Chrysler is closing about 800 of its dealers by June 9th but the reasoning behind the quick closures has a number of investors and franchise holders wondering just what is going on…

Although Dealers are part of the overall company they are considered franchise owners and just like a McDonalds they are both restricted to standards set by Chrysler but not completely attached.

When a Dealer wants to fill their lot they must buy the cars from the manufacturer. Because they are franchise owners they get special rates and financing but payment is required.

This is what almost 800 Chrysler dealers are shaking their heads at …. because now they must sell all of their vehicles by June 9th or the Manufacture will force them to transfer the cars to other dealers.

Reimbursement for the transfers of Cars and Parts inventory not to mention sale of land and buildings will mean the possibility of multi million dollar businesses going bankrupt just because someone flipped a switch.

In some cases pulling off a band-aid as fast as you can might make sense but then again it can just make things worse as the wound opens again and healing time takes twice as long.

GM on the other hand is giving its dealers a little over a year to react to closings and franchise cancellations. This should allow the dealers to make sales of product and ready themselves for eventual sale.

It is difficult to say what will happen in the next few years to come but if you are buying a car today you might want to stock up on some of the hard to get parts you will need to replace down the line.