700 New Car Dealerships Will Close in 2008

The National Automobile Dealers Association says that as many as 700 new car dealerships will close this year, compared to 430 last year. At the end of September, 590 had already shuttered up for good. The NADA estimates that 37,000 jobs will be lost due to dealer closings. The country currently has 20,700 new car dealerships, which make up 18 percent of all retail sales nationwide, according to the Wall Street Journal.

Lending agencies are making it harder and harder to obtain loans, which makes doing business increasingly difficult for dealerships. Most customers have to finance new car purchases, so if loans aren’t available, dealers can’t sell cars. Many dealers also rely on financing for their inventory, and banks are reluctant to provide loans given the current state of the auto market.

The NADA says that dealerships in Calif., Texas, Pa. and N.Y. have the highest risk of closing because those markets have the highest concentration of new car dealerhsips.

Image Via The Baltimore Sun