than negotiating in person at a dealership.

At the same time, consumer sentiment about the buying experience is evolving. Recent industry surveys show buyer satisfaction reaching a 16-year high, even as vehicle prices remain elevated. This comes despite dealership reputations of persistent frustrations with in-person dealership interactions, including lengthy negotiations and confusing pricing structures.

Automakers are responding by exploring new sales channels. General Motors, for example, has launched a used-car marketplace to compete with online retailers such as Carvana. As digital retailing reshapes the industry, disputes like the Stellantis lawsuit add another layer of tension to a dealership system already undergoing significant change.

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Deducting Car Loan Interest: Quick Facts

The “No Tax on Car Loan Interest” provision in the One Big Beautiful Bill Act (OBBBA) allows eligible new car buyers to deduct up to $10,000 in car loan interest per year.
This deduction is only applicable to loans for the purchase of new cars made after Dec. 31, 2024.
There are strict eligibility requirements, including income limits and U.S. final assembly requirements.

The “No Tax on Car Loan Interest” provision of the One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, isn’t as simple as its title suggests. It does not automatically provide a tax break for interest on every car loan. Instead, only new car buyers who meet a specific set of qualifications can benefit.

Who Qualifies for the New Car Loan Interest Deduction?

Here are the essentials of this provision. You must meet all of the criteria in order to be eligible. If you miss even one, you don’t qualify.

New Car Loan Interest Deduction Qualifications Checklist

Your annual modified adjusted gross income (MAGI) is under $100,000 (or $200,000 for joint filers). The deduction phases out as income rises.
Interest must be paid on a loan that originated after December 31, 2024.
You are the first owner of the vehicle.
The vehicle must be for personal use, not for business or commercial purposes.
The loan is secured by a lien on the vehicle.
The vehicle is a car, minivan, van, SUV, pick-up truck, or motorcycle with a gross vehicle weight rating (GVWR) of less than 14,000 pounds.
The vehicle’s final assembly occurred in the United States.

If you meet all of the criteria, you may be able to claim the deduction. Always confirm your eligibility with a tax professional.

About Final Assembly

The new provision requires that eligible vehicles must have their final assembly in the United States. There are a few ways to tell where a car was assembled:

Dealer documentation: The final assembly location is listed on the vehicle’s window sticker or in sales material.
VIN: Check the car’s vehicle identification number (VIN). A VIN beginning with 1, 4, 5, 7F-7Z, or 70 came from a U.S. assembly plant.
Online tools: Use AutoCheck or Carfax to learn more about the history of the car in question, or use the VIN Decoder from the National Highway Traffic Safety Administration (NHTSA) to confirm the car’s assembly location.

If you are in the market to buy a new car within the next few years and want to take advantage of this deduction, incorporate the U.S. assembly requirement into your initial research.

Important Considerations

Lease eligibility

Interest included in lease payments does not qualify for the deduction.

Maximum deduction

The maximum deduction is $10,000 in qualified new car-loan interest per year.

Deductions timeframe

This legislation applies through 2028. If new laws take effect, this deduction may not apply to the entire life of your loan.

Refinancing

If a qualifying vehicle loan is later refinanced, interest paid on the refinanced amount is generally eligible.

Itemizing

The deduction is available whether you itemize or take the standard deduction.

Ineligible vehicles

Vehicles weighing 14,000 pounds or more are not eligible. Golf carts are ineligible.

Reporting and Guidance

For tax year 2025, the IRS is providing transitional relief and lenders won’t be required to use a new tax form. However, lenders and any other recipients of qualified interest will still be required to provide borrowers with a statement by January 31, 2026, showing the total amount of interest paid on the qualified vehicle loan during 2025.

Borrowers will need this interest statement and the vehicle’s VIN to complete Schedule 1-A when filing a 2025 tax return. Consult a tax professional to confirm eligibility and ensure compliance with current IRS guidance.

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