So, this guy thinks he fixed the problem right?...wrong. As Chrysler/Jeep/Dodge master certified technician, I can attest that this situation is not that cut and dry afterall.
No, Dealer can do business without a contract with the FACTORY. If the factory/manufacturer do not want to renew the contract, no law can reverse that!
Further more the notion that the Dealers finance themselves is utterly ridiculous!Unless you are a very well capitalized Dealer, which I doubt it!
The way the Dealer system works is thru "flooring" a system whereby a third party finances your purchase of vehicle(i.e. banks, and/or the factory)They are buying the vehicles to sit on your lot and collecting flooring money(xyz amount a day).When the vehicle is sold the flooring will be added to the final selling price.
It is also known that the factory paid the lease/mortgage/rent of the dealer's property, not to mention a host of other goodies slipped under the warranty claims for vehicles way out of warranty.
To me this bit of feel good BS of government intervention is going to hurt the factory/dealer relationship, by making the manufacturer more rigid in it's decisions.
To make it simple, the manufacturer can go and nullify the dealer's contract when due for renewal!
The way the Dealer system works is thru "flooring" a system whereby a third party finances your purchase of vehicle(i.e. banks, and/or the factory)They are buying the vehicles to sit on your lot and collecting flooring money(xyz amount a day).When the vehicle is sold the flooring will be added to the final selling price.
OK, as I understand what you are saying is the dealer is buying his inventory on short term credit from Ford, Chrysler or GM. Financing is either from financing arms of the manufacturer or a bank.
When the car is sold the loan is repaid with interest.
The issue of the dealer defrauding the manufacturer on warranty work aside, I do not see where your argument that the dealers are not standing or falling on their own efforts holds water.
If the manufacturer is loaning the money to the dealer and making a profit on the loan I do not see how that is an additional cost of doing business with a given dealer.
Here in my area several very large and profitable dealers had their dealerships closed by the bankruptcies. These dealers moved a lot of cars for GM and Chrysler. Closing them did not from my point of view make sense.