And now the bank is sending the repo man.
One of the first rules of new car sales is this: be sure you can sell what you order. If not, you'll get stuck with overstock which, eventually, will be sold at a loss. It's a painful lesson now being felt by a Dallas, Texas Alfa Romeo dealership. Kamkad Automotive, according to local affiliate CBS 11, had 50 Alfa Romeos repossessed by its lender earlier this month and, sadly, that's just the tip of the iceberg. The dealership is facing millions of dollars in debt, dozens of customer complaints, and even unpaid rent. Kamkad's troubles seemingly began back in 2017 when it purchased far too many Alfa Romeos from the automaker.
It just couldn't sell them all and not only were those vehicles still left on its lot, Kamkad also owed its purchasing lender money it didn't have. After giving the dealership some time to try to make things work, the lender sent in the repo guys with some tow trucks to haul away those 50 unsold Alfas.
But a dealership doesn't go into millions of dollars in debt for something like this alone. Apparently, Kamkad Automotive backed out of a deal to buy a local Hyundai dealership at nearly the last minute. This sparked some further investigation and it turns out Kamkad's own dealership license was trying to be revoked by the Texas Department of Motor Vehicles. The TxDMV claims it received 77 complaints about other dealerships run by Kamkad's CEO, Ken Strickler. One customer claimed the dealership has yet to pay off her trade-in vehicle following her purchase of a new Alfa last April. She now has two monthly car payments and is still waiting on her license plates.
Strickler denies he backed out of the buying the Hyundai dealerships because of his own cash-flow problems, but the writing is on the wall. Literally.
There is a sign on the Alfa Romeo dealership's door, dated July 9, stating because it was behind on its rent payments, the landlord will no longer allow employees access to the building until the rent has been paid. By now you're got to be wondering how much exactly is Kamkad in debt. A state investigator told a complainant it was over $1.3 million, but it's really way more than that. Try $35 million – a figure that came directly from CEO Strickler. "I'm not trying to deflect the blame," Strickler said. "It's on us 100 percent. To lower our lender's risk, we had to increase customer dissatisfaction." And look where that got them, an official investigation that exposed everything.
Lesson of the day folks: never overextend your business.