Credit Crunch Hurting Car Dealerships Across AmericaPosted: Updated:
Across the nation thousands of car dealerships are facing hard times as auto sales have dropped due to the credit crunch. Several different local car dealerships say sales are up and others say they are down.
Different areas of the country have been hit harder. It's predicted that 600 American dealerships could close by 2009, that's a 40 percent increase from last year.
The credit crunch is just one more player in the already slumping U.S. auto sales market, gas prices and production costs were enough to keep salesmen from sleeping at night.
"A lot of markets have it pretty tough because they don't have the same kind of lending sources we do," said Scott Hunter, Finance Director, McCurley's Integrity Dealerships.
Credit sources like GESA and HAPO have kept loans readily available for car dealerships in the Tri-Cities.
"The Tri-Cities didn't really participate, we didn't have the boom so consequently we don't have the bust," said Bill McCurley, Owner, McCurley's Integrity Dealerships.
The crisis nationally is causing some car manufactures to offer zero percent financing promotions and great programs like employee pricing.
"We get the benefit of all the deals and the good economy," said McCurley.
McCurley opened his car dealership in 1981, when the prime rate was more than 21 percent, now it's at five percent. He says people forget that our country has endured tougher times before.
In the eighties there was some good years and there was some good times and also in the nineties. It's normal for guys like me that have been in business a long time. These are normal business cycles," said McCurley.
McCurley's sales are up nine percent from last year, but other dealerships KNDU say their sales are not doing so well. As new cars sit on the lots, the interest costs keep adding up, and that's what hurts dealerships the most.