Ethan, Emma and Thayer arrive at the lake as Dan pulls the Mercers' car from the water. Inside, he finds Sutton's phone... and nothing (or, more to the point, no one) else. When pressed, "Sutton" agrees that it is in fact "her" phone. Backed into a corner, she scrambles for an excuse for why she took the car and didn't explain so earlier. As she founders, Ethan jumps in and takes the blame, claiming he took the car so they could go out for a romantic ride like they used to in the old days. He says he lost control of the car, which is how it ended up in the lake. Emma sputters that it's true and insists she didn't tell anyone so as not to ruin the party. Dan tells them he doesn't care whether this was an accident, a nostalgic romp or whatever they're claiming, he still has to take them in.
Back home, Kristin hangs up with Rebeccannie as Ted arrives home. Despite noticing Ted's weirdness about Rebeccannie, Kristin wants to be fast friends with her. Ted can only register a thinly veiled look of concern before Laurel comes in to ask if either of them have seen her bracelet. They haven't, so she grows stressed and blabbers the whole story that it was Justin's mother's and, thus, super-important. She leaves in a tizzy as Ted and Kristin wonder why she's lied to them and claimed it was vintage instead of just telling them in the first place that Justin had given it to her.
Over at the police station, Dan calls in Alec about the Mercer car caper. He thinks the kids are acting "super-strange" about things, but Alec doesn't want to get into it, so he deflects by upbraiding Dan for his teen-speak. Meanwhile, what he should be upbraided for is leaving "Sutton" and Ethan in an interrogation room together. Isn't that like Coppery 101 to separate suspects (or whatever they are considered at this point)? Before they can caucus on what's happened to Sutton, Alec comes in to ask them why they would need to take a spare car when Emma has one of her own and Ethan has a motorcycle. They stick to their "trip down Memory Lane" story. Alec asks what he thinks they should do, and "Sutton" is all, "Well you could just let us go since I'm your favorite goddaughter and all... [insert awkward laugh here]." Alec asks what he should do about Ethan. Ethan steps in and says he should do whatever he has to, thus proving Dan's fears about Ethan being the fall guy in all this.
Cut to downstairs, where Dan is telling the Mercers this incident is "a big step back" for Sutton. They agree but still insist they'd prefer to take her discipline into their own hands. At that moment, Alec joins them and says he's decided not to press any charges. Because there apparently is no such thing as truth or consequences in this town. You can just toss a car into a lake willy nilly and, meh, who needs a spare car when you've got the world's creepiest D.A. and least effective sheriff?