Chrysler Tells Dealers to Sell Those Vehicles or Pay a Fee

Chrysler LLC, pressing to whittle down an inventory of unsold 2008 and 2009 models, handed its dealers a bitter pill — fees on new cars over a year old and revival of the detested “sales bank” that had supposedly died in 2006.

The new batch of inventory fees “was like a last straw,” says Paul Cleaver, owner of Freedom Dodge Chrysler Jeep, Lexington, KY.

He counted 18 vehicles in his inventory over a year old, reckoning that he'll be forced to pay Chrysler Financial up to “tens of thousands of dollars” if those units stay unsold.

The fees are 10% a month of amounts owed on new '08 cars over 360 days old and 50% on '09 models.

In addition, the captive lender is assessing dealers $10 for every new unit over six months old, $15 over nine months and $25 for over a year.

Philadelphia Chrysler-Dodge-Jeep dealer David Kelleher says his 56 units that are a year old would be ticketed for “fire-sale” prices to dispose of them before the extra fees are charged. “If you can't pay, you're out of business,” Cleaver says.

Dodge dealer Michael Bettenhausen, of Tinley Park, IL, had staged a two-for-one sale: buy a vehicle, get a second used one for $1. For instance, a new '08 Dodge Dakota priced at $28,000 and an '08 Chrysler PT Cruiser with 17,700 miles for a combined price of $28,000. The PT Cruiser alone had an asking price of $11,000.

Chrysler dealers report that the auto maker's shaky circumstances and unclear future hurt showroom traffic.

“Customers are uncertain about where Chrysler is heading, and we have to be aggressive in marketing,” says Bettenhausen.