Car Dealership Closings: Good Deals for You?
By: Bobbi Dempsey

Chrysler and General Motors recently announced they're ending their contracts with thousands of dealerships. That's bad news for car dealers, but it could be a real opportunity for people looking for a good deal on a new car.

Chrysler has told the dealerships it will not be able to buy back their inventory. For those dealerships with too many vehicles, one option is to try and sell their inventory to another dealership not on Chrysler’s closure list. Barring that, the dealerships—many of whom are still reeling from the announcement—are scrambling to sell these vehicles for whatever they can get for them.

The dealerships will be closing, or at least no longer handling Chrysler vehicles, as of June 9, so you have to act fast to get in on the deals. The savings can be significant.

Dealers’ Loss Is Consumers’ Gain
“I’ve cut pricing on all of the new inventory,” says Mark Medinger, president of Savannah Dodge in Savannah, Ga. “All of these vehicles must be sold by June 9, unless an appeal is in process. Right now, dealers that aren’t in appeal are probably the most motivated salesmen you will ever find.” Although Medinger plans to file an appeal, he is still slashing his prices, just in case. “My cars are thousands of dollars under what other [non-closing] Dodge dealers are. And it’s not like I just picked a few to mark down. Every car on the lot has a price cut.”

As for his own future, Medinger, who still seemed shell-shocked from the news, hasn’t had a chance to think about a long-term plan. As the only Dodge dealership in Savannah, he felt pretty secure, especially since his sales have been rising for the past two years. In the short term, he’s hopeful he can keep going for at least a few months while the appeal process is underway.

While not out and out steals, you might be able to save thousands. According to a report in the Wall Street Journal, Chevrolet's 2009 Tahoe hybrid is selling in some places for $6,700 off a $51,405 sticker price (Stock Quote: GM).

Buying a new car now can also mean significant tax savings, as reported in MainStreet's tax column, the Daily Deduction.

Car buyers thinking of snapping up one of these deals won’t need to worry that they’ll be stuck with repair bills after the sale. “The warranty will still be upheld by any other Chrysler dealer that remains open, so that won’t be a problem,” Medinger says.

How to Find the Deals
You can find out which Chrysler dealers are slated to close by checking out the list here. The Huffington Post is compiling an unofficial partial list of GM closings, because the company has not released an official list. Keep in mind, though, that prices can vary widely even from one targeted dealer to another. Also, dealers who plan to appeal, or who are simply still in shock from the sudden news, may not have slashed prices substantially just yet, so keep watching.

A note of caution: Just because a dealership is clearing out its inventory doesn't mean the prices will be anything special. As we saw earlier this year when Circuit City and other stores closed, liquidation sales rarely live up to the hype. So before you buy a car, make sure you do your research and check out other prices in the area and online.

—For more ways to save, spend, invest and borrow, visit MainStreet.com.

Sign Up Now for Our FREE Newsletter
Search for Rates

US Rate Map - National Auto Loan Rates

 
Roll over states to see best rates.
 
Lower Rates Higher Rates

This illustration shows rates based on all terms and locations of a particular state. Products may not be offered by all institutions. Individual institutions determine the availability and required qualifications of their products. Product restrictions may apply.

Calculators

Calculator Access our Savings, Mortgage, Auto Loan and Personal Finance Tools here.