As part of Chrysler’s Chapter 11 bankruptcy, the company is severing its relationship with 25% of its dealership network, many of which will close. And Chrysler won't buy back its inventory. Now 789 dealerships have less than one week to sell whatever might be left of the 44,000 vehicles at those dealerships less than one month ago.
Buyers are seeing significant discounts right now across the entire automotive industry. Some of the steepest are likely on Chryslers, Dodges and Jeeps at closing dealerships.
"There are a few dealerships that are offering fire sale kind of prices: $5,000 and $10,000 off MSRP prices,” says Jack Nerad, executive editorial director and executive analyst at Kelley Blue Book.
“I’ve heard of discounts up to 40%,” adds George Magliano, the director of Automotive Research North America at Global Insight. “The deals are out there and the deals are good.”
But before you go running to your nearest doomed dealership, here's what you should know:
1. Not all dealers are desperate.
Though Chryslers from closing dealerships are going at very significant discounts, be aware that not all dealers are cornered.
“Much of the dealer stock is being absorbed by ongoing dealers at dealer-invoice pricing, or what they would buy them from the factory for,” says Nerad. That means some dealers "may not be as desperate to unload their inventory at clearance pricing."
Jeff Schuster, executive director of forecasting with JD Power & Associates concurs: “There’s a lot of news of these fire sales but these aren’t affecting every dealership or even every dealership that’s closing.”
2. Do your homework.
If you’re in the market for a new car given the economic climate, are you dead set on a Chrysler? Shop around, says Magliano. "Without doing your research you won't know how good a deal you're getting.”
If you are decided on a Chrysler, research Chrysler models you’re interested in and get professional reviews on them using resources such as Edmunds.com and Consumer Reports. Look up your local closing dealerships (check out the list here) and call ahead to find out what they’ve got in stock and what deals and incentives they’re offering. Get quotes from the dealers, and from other sources such as Kelley Blue Book.
3. Haggle appropriately.
Though the salesman might only have a few days left to get rid of his inventory, don’t come offering $12 for a new model Chrysler. Know what you’re buying, get quotes beforehand and be reasonable.
“We’re getting people in here offering $15,000 for a $35,000 car and it’s insulting," says a 10-year veteran salesperson at ABC Motors in Valley Stream, N.Y.
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