Great article I love this part;
“Can you guys send me this policy, so I can see all this in writing and I can get back to you?” I asked.
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“We don’t actually send out any paperwork without receiving a down payment,” Corey explained. He said once I paid, the policy would be mailed to me within seven to 10 business days.
Needless to say, I did not buy anything. Instead, I called back and identified myself as a reporter, but no one would talk to me.
I also saw a "People's Court" where somebody bought an extended warranty when they bought a used car and when they went to make a legitimate claim they found out the warranty company had gone out of business. The company was in no way affiliated with the dealer except for the dealer offering it. To their credit the dealer covered their repair anyway. Obviously the person still bitched or there wouldn't have been a case.
From the article;
This is great news for automakers- however, for dealers that rely on the revenue generated by dealer reserve accounts it poses a threat to already wafer-thin profit margins.
My sister works for a dealership that was a Chrysler dealer up til about a year ago. The owner decided to switch to Kia and emptied his dealer reserve account. He's looking really good since Pennsylvania has the highest number of Chrysler dealerships being closed down.
According to my sister the profits on new cars is razor thin. Dealerships make most of their money from the service departments.