Did you recently take on (or consider) a loan of 84 months or longer on a car purchase?
A reporter would like to speak with you about your experience; please reach out to PR@Edmunds.com by 7/22 for details.
A reporter would like to speak with you about your experience; please reach out to PR@Edmunds.com by 7/22 for details.
Options
Comments
I think you are right. Like I said it isn't likely to save many jobs at dealerships or service departments. I used to be in transportation and distribution and had a fleet of 12 trucks and three five forklifts. I happened to visit with one of the men I contracted with to do our forklift servicing and he said companies are not servicing their equipment because of decreased budgets. He expects to get laid off any day now. I guess it is pretty much the same all over San Bernardino county.
I was talking to my wife today about what we might do if the 4 banger ever fails smog and we agree we keep the Tahoe and get a EV for around town. I have been researching GEMs on line and I can get a used one pretty reasonably. If we have to go more than 40 miles in a day we can take the SUV. It is way more comfortable on the freeway anyway. At this point the Pontiac is sitting in the driveway where I would park the EV and it still runs well so I have to reason to ditch it.
It will be the sixth in the region to close this year, according to this article:
http://www.mercurynews.com/ci_11273906?nclick_check=1
Of particular note is this
Many may think that's not a California problem. Fremont's NUMMI Toyota and Pontiac plant — which already has announced a production slowdown — is the state's only auto factory. But California has 190,000 auto-related jobs, more than any state other than Michigan, according to the Center for Automotive Research in Ann Arbor, Mich.
Some of those jobs involve making computer chips and other electronic and mechanical components that end up in cars. But the bulk are linked to the state's 1,594 car dealerships.
Last year, those dealerships sold nearly 2 million new cars and trucks for a total of $82 billion, which the California New Car Dealers Association says was about 20 percent of the state's retail sales. The payrolls of those dealerships totaled $18 billion, and they paid $8 billion in taxes, according to the association.
More than 900 dealerships, including 121 in California, already have closed their doors this year.
Five dealerships have closed in the county this year, and others are almost certain to follow in coming months, costing more jobs and tax revenue. A new-car dealership in California typically employs 84 people and has an annual payroll of $4.6 million, according to the National Automobile Dealers Association.
Of course, the problem is especially acute for domestic brand dealers:
Sales by domestic-brand automakers amount to just 18 percent of car-and-truck registrations in Santa Clara County, while nationally they represent 48 percent. Still, the county has 13 dealers selling GM's domestic brands; four selling Chrysler, Dodge and Jeep vehicles; and six selling Fords, Lincolns and Mercurys.
What a contrast: Only 29 Chryslers and 31 Jeeps each month were registered locally in the six months from May to October, according to the Silicon Valley Automobile Dealers Association. Toyota, long the bestselling brand locally, sold 1,289 cars and trucks per month during the same six-month period, but even its sales were down 21 percent.
But even import dealers are impacted, especially if they have recently upgraded or expanded - Toyota has been promoting that the last couple of years, as it wants to keep a cap on the number of total dealers so that each dealer gets lots of sales volume, making each one stronger. Here's one that's feeling the pinch:
At Piercey Toyota in Milpitas, which opened a huge new showroom on 10 acres east of Interstate 880 late last year, the impact didn't hit until October. But when it hit, it hit hard. Piercey has had to trim its 180-member staff by 50 people.
"It's been a struggle," said Art Wicker, the dealership's president and a 40-year auto-industry veteran.
Wicker hopes things will improve by summer.
I get the feeling that things are going to get worse before they get better.....
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
GM is targeting a 25% reduction in the number of its dealers by 2012, but that will still be more than double the number of Toyota dealers, just to compare an automaker of comparable annual sales volume. I could EASILY see these GM dealerships being repo'ed and closed up as part of a behind-the-scenes plan at GM.
PS this really sucks: Eckenhoff, who leases the land here, said he was working on a deal to save his franchise. Meanwhile, he hopes GM agrees to buy back from GMAC his new cars for the same price he paid. He also hopes GMAC gets good prices at auction for his used cars.
If GMAC gets less than what Eckenhoff paid, he will owe GMAC hundreds of thousands of dollars - if not more
Poor guy, it's like when your car is repo'ed, only multiplied by 50 or 100! :-(
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Won't they just sell them to a different dealer? They can still be sold as new, just like any car fresh from the factory.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Well, that worked in the old days when the margins were a lot better for each dealer, and the roads were crappier so driving 25 miles to get a better deal wasn't a realistic option. These days the margins are a lot lower so dealers have to move more product to compensate, which drives them into ruinous competition with each other.
When Mercedes dealers get this desperate, how bad must it be for the Ford and GM dealers?
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
I don't do trade-ins. I will put it on Craigslist and I will get what I want or keep it. I think if gas stays cheap another couple months people will buy it. Still the best vehicle Toyota ever built. Ask what the sales managers of most Toyota stores buy. The Sequoia is Number One choice. The 2007 was so much better looking than the 2008. I look at Auto Trader and they are rare in 4X4 Limited. The few listed by dealers are priced over what I paid new. Most have more miles than mine also. I have not passed 8000 miles yet.
Even getting a great deal on a Mercedes I would have to keep it. I don't think it will hold its value like a Toyota.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Leasing or trading in every three years is like renting an apartment. Sure you have a nice place to live but it is never "yours".
What is good about things right now is you can get a very nice used car at a discount that will make many of us drool. People bought over their head with their cars much like some did with their houses and I see almost new cars being sold every day. Things got so inflated that people stopped thinking about ever paying off their house or their car. Now that thinking has come home to roost.
One Small Town Dealership Feels the Pinch but Sees Hope in the Future
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
"Used car sales were down only 8 percent compared to 2007, and Certified Pre-Owned (CPO) sales were flat. During the same period, new car sales fell by more than 16 percent.
"During the downturn in the economy, many car shoppers hunted for bargains in the used car lot," observed Edmunds.com Analyst Joe Spina." link
They do have other info of interest: Idaho Auto Auction
franchise. Dealmaker auto group aka Seaway Chev./Buick in northern NY is in default with GMAC.
http://www.newzjunky.com/court/1224dealmaker.htm
A few months ago they closed their Ford store in suburban Syracuse NY.
Funny that all the used cars are gone but the lot is loaded with new Ford
cars and trucks as well as a KR and Cobra stangs buried in the snow
out front. This is the 6th Ford dealer to either go broke or take a buyout
from Ford in the Syracuse area.
http://www.syracuse.com/business/index.ssf?/base/business-14/122605180193340.xml- - &coll=1
A local longtime (1948) single prop. family Linc/Merc. dealer in another upscale
Syr. burb. of Manlius took a FoMoCo buy out and sold their prime location
for a strip mall/drug store instead of building a new building/service dept.
http://www.encyclopedia.com/doc/1G1-187744842.html
Funny that all the used cars are gone but the lot is loaded with new Ford
cars and trucks as well as a KR and Cobra stangs buried in the snow
out front
Maybe Ford is in no big hurry to take them back. I think they already have too many vehicles on hand!
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
San Rafael Ford dealership closes without warning
Keli Gaffney pulled into the parking lot at Ford of Marin Friday afternoon and nearly smashed her pickup truck into its metal gates.
"I was supposed to be here at 2:15 to have my windshield repaired," said Gaffney, who had purchased her vehicle from the San Rafael dealership two weeks earlier. "And then today I find out they're out of business."
A sign on the doorway of the West Francisco Boulevard dealership declared, "Ford of Marin has temporarily closed. If your vehicle is in our possession, we will complete the work and contact you when it can be picked up." The few employees remaining in the parking lot declined to provide an explanation for the abrupt closure.
"Read the sign," one employee growled, closing the dealership's gates.
So I guess at least one person had contracted for work on a car she purchased, and they went out of business before completing it. This is a dealership that had been through several hands in the last decade, so I guess it's not that surprising that it finally went under completely in the current business atmosphere. It was no relocation though: today we are down to one Ford dealership in the county, the Novato dealership mentioned in the article. This one recently expanded to include a full remodelling and to add the Mercury and Lincoln brands, so maybe they are on a solid footing.
http://www.marinij.com/ci_10691088
On a separate note, I heard unconfirmed rumors yesterday that the Toyota dealership in my town may be about to fold. In the worst possible coincidence of timing, they bought up a neighboring Buick dealership early this year that was closing, and expanded into their space. Now sales are dead, and they have laid off half their sales force. It is noticeably quiet when I go over there for service...the service department, however, appears to be thriving just as it always was.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
"What I meant was that all cars spend a little time sitting there, so ones like the Prius, which is still selling well, would still spend a few days there. Of course I didn't mean to imply that the thrust of the article was wrong - some cars are spending months sitting there. But even now Toyota dealers don't have big stocks of Corollas, Yarises, and Priuses. They just finally have a few to sell, after a summer of having none of any of those models. "
Ok , don't let facts get in the way. Honda's sales abysmal for 4th quarter 2008. Toyota's sales down 37%, Ford down 32% . For the Corolla and Yaris, sales are up but no comment on the Prius . Overall for Toyota, sales doth suck. Rather like a flipper you bought in Compton, you don't want to go there . T-2 months till California goes bankrupt.
NO, Not California. We got a $90 billion High Speed Railroad to Nowhere just voted in by the unwashed masses. Maybe Obama will send us a check to get going on that project.
And CalTrans apparently has a half billion dollars worth of projects ready to go as soon as Obama cuts the check out of his little New Deal thing. Obama is also talking about cutting checks to the states that are in danger of bankruptcy, as part of his economic plan, so never fear! :-P
None of this will help dealers who are going to fail in the next three months though. The trickle-down from the economic recovery plan, if there is any, will take too long to trickle that far down.
duke: are you responding to something I wrote a month and a half ago?
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Most projections I have read believe it will be upwards of $90 billion. And yes those are all NOWHERE in my book. Especially SF that is due to chip off into the ocean any day now. :shades:
San Diego does not seem to be as devastated by the downturn.
San Diego car dealers are experiencing their worst downturn in 30 years or longer.
New car and truck sales in the county in 2008 will be 17 percent lower than last year, according to a report released this week by the San Diego New Car Dealers Association. Sales have dropped 33 percent since the peak of the market in 2004.
Some auto dealers see parallels between today's market and the 1970s, when the industry was hit by oil shocks, stagflation, sky-high interest rates and a sharp shift in consumer preferences favoring fuel-efficient vehicles instead of the luxury-sized “boats” that made up the bulk of the market.
“We've been in business for 60 years and we've had some tough times – especially during the energy crises in the 1970s, when interest rates were getting close to 21 percent,” said Tony McCune, who owns McCune Chrysler Dodge Jeep in National City and Chula Vista. “Those were horrible days and we pulled through, so we'll pull through this one. We just have to battle through the crisis.”
New owners at my Toyota dealer, no closings that I can find. San Diego is more conservative than the rest of the state. Though we have had our share of foreclosures.
We Appreciated Your Business Over the Many Years
Dear Valued Client,
This email is to inform you that due to current business conditions, Sheehy Chevrolet will be closing it's doors February 2nd. In the meantime, Sheehy must clear it's lot of all remaining Chevrolets and have priced new vehicles up to 50% off the original MSRP!
Sheehy will still provide you with the same quality of financing you've come to know over the years. All factory warranties will be honored at any other Chevrolet dealership.
Please contact me if you have questions regarding warranties, financing, units for sale, or anything else regarding the store closing. Please contact me as soon as possible.
Respectfully,
Mike Nikolich
General Manager
This particular dealership sold Dodges, Chevies, and Isuzus back when I bought my Intrepid. Isuzu went away soon after. For some reason, it seemed like the Dodge side of the business kept expanding, while Chevy was shrinking.
I wonder how much longer the Dodge showroom will be open?
Now, will there still BE a Dodge brand for them to sell in two years? If so, which I think is legitimately in doubt, it will probably be a VERY different lineup of vehicles (sourced from VERY different places!) than it is today.
In my extremely informal straw poll, it seems to me that Chevy dealers are suffering the most, although Buick-Pontiac-GMC dealers are not far behind. I think that's because of the squeeze GMAC has been putting on them for a few months now.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
:-(
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
It's a hard business to be in these days:
Hard times have dealers crying: Cut!
As vehicle sales and dealership profitability remain depressed, dealers say they are trimming every expense that doesn't directly generate income. From employee health insurance to showroom thermostat settings to season tickets to the local NFL team's games, they insist, nothing is off limits.
I am of two minds here - some of the things mentioned being cut (like season sports tickets and company boxes) are pure luxuries, others like employee health insurance are not:
Belt-tightening 101
These are some of the ways dealers say they are cutting costs.
• Reducing or eliminating their own salaries and those of other top managers
• Deferring maintenance and capital improvements
• Shortening operating hours
• Requiring employees to pay a larger share of health insurance costs
• Eliminating the company match for employee 401(k) retirement plans
• Reducing spending on employee training, uniforms, company cars and travel
• Assigning employees to do work formerly done by outside contractors, such as janitorial and lawn care services
• Suspending charitable contributions
• Combining central office functions of several dealerships
http://www.autonews.com/article/20090126/ANA06/901260373/1114
(registration link)
It also mentions some dealers buying only quick-turning new models for their lots, rather than ones that might take longer. Of course, the manufacturers are taking widely varying stances with response to that type of system right now. While Ford and Chrysler are taking the attitude that they can be patient until things turn around, GM is pushing dealers out of business at an increased rate. It will now begin penalizing them more (via GMAC) for older new cars that have been on their lot for a long period of time.
If I were thinking of opening a business today, this wouldn't be the type. :-(
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Wow. Apparently NONE of the marques could save the dealer. Local news reports says that the dealer owed $12 million in loans to GMAC. 200 jobs were lost. At least the GMC service department in Federalsburg will operate, for now.
Ref: "http://www.baltimoresun.com/news/local/easternshore/bal-dealerships0213,0,56043- 16.story".
330 vehicles were confiscated. Who's going to buy them?
They will become part of the liquidation when GM finally files for bankruptcy. Buying a GM car now is sooooo risky. Unless you pay next to nothing and hope to be able to find parts in 5 years. If GM folds the only parts will be aftermarket. And they will be scarce. We have lost many jobs here at local dealerships. Most are like ghost towns when you go in.
they just moved to a new location about 2 years ago.
my mother just bought new tires for her car there last week!
CONCORD — The day his employees were laid off, two days before New Year's Eve, Darrell Cooper went home and told his wife it was the worst day of his life.
.....In all his 23 years working at Diablo, Cooper has had to fire only a couple people. As a group, the employees had a softball team, had barbecues and sometimes bowled together. He even thought about buying the dealership, keeping everyone together, but the bank wouldn't give him a loan in this tight credit environment.
Some of the 40-plus people laid off Dec. 29 have found other jobs, but some of the service folks who worked with Cooper have said their new environments are a little cold.
......When the dealership closes for good Feb. 28, Cooper and Serrano — along with about eight others in the building — will be gone, too. Until then, they will sort equipment, deciding what will go back to Audi and what will be auctioned off.
Diablo Lincoln-Mercury has operated in Concord for 30 years and has been at its current spot on Market Street's auto row since 1991. Before it was Diablo, it was called Jefferson Motors.
Lexus, which operates a dealership on the 2-acre site next door, bought the Diablo Lincoln property and will expand its business into the Diablo building and lot.
.....Schniegenberg (the general manager), 31, has a 14-month-old baby and his wife stays at home. He's been at the dealership since he was 22.
"There's just nothing out there," he said. "There are some guys here who have been in the auto business for 35 years and it's all they know and looking for something else is so hard for them.
"I'll try to stay in the field, but it'll probably have to be out of state," he said, with a tone of resignation. He and his wife own a house in Walnut Creek, but if they sell now, they'll have to take a loss — if they can even sell it, that is.
"I'm getting to the point where I'm like, 'You know what? I don't care anymore.' We tried to refinance, but we were told we couldn't because we've made our payments on time so we can't modify it. We've done everything — we've written congressmen, everything. No one cares.
"You go from being shocked to dismay, then anger," Schniegenberg added. "Then you get anxious and scared. For a lot of us, this was our whole life."
http://www.contracostatimes.com/antioch/ci_11648435
Dealers should have had received some help from the bailout too - they were the only part of the automotive supply chain that got no help at all, and they are all small to medium size businesses, unlike many of the big suppliers claiming big trouble now, and VERY unlike the automakers themselves. :-(
And these manufacturers continue to have to absorb all these returned vehicles.....
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
That is what I have tried to emphasize on the UAW thread. The UAW holding onto their fancy lifestyle has already caused 1000s of people in the dealerships to lose jobs. Most of those jobs do not pay as much as a UAW job pays. The reality when the smoke clears there could be 50% less dealerships in the USA. I guess that is what the D3 and especially GM was hoping for. If the dealership closes they do not have to buy them out.
But I think the priorities are all screwed up that we give (calling it a loan is a bad joke) $17 billion to these companies, just so they can go broke later in the year instead of earlier, and we give nothing to dealerships which are small businesses employing tens of thousands of people all across the country. The dealers and suppliers should have been the recipients of government financial support in some form, not the automakers. Now we are contemplating throwing away another $30 billion (and that's just in the near term) on these automakers, and still the dealerships will get the shaft, and I'm convinced that for the automakers themselves it's just postponing the inevitable anyway.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)