Endangered GM/Chrysler Dealers– Pillage Or Fire Sale

Chrysler is expected to terminate more than 1,000 of its 3,100 dealer agreements. Some estimates put the job loss at around 200,000. The GM cutbacks will not be as immediate as those by Chrysler but the affected GM dealers will not have sales and service agreements renewed after the fourth quarter of 2010.

Do these closers affect the price of a new GM/Chrysler, Dodge or Jeep?

  • There can be a panic sale for buyers to get into shopping frenzy of unprecedented deals on GM/Chrysler new cars or trucks
  • The fire sales are aimed at dealers closing and eliminating the units in their yards as basements deals
  • GM/Chrysler stores with ongoing business may suffer losses on deals in fire sales
  • The June deadline might enhance new Chryslers, Dodges and Jeeps sales in the yards of closing dealerships
  • If they do not sell the Chryslers, Dodges and Jeeps the closing dealerships lose thousands of dollars on them

People will go out of their way to buy a vehicle from a GM/Chrysler dealer going out of business. Any convenient dealer can attend on their service or warranty claims, thereafter.

Fire sales by the GM/Chrysler dealers usher in good news for buyers and bad news for the dealers:

  • Dealers had borrowed money to buy their inventories.
  • Whether in business or not they must repay
  • They cannot return vehicles
  • In light of the GM/Chrysler sales plummeting over as long period most of the closing dealers are heavily saddled with large amounts of inventory
  • Vehicles sold at cost price are no solace with the interest payments looming large

What causes the buying frenzy?

  • Chrysler shut production and only the dealers have large inventory
  • People rush to buy early or for last minute super bargains before the final closure
  • Competitors hog on new car deals by the closing Chrysler dealers
  • Surviving Chrysler dealers cashing in on the extinct dealer’s inventories at throw away prices

There was a rebate incentive of $4,000.00 cash back on the 2009 Chrysler 300C till 06/01/2009.

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