The shaky economic situation facing domestic automakers has prompted many consumers to ask what would happen if their car dealership goes out of business. In the short run, it may be difficult to get warranty service locally if a dealer closes, and in the long run it can limit your choices when you’re ready to buy a new vehicle.
Typically, dealerships do not offer their own financing; they typically partner with banks and lenders. So if the dealership goes out of business, your loan is still with the institution you signed up with. If a dealer does offer in-house financing, it’s important to read the fine print carefully so that you understand what happens if they fail to repay your debts. In these situations, the lender will usually send you a letter stating that your debt has been purchased and how to make payments.
Whether it’s due to the economy, bad sales or bankruptcy proceedings, some car dealerships are closing their doors. This can cause confusion and anxiety for those who just bought a car or haven’t paid off their loan yet. However, this can also affect car buyers in other ways. For example, if your local dealership is closing and you were promised a certain rebate or discount, it’s a good idea to look into alternative sources of financing in case the dealer fails to honor their promise. Also, if you used the spot delivery process, it’s a good idea to consider obtaining a bonded title to ensure your car is titled in your name.