Nov 18, 2008 5:48 pm US/Central
Auto Bailout Or Not, Too Late For Some Dealerships
INVER GROVE HEIGHTS, Minn. (WCCO) ―
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There are dealer discounts and special financing; all part of the package happening now at Whittaker Lincoln-Mercury-Suzuki in Inver Grove Heights. It's a sign of these troubled times.
CBS
Nationwide, 590 new-car dealerships have closed so far this year, according to the National Automobile Dealer Association. Minnesota car makers are also feeling the financial pinch.
On Tuesday, Treasury Secretary Henry Paulson said the big three automakers are on their own when it comes to getting bailed out of their financial mess. He is opposed to dipping into the government's $700 billion financial bailout fund for a $25 billion rescue package for the automakers, no matter how much they need the help.
At car dealerships in Minnesota, there is no shortage of deals but people aren't buying like they used to.
"Ford has come up with some really great programs," said car dealership owner Chuck Whitaker. "On some cars, we've got discounts of $14,000 from the manufacturer."
There are dealer discounts and special financing; all part of the package happening now at Whittaker Lincoln-Mercury-Suzuki in Inver Grove Heights. It's a sign of these troubled times.
"We've just been in a tough car market for about 18 months," Whitaker said.
Times are so tough that at this dealership that new-car sales are down 15 percent and used-car sales are down a whopping 35 percent. That is now forcing Whitaker to sell his dealership.
"One time, we were up to about 50 to 60 employees, pretty good-sized company, selling a couple hundred cars a month. Now we're doing about half that," he said.
In fact, Whitaker is one of 60 dealers in Minnesota to close the last five years, according to the Minnesota Automobile Dealers Association.
A spokesperson for the group believes more dealerships will close throughout the state because sales are down drastically, about 30 to 40 percent since this time last year.
Declining sales means serious deals of the consumer.
"You know, it's a great time to be buying a car," said Whitaker.
He's got to sell 200 cars in the next few weeks, before he closes his store. And now, he's ready to deal.
"Everybody's got deals out there, and these are the biggest deals we've ever seen," Whitaker said.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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