| The automobile industry has been plummeting, which | | | | recovery is noted in the industry, the only dealerships |
| directly relates to the falling economy, and the | | | | that stand to come back around are those that sell |
| governments bailout of the auto trade. This results in | | | | used vehicles. Consumers are no longer willing to risk |
| dealerships all across the country closing their doors on | | | | financing a purchase, especially one with such |
| their businesses. | | | | depreciation. These same consumers are also |
| In November 2008, statistics showed that 1 in 30 new | | | | clenching their pockets, and are only looking for what is |
| car dealerships would cease selling with forecasts | | | | needed. |
| showing 1,000 to close in 2009. The country has 21,000 | | | | When dealers are not making money, they cut corners |
| new car dealerships that have not shown a profit | | | | with financing. New advertising shows extended loan |
| since 2006. These failures are due to high gas prices | | | | periods with lower interest in an attempt to attract |
| and falling home values. With Americans holding onto | | | | buyers. Dealers are also encouraging their salespeople |
| any money they earn, car purchases are stalled. | | | | to extend vehicle servicing sales, while that market is |
| Reports show that the number of auto loans that | | | | not declining. Owners still need to have their vehicle |
| were more than 30 days late has doubled since 2004. | | | | serviced and repaired, and this money accounts for |
| This startling statistic, shows that consumers are | | | | 40% of a dealership's revenue. |
| unable to pay their bills on time, and or that they are | | | | Although the auto industry bailout helps, forecasters |
| using their car payment to pay for other bills, such as | | | | feel that the market will improve for car dealerships |
| their mortgage. | | | | gradually but not anytime soon. The housing market |
| Dealerships that sell vehicles made by Chrysler, Ford | | | | has to improve first before consumers loosen the grip |
| and GM are suffering the most since the auto industry | | | | on their finances. Dealers still continue to advertise |
| bailout was approved in 2008. The profits that these | | | | hefty rebates and softer credit requirements to get |
| companies once enjoyed are down and their factories | | | | consumers in the door. It's clearly a rough time for car |
| are faced with layoffs and reduced pay rates. Once | | | | dealerships. |