1. Is My Dealership Closing?
If your dealer is one of those being closed, I would highly recommend that you make contact with a dealer that has survived the cut as soon as possible. It is likely that there will be much longer lines and greater wait times for service as the number of Chrysler and GM dealerships are reduced. If you have any warranty work that needs to be done now, I would get that completed as quickly as possible.
2. Wrap Up Your “Dealer Specific” Issues Right Away
GM Dealerships slated to be closed, will not close for a few months or even a year or more. On the other hand, many Chrysler Dealerships will be closing in just a matter of weeks. If you have been promised an extra set of keys, a touch up of a scratch, or any other verbal promises, you should get those matters wrapped up ASAP (especially with Chrysler). There are occasions where a dealer may be working on documentation on your trade-in or title work on your new car for a few weeks; don’t let these matters linger. You need to resolve any pending transactions you have with a dealership that is on the closure list.
3. What Will Happen To The Thousands Of Cars On The Lots Of The Dealers That Are Closing?
Since GM dealerships will not be closing for more than a year, the existing inventory will be sold and simply not replenished. In the case of Chrysler, look for dealers that are closing to offer extremely aggressive pricing. I have been reading about never before seen discounts on Chrysler vehicles in recent days. The vehicles that are not sold will be transferred to the surviving Chrysler dealerships. From all accounts, it appears that the biggest discounts are on last year’s models that are still on the lot. So, if you are happy with a brand-new car but that is not the latest model, this could be a very unique buying opportunity. Of course, as I addressed in my article two weeks ago, I would not buy a Chrysler unless the discounts were substantial enough to offset the future risk of the company discontinuing operations. Although it is true that the United States government is backing Chrysler's warranties if they go out of business, I am not sure how easy it will be to get service under a Chrysler warranty. Nonetheless, I'm sure that if the prices get low enough there will be buyers.
Another interesting problem is what will happen to the remaining Chrysler vehicles that are not able to be transferred to the surviving dealers? These vehicles may end up being sold after a dealer is no longer officially associated with Chrysler. What this means, is that there may be a scenario where a consumer purchases a brand-new Chrysler but has absolutely no warranty because the dealer is no longer affiliated with Chrysler. I can only imagine the confusion this will cause if people do not fully realize that their brand-new Chrysler is not covered by a warranty.
4. Why Is It Being Reported That Some Dealers On The Closure List May Stay Open?
There are currently numerous lawsuits being filed by dealers that are being forced to close. In the case of Chrysler, the bankruptcy court may ultimately decide to allow some dealers to continue to operate that have been slated for closure. Many Chrysler and GM dealers are already mounting a variety of legal arguments in the attempt to retain their dealerships. No one knows the outcome of these court cases, but legal experts agree that due to franchise laws many dealers may have a strong case to remain in operation.
This is really an unprecedented situation and my best advice is to pay close attention to what is happening if you own a GM or a Chrysler.
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