CarSeekBlog

In a report that appeared on Automotive News, Mike Jackson, the CEO of AutoNation Inc., said that the closing of 2,300 General Motors and Chrysler dealerships in the next 18 months will effect the sticker prices consumers confront when hitting the car lots, with “pressure on liquidating inventory, pressure on pricing, pressure on automotive real estate.”

(Uh, excuse me, but it begs saying. Duh?)

Six of AutoNation’s GM dealerships were among the 1,124 slated for closure and Jackson said, “It’s going to be an exceptional time for consumers,” but that the situation will further depress the commercial real estate market in the United States, which is already 20% behind its 2008 levels. “It could have an impact on commercial real estate,” said Jackson. “This is single-purpose real estate that has to change use now. So there will be a lot of that coming at one time.”

That’s pretty much how this recession seems to be going. We get improvement in one area while harming another. But what about all that vehicular inventory?

Chrysler has already said that it cannot afford to buy back the 40,000 vehicles sitting on dealers’ lots and those dealers have just a few weeks to get rid of those Chryslers, Dodges, and Jeeps. After June 9, the dealers can’t sell the cars because they’ll no longer be affiliated with the company. At that point, Chrysler will “redistribute” remaining inventory. The dealers are going to lose money, and now the question is how much? The more inventory they can move in the next three weeks, the more they can blunt the coming blow. (GM dealerships have more time at the present, but that could change.)

So, given the situation, is it a good time to buy? Probably, but every consumer has to weigh their individual financial situation and degree of need. One of the best pieces I’ve seen examining the issues is, “How Owners of Chrysler, GM Vehicles Could Be Affected” by Martin Zimmerman from the Los Angeles Times reprinted in the Baltimore Sun. The piece looks at manufacturer warranties, unpaid liens on trade-ins, vehicle repair history, financing, sales perks, and buying a car from a dealer going out of business. Read up, weigh your options, and remember — for Chryslers, at least — you have three weeks to make a decision.

Filed under: Buying Trends, Chrysler, GM by Shorty