As reported by the Automotive News and The Atlanta Journal Constitution today, Bill Heard Chevrolet, recognized as the world's largest Chevrolet Dealer and reportedly the nations 11th largest dealer group, closed it's doors to all of it's 13 remaining dealerships and filed for Chapter 11 Bankruptcy protection on Sunday 9/28/08.
With reported sales topping $2 Billion dollars and employing more than 2700 people, the dealer group had an enormous footprint in the regional areas in which it operated. Bill Heard, Jr. is citing the difficulty in securing financing for sub-prime customers, a customer base that makes up the predominate amount of retail customers for his dealerships and the steep decline in retail truck sales.
The Heard family has been selling vehicles since 1919 when Bill Heard, Sr. used an inheritance from an uncle to establish William T. Heard Motor Co. in Columbus, Georgia, selling LaSalle, Essex and Hudson automobiles. In 1932 Bill Heard , Sr. purchased a competitor who sold Chevrolet's.
The Heard Auto Group empire spanned several states including Houston, TX, Las Vegas, NV and Orlando, FL, the company was high flying in the 80's and 90's after the company purchased two jets to fly executives around to the various dealerships.
But with the success came complaints, the Heard enterprises were often cited as the leading auto dealer for complaints as reported by the State of Georgia's Office of Consumer Affairs. The company often cited that there competitors or disgruntled customers who were unhappy because they did not receive auto loans was the source of the complaints. In June of 2008 The Council of Better Business Bureaus revoked the Heard dealership's accreditation saying in part that the company failed to correct certain issues and causes of consumer complaints.
In August of 2008 GMAC Financial Services cut off a line of credit that allowed several of the Heard dealerships to obtain new vehicles. With the continued decline in vehicle sales and consumer credit harder to come by sales at the Heard stores continued to fall dramatically auto industry analyst say.
This is just the tip of the ice burg as more major dealership will be succumbing to the harsh realities of this financial crisis and recession that we are in. I am very sorry to say, but it is a reality of the times that we are living in.
Find more info at http://www.ajc.com/ and http://www.automotivenews.com/ .
Side Note:
Reportedly a lawyer named Jon Sheldon who works for the National Consumer Law Center, a Boston advocacy group stated in The Atlanta Constitution and commented on this breaking story, that car dealers collect "significant fees for arranging sub prime auto loans", "the fees often amount to 2 percent to 3 percent of the sales price", this information is not accurate and I want to point out that when arranging sub prime loans the dealer is more often as a condition of selling the contract to the lender paying a hefty fee as a discount on the loan contract (passed on to the consumer in the purchase price). Giving him the benefit of the doubt, his comments may be geared towards a fee normally associated with prime contracts where a dealership may receive a fee from the lender as a buy rate or wholesale rate and then mark the rate up to a retail rate to the consumer, this fee is the dealers commission for arranging the loan.
If people of certain knowledge and authority choose to comment on stories published in major papers, I ask would you please get your facts straight before providing the info to the public, call me to verify first, particularly if you never worked in a dealership. I ask, how did you become an authority if you never worked at a dealership, kind of like playing a doctor on T.V..
Enjoy Today!
That Car Guy
No comments:
Post a Comment