In recent years, the used car dealership industry has seen a troubling trend: the decline of small, independent “mom-and-pop” dealerships, particularly in inner-city neighborhoods. Historically vital for providing affordable vehicles to underserved communities, these local businesses are increasingly being squeezed out by corporate giants employing unscrupulous tactics. A notable case involving NextGear Capital, Inc., one of the largest lenders to used car dealerships, exemplifies the damaging practices contributing to this trend. This article examines the systemic exploitation faced by small dealerships, particularly through corporate neglect and dishonest management.
Sun Set Auto Corporation, a Detroit-based used car dealership owned by an African American entrepreneur, has become one of the latest victims of this corporate exploitation. Legal counsel Brandon Kizy of B. Kizy Law has filed a formal complaint against NextGear Capital, detailing allegations of fraudulent activities and professional misconduct that have inflicted significant financial and reputational damage on the dealership.
According to Sun Set’s legal team, financial abuse began with unauthorized withdrawals from the dealership’s account, allegedly orchestrated by its own performance manager. These withdrawals resulted in substantial overdraft fees and other discrepancies, with the total damages claimed reaching $255,912.57 under applicable laws for treble damages. These manipulations were not isolated; rather, they formed part of a broader pattern of unethical behavior that has left Sun Set struggling to survive.
Allegations of Racial Discrimination and Intimidation
The case takes a more troubling turn with allegations of racial discrimination and intimidation against Sun Set’s owner. The performance manager reportedly sent racially offensive messages, including an image of chicken wings aimed at mocking the owner’s ethnicity. Such actions fostered a hostile work environment and severely disrupted business operations. Attempts by Sun Set to raise these concerns with NextGear leadership reportedly yielded no meaningful response.
Moreover, the performance manager allegedly threatened to lock the dealership’s account or repossess its inventory, tactics intended to coerce compliance regarding disputed charges. These threats pushed the owner into a corner with little legal recourse, further demonstrating the systemic neglect that plagues small dealerships.
The allegations also raise critical concerns under the Michigan Elliott-Larsen Civil Rights Act, which prohibits discrimination and allows victims to seek compensation for emotional distress caused by such actions.
Escalation of Misconduct: Larceny and Harassment
In September 2023, Sun Set claims that the performance manager coordinated the unauthorized towing of five vehicles from the dealership’s lot, including a 2018 Cadillac and a 2021 Chevrolet Blazer. This repossession was executed without NextGear’s authorization, suggesting it was a personal vendetta rather than corporate policy. A subsequent admission by the manager’s supervisor indicated prior knowledge of the incident, further implicating NextGear in a cover-up.
The situation escalated with allegations that the performance manager attempted to set fire to the dealership’s vehicles in retaliation. In October, several vehicles were stolen, allegedly orchestrated by the same manager, intensifying the dealership’s financial woes and safety concerns. A police report has been filed to investigate both the performance manager’s actions and NextGear’s potential complicity in these incidents.
Legal Action and Accountability Demands
In response to these severe allegations, Sun Set Auto Corporation is pursuing legal action against NextGear Capital. The dealership seeks reimbursement for all funds wrongfully withdrawn, along with treble damages totaling $255,912.57. Additionally, Sun Set is calling for administrative action against the performance manager for harassment, fraud, and theft, and has indicated readiness to subpoena relevant records, including communications related to the misconduct.
A Systemic Problem for Small Dealerships
Sun Set’s plight highlights a pervasive issue within the used car dealership sector. Many small dealerships, especially in inner-city areas, depend on lenders like NextGear Capital to finance their operations. However, when corporate representatives abuse their authority, these businesses find themselves with limited avenues for redress.
The broader implications of corporate neglect include a lack of oversight, failure to address complaints, and a culture of silence that allows misconduct to thrive. Despite reporting issues related to fraud and discrimination, Sun Set alleges that NextGear’s inaction has enabled the performance manager to continue his harmful practices unchecked. The situation at NextGear Capital exemplifies the challenges small dealerships face in an industry dominated by corporate interests. If predatory practices like these are not addressed, many independent dealerships may be forced to close, diminishing affordable car-buying options in inner-city communities and erasing a critical part of the automotive landscape. There is an urgent need for greater transparency, accountability, and regulation to protect these vital businesses and the communities they serve.
Contact details
Website link: www.sunsetautodetroit.com
Company name: Sun Set Auto Inc
Contact person: Dan Wells
Target Country: USA
City: Detroit
Email: sunsetautodetroit@gmail.com
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