D-Day: 10 Black Chrysler Dealers to Lose Stores, Consumers Win in the End

On June 9, Chrysler will have 10 fewer black dealers selling its vehicles. According to our reliable industry sources, 9 men and 1 woman will be officially out of business, leaving 37 in business after the dust settles: 2 females and 35 males. While Chrysler plans to eliminate 789 dealers over the next month, both the minority and black dealer population for the automaker will still maintain the same market share prior to the cuts, 5 percent and 1.5 percent respectively. Obviously Chrysler executives put a lot of thought into its dealer hit list before making the announcement - avoiding any potentional headaches with the civil rights community and other minority dealer advocates over having acceptable representation. Many critics were expecting Chrysler - since they're currently privately-owned - to slice more minority dealers.

For consumers, this restructuring means that the dealers on Chrysler's targeted list must clear out their new-car and parts inventory by the June 9 deadline in order to take advantage of any factory rebates and incentives. Thus, consumers should be able to work some good deals over the next few weeks as those dealers become desperate to eliminate their inventory.

After the deadline, the targeted dealers will no longer be apart of the Chrysler franchise system. What does this mean to you? It means any new vehicles remaining in inventory will not qualify for any factory incentives. Also unless you're paying cash for one of Chrysler's new vehicles, while the company is in bankruptcy, you may find you'll have to cough up a larger down-payment to secure financing from some of the major financial institutions - since the residual values have dropped and auto loan delinquencies are at an all-time high, according to the American Bankers Association. In fact, over 3.53 percent of new-car loans in the last quarter of 2008 were late 30 days or more, as compared to 1.35 percent of new-car loans in the last quarter of 2004.

And across the street at GM, the bankruptcy word continues to loom. Just like Chrysler, GM is also eliminating dealers - roughly 1,200 over the next 18 months. Unlike Chrysler's dealers, GM will have more time to wind down their business as long as the company can avoid bankruptcy. However, if GM is forced into bankruptcy like Chrysler, they will face a similar accelerated path of eliminating dealers. As of now, we haven't been able to determine how many minority dealers are on GM hit list.

Although we hate to see any dealer close shop, these tough economic times will cause the remaining dealers to increase their level of customer service in order to stay in the game. Thus, this means that consumers are back in the driver's seat again - getting good deals and improved customer service!