Customer Sues Los Angeles Honda Dealership for Allegedly Filing False Police Report to Facilitate Repossession

A Los Angeles customer has filed a lawsuit against Keyes Honda, claiming the dealership orchestrated her arrest through a fabricated police report after she refused to surrender her vehicle in a financing dispute.

The lawsuit, filed in Los Angeles County Superior Court, alleges that Keyes Honda resorted to extraordinary measures when traditional repossession methods failed. According to court documents, the dealership contacted local law enforcement with false claims that the customer had stolen the vehicle, resulting in her detention by police officers who were essentially manipulated into acting as repo agents.

The dispute began when the customer, who had been making regular payments on her Honda, became involved in a disagreement over the terms of her financing agreement. Rather than pursuing standard channels for resolving such disputes, the lawsuit contends that dealership management deliberately misrepresented the situation to police, characterizing a legitimate contractual disagreement as vehicle theft.

Legal experts watching the case note that it highlights the increasingly complex relationship between auto retailers and customers in today’s challenging economic climate. With vehicle prices at historic highs and interest rates remaining elevated, financing disputes have become more common across the automotive retail landscape.

“What makes this case particularly troubling is the alleged weaponization of law enforcement resources,” said Marcus Johnston, a consumer rights attorney not affiliated with the case. “If proven true, it represents an alarming overreach by a dealership to leverage police authority in what is fundamentally a civil contract dispute.”

The automotive retail industry has faced mounting pressures in recent years. Dealerships are navigating a market transformed by inventory challenges, rising consumer expectations, and the growing influence of digital retail options. These pressures have intensified competition and, in some cases, led to more aggressive tactics in collections and repossessions.

The California New Car Dealers Association declined to comment specifically on the pending litigation but emphasized that its member dealerships are expected to adhere to strict ethical standards in all customer interactions. “The vast majority of California’s franchised dealerships operate with the highest level of integrity and in accordance with all applicable laws,” a spokesperson noted.

For Keyes Honda, part of the Keyes Automotive Group, one of Southern California’s largest dealership networks, the lawsuit presents potential reputational challenges beyond any monetary damages. The dealership has yet to file a formal response to the allegations in court.

Consumer advocates have seized on the case as emblematic of larger issues in automotive retail. “We’ve seen an uptick in complaints about aggressive collection practices since the pandemic,” said Elena Rodriguez of the Consumer Auto Protection Coalition. “But involving police through false reports represents a dangerous escalation that undermines trust in both the automotive industry and law enforcement.”

The Los Angeles Police Department has not commented on the specific incident, though department policy generally discourages officer involvement in civil matters such as vehicle repossessions absent clear evidence of criminal activity.

Legal observers suggest the case could have broader implications for how dealerships handle financing disputes. “If the court rules against the dealership, it could establish clearer boundaries for what constitutes appropriate collection practices in the automotive space,” said consumer finance attorney Kathryn Williams. “It also sends a message that using police resources for essentially civil repossessions could expose dealerships to significant liability.”

The customer, whose name has not been publicly disclosed in court filings, is seeking compensatory and punitive damages for false imprisonment, defamation, and emotional distress. The lawsuit also requests a formal acknowledgment from the dealership that the vehicle was not stolen and that the police report was filed without merit.

As vehicle affordability concerns continue to challenge consumers nationwide, industry analysts predict heightened scrutiny of dealership practices, particularly around financing and collections. The outcome of this case may well influence how dealerships approach similar situations in the future, potentially establishing new standards for the industry’s handling of financing disputes with customers.

The case is expected to proceed to discovery in the coming months, with Keyes Honda facing a deadline to respond to the allegations within the next several weeks.