Syracuse (WSYR-TV) - This Your Stories Q&A is straight from the headlines -- and this one may have popped into your head, too.
As you ponder the fate of bankrupt carmakers and dealers desperate to sell, who owns all those unsold cars on the lot and in the showroom?
Tanya e-mailed us this question, and once upon a time, the answer to this one was routine, and unchanging. Now, it's a major part of the shifting sands for car dealers everywhere, struggling for survival.
The short answer, still, is this: the dealers own the new, unsold cars.
For decades, they've used a form of financing called "floorplan" funding. It allows them to buy cars from the manufacturer on credit, and pay back the debt only after the cars are sold.
But with capital hard to come by and dealer finances under severe pressure, the lenders behind those "floorplans" are clamping down, enforcing rules they haven't enforced for years.
The Chicago Tribune gave one example: If a car sits on a lot too long, the lender is allowed to collect as much as 10 percent of a car's value every month.
The other part of Tanya's question: Does the manufacturer ever buy back unsold vehicles? The answer there is no.
One silver lining for dealers: This spring, the Federal Reserve agreed to support floorplan financing as part of its $1 trillion term asset-backed securities loan facility that may eventually give lenders some breathing room, and let them lend more.
If you’ve got a question for the Your Stories team, give us a call at 446-9900, or email us at yourstories@9wsyr.com.
