Santander Faces Class-Action Over ‘Worthless’ GAP Coverage
CHICAGO — A woman who claims she was duped into buying “void and worthless” GAP coverage on a used vehicle has filed a class-action lawsuit against the company that financed the transaction.
Joyce Pettye filed a lawsuit against Santander Consumer USA on Aug. 31, alleging the finance source violated the Illinois Motor Vehicle Retail Installment Sales Act and the federal Truth in Lending Act (TILA) when it purchased a retail installment sales contract associated with a 2012 Ford Focus she purchased from Al Piemonte Super Car Outlet in Northlake, Ill.
According to the lawsuit, Pettye was presented with a stack of documents related to her purchase and was instructed by dealership personnel to sign on the lines marked by the letter “X.” Among those documents was a contract for GAP coverage that cost $895, and was limited to purchases with a maximum APR of 24%. However, the APR on Pettye’s contract was 27.06%, rendering the GAP coverage “void and worthless, pursuant to its own terms,” according to the compliant.
Pettye also alleged that she was not presented with a copy of the disclosures required by the TILA “in a form she could keep” or told that she was making an additional purchase when she signed the GAP contract. In fact, according to the compliant, Pettye was “completely unaware that she had signed the [GAP contract], or that such signature represented an additional ‘non-required’ purchase.”
The lawsuit was filed as a class action on behalf of Illinois customers who signed a similar GAP contract that was void because their APR was also in excess of the coverage’s maximum APR limit.
“…The ‘Maximum APR’ for the ‘GAP Program’ at issue is not determined on an applicant-specific basis,” the complaint read, in part. “And a form addendum for the purchase of GAP protection reflecting a maximum APR was used in most or all of the automobile purchases, on credit, that include the purchase of such GAP protection.”
The suit seeks damages in an amount to be determined at trial and the return of finance charges improperly collected by Santander.
More Industry

Kia Closes Out Summer With a Bang
Its U.S. subsidiary broke multiple records in August, in part due to a surge of demand for hybrids models.
Read More →
Indiana Dealership Changes Hands
A 30-year-old Ford dealership in Indiana has a new owner and will soon be undergoing renovations to meet manufacturer requirements.
Read More →
Texas Dealership No Longer in the Family
The Ford store, a longtime cornerstone of the Houston market, is now part of one of the fastest-growing U.S. auto groups.
Read More →
Genesis Grows California Presence
The Cardinale Automotive Group opened its third Genesis rooftop in the Golden State, Genesis of San Bruno, a stand-alone dealership serving the San Francisco Bay Area.
Read More →
August Auto Sales a Mixed Bag
An early forecast shows strong business despite consumer hurdles, and hybrids are a big piece of their affordability coping strategy.
Read More →
EV Market Humming Along
July sales show steady growth as the segment stabilizes from last year’s artificial surge following pullback of federal support.
Read More →
Auto Loan Delinquency Rates Stabilize
Auto loans are a main driver of nonmortgage consumer debt, but delinquency rates stabilized in the second quarter across all credit risk tiers.
Read More →
EV Sales Recover in Q2
The EV sales roller coaster continues as numbers show improvement, but industry experts predict a year-over-year third-quarter decline and fourth-quarter jump.
Read More →
The Cheapest Hybrids to Fuel
The powertrain is increasing in popularity, in no small part due to its fuel economy. A new report lists the most efficient hybrids on the market.
Read More →
Hybrids and SUVs Gaining Ground
The most recent Kelley Blue Book Brand Watch found that only two nonluxury brands increased in shopper consideration, buoyed by their hybrid and SUV offerings.
Read More →