A package of cash advances is what car dealers need today

Car dealers' woes

A mega cash advance is something that the car dealers need desperately today; it does not matter whether the government offers it or someone else! While all the discussions are focused on the big two carmakers' bailout plea, the worsening financial conditions of the neighborhood car dealers, mainly those who deal with single brands, are getting overlooked. With the car industry suffering a major fall in demand, the car dealers are deep in trouble, failing even to recover the ir fixed costs. And the result, more and more car dealers are forced to down their shutters with every passing day.

Severity of the situation

According to figures available at the National Automobile Dealers Association, as many as 1000 car dealers have closed their operations during 2008 forcing over 50,000 Americans out of work. And the reason is quite obvious; they are facing falling sales on a continuous basis for a very long time now. In 2008 alone, sales figures for many brands dropped by as much as 40%. Even worse for the dealers, these figures are expected to plunge further and reach the lowest in the last 35 years. As a result, playing it safe for the future, car dealers are giving up dealership as a profession.

The real cause

The car dealers are actually facing a double blow at the moment including problems in the non-functioning credit system. First, 94% of the car-buyers get their purchase financed. As there is a dearth of car financing, it becomes difficult for most people to buy a car. Most don’t have enough money out of their own pockets, unless they get a cash advance from some source. The second problem for the dealers is the fact that 'floorplan' financing is drying up very fast. Even dealers with good credit rating are finding it really hard to get a loan. Dealers generally need around $5 million of inventory financing, and absence of it has hit them really hard, especially to small dealers like Bob. ... click here to read the rest of the article titled "A package of cash advances is what car deal ers need today"