What to do if your local car dealership is closing
Posted
May 15 2009, 05:08 PM
by
Karen Datko
Rating:
You've probably heard that 1,100 General Motors dealerships got word today that their contracts will not be renewed in October 2010. Earlier this week, Chrysler announced that almost 800 of its dealerships will close next month.
What if the dealership you do business with is among them? What should you do?
Here's some guidance we found from car bloggers and others:
GM said about 500 of the dealerships it's closing are very small, each selling fewer than 35 cars a year, and the rest were likely facing extinction on their own because of longtime poor performance. All told, they account for only 7% of GM sales. (The total doesn't include about 470 Saturn, Hummer and Saab dealers who are awaiting a separate fate. GM has also said it needs to shrink its dealership presence even further.)
Meanwhile, The Associated Press reported, "many dealers vowed to fight, first through a 30-day company appeal process, then possibly in court." Once a franchise agreement ends, the dealerships on either hit list can seek another franchise or live on as a used car dealer and/or shop.
Now, here's what you can do:
- First, find out if your local dealership will close. Chrysler's list (.pdf file) was made public. GM won't share its list, so Dave Thomas at Kicking Tires suggests you ask the dealership about its future.
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Keep track of the maintenance schedule in your owner's manual and get the work done on time while your dealership is still open, Philip Reed at the
EdmundsDaily blog advises. "Remember, if you just show up, and tell them how many miles are on your car, you are likely to be sold a lot of extra (or early) work," he said. (That's good information whether the dealership is closing or not.)
- Find out if your favorite mechanic is transferring to another dealership. Your factory-backed warranty will still be good, so if you have a mechanic you like and trust, you might want to keep him.
- Philip adds that if you have to travel quite a distance to find a dealership not affected by the closings, you may be able to get some basic maintenance done at an independent garage, but read the fine print of your warranty first.
What if you're in the market for a new car?
- GM dealerships that got the letter will put a priority on moving their GM inventory off the lot, so look for great deals. The Chrysler dealerships that are losing their franchise on or about June 9 will be even more anxious to make sales.
- Do not buy a dealer warranty, as it won't be good when the dealership closes. "Instead," Philip says, "make sure you have a ‘factory-backed' warranty that can be used at any franchised dealership."
If you've been dealing with one of the dealerships being closed by Chrysler, which is now in Chapter 11, you might have other considerations. AJC.com says that if you traded in a car that you hadn't paid off, confirm that the dealer is footing that bill, "or risk making payments on both your new and old cars." Also make sure the dealer has filed the title paperwork.
Related reading:
Ford pays for its prudence
Car dealerships the new endangered species?
The 65-mpg car Ford won't sell in the U.S.
Detroit's woes to inflate car insurance rates
