Chrysler check bounced!

[cardude]

I remember posting a few weeks ago how relieved I was after terminating my Chrysler dealership before they went into BK. I also remember gloating a little bit after receiving a partial payment of $7300 for the parts return I did with Chrysler. I was feeling pretty smug. Someone on the board mentiond something about a "clawback" provision in a BK but I had the money already, so I wasn't worried!

Well, it's time to eat some crow now it seems. The $7300 check Chrysler wrote bounced a couple of days ago. Even though we did our termination way before the BK happened and deposited the check before the BK, it looks like I will have to wait in line with all the other suckers dealerships begging for their money. We got all our vehicles returned and paid for so that was a relief, but it looks like the total 14K they owe me for my parts return is going to to be a struggle.

I wish that they would have never written the check now because it is screwing up our bank account that we deposited it into.

I really feel bad for the existing Chrysler dealers. I got a letter from the law firm I was using describing the BK process and how Chrysler is going to terminate the dealers it doesn't want any more. Those dealers are in for a painful struggle through the BK courts it seems.

Here is the letter from the law firm if you are interested on how the dealers are going to get screwed:


chrysler letter from myers and fuller.pdf

[Dawg52]

Sorry for your bad luck. BK is a bitch. A company I worked for many years ago went into CH 11. It was no fun.

[Texas Proud]

Sorry to hear it bounced... but that is different than the claw back... in the letter they said it was 90 days for claw back... so even other payments you might have received is in danger...

[FinanceDude]

That's too bad. Chrysler will be a shell of its former self in 90 days........

[Westernskies]

Quote:

Originally Posted by FinanceDude That's too bad. Chrysler will be a shell of its former self in 90 days........

Fix It Again,Tony!

[FinanceDude]

Quote:

Originally Posted by Westernskies Fix It Again,Tony!

Fiat HAS to have improved quality in the past 30 years, right? Actually, Fiat killed Yugo, because they hated the competition for worst reliability.........

[randyman65]

"Fiat HAS to have improved quality in the past 30 years, right? Actually, Fiat killed Yugo, because they hated the competition for worst reliability........."

You do, of course, realize that the Yugo GV was built under license from Fiat. It was imported by Malcom Bricklin, and in a Time article about the 50 worst cars of all time, it was stated that he would not be satisfied until every American walked to work, and that the rear window defroster was there to keep your hands warm as you pushed the car.

[Bigritchie]

Cardude, what does all this mean for those of us that own Crystler products?

For instance I own a hemi 300c that I really really like, will it become harder to get parts for later down the road? Will I have to get another dealer to do work if it needs it?

[cardude]

Bigritchie,

I really don't know on the parts issue, but you may lose your local dealership if it is not deemed "viable" by the New Chrysler. Check out that letter from Myers and Fuller.

If Chrysler makes it out of BK then I would think the parts would still be available, but if they don't make it out and they liquidate then someone would have to buy the assets that makes the parts. Maybe an aftermarket parts manufacturer would buy the assets or something. Again, I have no clue.

[Sparky]

You know, I've worked in law firms for many years and have never seen a legal document detailing "lucky ones" and "good ones". Weird.

[FinanceDude]

Quote:

Originally Posted by Bigritchie Cardude, what does all this mean for those of us that own Crystler products? For instance I own a hemi 300c that I really really like, will it become harder to get parts for later down the road? Will I have to get another dealer to do work if it needs it?

When a car goes out of production, laws require that parts are available for 10 years after the last model year ceases production. I assume that Chrysler would still be stuck with that commitment, along with honoring their long term powertrain warranties and such.........

[Westernskies]

Here is a really simple solution to Chrysler's financial situation. Get Obama to buy their inventory, then sell it on eBay! At 271K per car, Chrysler would be the most profitable car company in the world and we would have a budget surplus in no time! There is room for everyone in this win-win new deal.

President Obama's Chrysler Gets $271,300 on Ebay



You might expect to pay about $14,000 for a 2005 Chrysler 300C with just under 21,000 miles, maybe even less in this economy, but there is one on Ebay that just fetched about 20 times that amount. With well over 100 bids, Barack Obama's Chrysler 300C sold for $271,300. As you can imagine this was no ordinary Ebay auction.
In just one day the auction page was viewed by 146,000 people, and over 8,000 people were officially watching it on Ebay. As I was writing this article, over 213,000 people had viewed the auction page, and when it was all over more than 276,000 people had seen it!
Now not just anyone could bid in this Ebay auction. No you didn't have to have a Secret Service clearance, but you did have to be pre-approved to bid on Obama's former Chrysler. And in case you were wondering, Over 100 people were pre-approved to bid on Barack's 300C.
For all of your trouble and a whole heck of a lot of money, you will at least be receiving proof of the President's ownership via the title. You'll also be getting a fully loaded car with options like leather interior, navigation, power doors and locks, and a sunroof! Obama personally drove the light blue 300C with gray leather interior from 2004 to 2007.
The lucky winner thankfully will have some piece of mind in terms of manufacturer support on their new presidential passenger car. The 300C will be under warranty for another three years or about 30,000 more miles until the 7 year 50,000 mile warranty runs out, but I'm pretty sure that the new owner (known only by the Ebay community as s***z) will probably be charging admission to see it, and not using it as a grocery getter.
The seller of Obama's 300C definitely seemed to want to keep politics out of the sale, and bidders were asked to "please keep your political views, derogatory comments, and un-serious inquiries to yourself." This is America of course and everyone is entitled to their opinion, but the seller was trying to keep things "strictly business".
One comment posted on the Ebay auction page was from an unfortunate person who was familiar with the car. The person said, "just wanted to congratulate you. I test drove this car back in feb of last year at park plaza. It was a litte too pricey for me. I am definately kickin' myself now though. Congrats again." The nouveau riche seller replied, "Thanks for not purchasing it!" I don't think Obama will miss the car too much, or lament the fact that he could've sold it for a bit more, considering his new ride is just a tad bit more expensive!
So is $271,300 a fair price to pay for what is really a $14,000 car? Well if you have been watching auto auctions like the Barret-Jackson, you can certainly see that the market is strong for unique cars, especially if they were owned by celebrities or in this case, the current President of the United States. Hopefully the new owner of President Obama's Chrysler 300C won't regret the fact that he could've had the car that the 300C (especially the grill) is designed to look like, the Bentley Continental for about the same price!
~Ivan Katz, National Examiner

[FinanceDude]

Quote:

Originally Posted by Westernskies Here is a really simple solution to Chrysler's financial situation. Get Obama to buy their inventory, then sell it on eBay! At 271K per car, Chrysler would be the most profitable car company in the world and we would have a budget surplus in no time! There is room for everyone in this win-win new deal. President Obama's Chrysler Gets $271,300 on Ebay You might expect to pay about $14,000 for a 2005 Chrysler 300C with just under 21,000 miles, maybe even less in this economy, but there is one on Ebay that just fetched about 20 times that amount. With well over 100 bids, Barack Obama's Chrysler 300C sold for $271,300. As you can imagine this was no ordinary Ebay auction. In just one day the auction page was viewed by 146,000 people, and over 8,000 people were officially watching it on Ebay. As I was writing this article, over 213,000 people had viewed the auction page, and when it was all over more than 276,000 people had seen it! Now not just anyone could bid in this Ebay auction. No you didn't have to have a Secret Service clearance, but you did have to be pre-approved to bid on Obama's former Chrysler. And in case you were wondering, Over 100 people were pre-approved to bid on Barack's 300C. For all of your trouble and a whole heck of a lot of money, you will at least be receiving proof of the President's ownership via the title. You'll also be getting a fully loaded car with options like leather interior, navigation, power doors and locks, and a sunroof! Obama personally drove the light blue 300C with gray leather interior from 2004 to 2007. The lucky winner thankfully will have some piece of mind in terms of manufacturer support on their new presidential passenger car. The 300C will be under warranty for another three years or about 30,000 more miles until the 7 year 50,000 mile warranty runs out, but I'm pretty sure that the new owner (known only by the Ebay community as s***z) will probably be charging admission to see it, and not using it as a grocery getter. The seller of Obama's 300C definitely seemed to want to keep politics out of the sale, and bidders were asked to "please keep your political views, derogatory comments, and un-serious inquiries to yourself." This is America of course and everyone is entitled to their opinion, but the seller was trying to keep things "strictly business". One comment posted on the Ebay auction page was from an unfortunate person who was familiar with the car. The person said, "just wanted to congratulate you. I test drove this car back in feb of last year at park plaza. It was a litte too pricey for me. I am definately kickin' myself now though. Congrats again." The nouveau riche seller replied, "Thanks for not purchasing it!" I don't think Obama will miss the car too much, or lament the fact that he could've sold it for a bit more, considering his new ride is just a tad bit more expensive! So is $271,300 a fair price to pay for what is really a $14,000 car? Well if you have been watching auto auctions like the Barret-Jackson, you can certainly see that the market is strong for unique cars, especially if they were owned by celebrities or in this case, the current President of the United States. Hopefully the new owner of President Obama's Chrysler 300C won't regret the fact that he could've had the car that the 300C (especially the grill) is designed to look like, the Bentley Continental for about the same price! ~Ivan Katz, National Examiner

Does Obama get the money from the sale? Actually, pretty funny he owns such a gas guzzler when he's pushing for cap and trade on carbon emissions and the like........

[ERD50]

Quote:

Originally Posted by FinanceDude Does Obama get the money from the sale? Actually, pretty funny he owns such a gas guzzler when he's pushing for cap and trade on carbon emissions and the like........

And according to the articles, it was the HEMI engine in there, which depending on the model, gets 13 MPG or 15 MPG city.

Chrysler - 2009 Chrysler 300 - Performance - Powertrain

Oh boy. Double

-ERD50

[samclem]

Cardude,
What's the word on the street about how Chrysler decided which dealers got the axe? I'm hearing about a lot of rural dealers that are being shut down, but this doesn't make a lot of sense. It seems to me that the major "cost" to Chrysler of having a lot of dealers is that, if there are two many in a small area, they will bid against each other for the customer's business and lower the price for which the cars sell. Having a dealer out in the boonies doesn't cost Chrysler much, and he's probably selling at higher margin than a guy in a highly competitive market. Moreover, I would think that buyers in small towns sometimes make their purchasing decision based on dealer proximity--no local dealer = no car sold = less money for Chrysler.

[Nords]

Quote:

Originally Posted by samclem Having a dealer out in the boonies doesn't cost Chrysler much, and he's probably selling at higher margin than a guy in a highly competitive market. Moreover, I would think that buyers in small towns sometimes make their purchasing decision based on dealer proximity--no local dealer = no car sold = less money for Chrysler.

I think market size is a consideration-- not too many Chrysler buyers on Maui!

[cardude]

The dealership network costs the manufacturers very little. Sure they have to have some employees to handle phone calls and process warranty claims, but the ratio is about 30 stores per rep currently so that's not a big expense. We pay for all our own expenses-- nothing is funded by the manufacturers. Their desier for a "stronger" dealer network could backfire on them since people are fickle and if they don't have an easy opportunity to visit their local Chrysler dealership but instead have to drive 50 miles to visit a dealership, they may just drop by a Ford, Toyota or Nissan store instead to see what they have.

Plus, the rural dealerships were generally easier to deal with. In my case someone just told me the other day that he hated the Chrysler dealer in the city about 25 miles from my store and now that I don't sell Chryslers he would just buy something else.

The factories want these stronger dealers so they can make them all build cookie cutter looking buildings and force them to buy all their stupid kiosks and crap that they couldn't force us to buy. All the new dealer agreements are really going to shift over to giving the factories all the power I'm betting.

[deserat]

cardude - sorry to hear about your money issue - I do hope you get it someday.

I have a question - I just saw a guy on TV who owned a successful Chrysler dealership say Chrysler is 'moving' his dealership up the road to be combined with another one - he said he had been in business over 59 years and been successful. How can Chrysler dictate this? It reads as though you actually own the business - so it should be your decision as to whether or not you close or 'combine.' Is there something in the contract with Chrysler that allows this?

[ls99]

Quote:

Originally Posted by ERD50 And according to the articles, it was the HEMI engine in there, which depending on the model, gets 13 MPG or 15 MPG city. Chrysler - 2009 Chrysler 300 - Performance - Powertrain Oh boy. Double -ERD50

He has upsized to a custom Cadillac with maybe 3 MPG on a good day, plus a driver and a posse. That presidential Caddy must weigh 10000 LB with all the armor. Maybe when he is out of office he'll get a used Yugo.

That caravan of cars he travels with must burn a 100 gallons per hour collectively. Not to worry, we can afford it.

[cardude]

Quote:

I have a question - I just saw a guy on TV who owned a successful Chrysler dealership say Chrysler is 'moving' his dealership up the road to be combined with another one - he said he had been in business over 59 years and been successful. How can Chrysler dictate this? It reads as though you actually own the business - so it should be your decision as to whether or not you close or 'combine.' Is there something in the contract with Chrysler that allows this?

The dealers are owners of their own businesses and in normal times under a normal dealer agreement they would not be able to do that. Since Chrysler is in BK the dealer agreement has been tossed out and the court can do whatever they want now. The dealers don't seem to have much of a voice in these BK proceedings.

We voluntarily terminated our Chrysler franchise back in November when the BK risk looked high and then the GM franchise in April for the same reason and then closed the store down. We were a small but very successful dealership during my 15 years of ownership but it looked like the rules were getting ready to change for dealers and I didn't feeling like risking what I had saved over the years sticking it out. Most of my dealer buddies called me Chicken Little (or just stupid) for jumping out early and they might be right in the long run, but to me there was a huge risk since dealers carry all that inventory and all the debt along with it that's personally guaranteed. And as we can see now, when the manufacturers go into BK they don't buy the inventory back from the dealer but pretty much leave them hanging with it.

On the flip side this is a great time for consumers who need a new GM or Chrysler vehicle to pick up a bargin. If you can find one of these forced-terminated dealers who are now desperatly needing to get rid of all their inventory I'm pretty sure they will do their own version of a "short sale". I can't say how much they less they will take than they owe, but if they are facing personal financial ruin I think it could be thousands under dealer cost. Better to lose a few thousand each on 100 units than the entire $3 million or so.