Many Chrysler dealers are told to “Get out of Dodge”

By Dennis Bandy

Chrysler is forcing many Dodge dealerships to discontinue carrying new Chrysler products. This comes with the reorganization required for chapter 11 filings and it’s deal that’s in the works with Fiat. The move is to reduce the total number of dealerships hopefully increasing the strength of the ones remaining.

Carmax, the largest used car network in the United States is sure to have much more competition in the used car market very soon. The reason is many dealerships that are forced out of selling new Chrysler’s are opting not to pursue selling another line of new cars, instead they are focusing on selling used cars. The option of selling used cars makes the most sense for many dealerships in the current market environment.

Reasons new car dealers may convert to used car sales.

  • No dealer franchise fees.
  • Consumers are more open to purchasing “used” vehicles with the current economic conditions.
  • Many dealers already have a steady flow of customers, especially for service repairs.
  • There is a higher mark up on used cars compared to new car sales.
  • No fear of their business being taken away again due to instability of a parent corporation.

Chrysler’s association with Mercedes in the past helped the image of Chrysler. Fiat on the other hand may possibly tarnish the image of Chrysler in my opinion. The wealthy certainly won’t be running out to purchase a new Chrysler 300 if it looks like a Fiat. Who knows, the dealers that are forced to “Get out of Dodge” may have received a blessing in disguise.