When dealership closes, customers are protected

Bob Attrell

TADA PRESIDENT

Joanne got a letter in the mail, informing her that her local car dealership was closing its doors. This came as a complete surprise to her, as she had always enjoyed a good relationship with the dealership and had seen no signs that it was in trouble.

Besides, it was close to her home, which made it convenient when her car needed servicing. Now, for reasons that made no sense to her, she would have to drive an extra 20 minutes to have her vehicle serviced across town.

Closing the dealership might not have made sense to Joanne, but it made sense to the owner and the manufacturer. Dealerships close for a variety of reasons: re-structuring efforts on the part of the manufacturer, the owner has decided to leave the business, consolidation, economics, etc.

Whatever the reasons, efforts are made to notify customers about the closure. Sometimes, they will be referred to another dealership in the area, where their service and warranty needs can be addressed.

It's quite common for dealers to sell their customer lists to another dealership. The dealership purchasing the list would recognize value in the list and pay a negotiated price for it, in the hope of securing future business.

In some instances, customer service records are forwarded to another dealership within the same nameplate. If a customer prefers to do business with a different dealership than the one recommended, that's fine.

In this case, a dealership would print off a copy of the service records, which the customer would take to a dealership of his/her choice. The new dealer would keep those records on file.

Customers may wonder if new-car warranties are affected when a dealership closes.

No. Standard, bumper-to-bumper warranties are registered with the manufacturer and are totally transferable from one dealership to another, within the same nameplate.

If your vehicle is currently under warranty, then any other new car dealership that sells your make and model will honour warranty claims.

If you have any questions about warranty issues, contact your dealer or the manufacturer.

As far as vehicle leases go, a dealership's leasing portfolio is usually transferred to a different dealership. If a customer wants his file to be transferred to another town or city (as often happens when someone moves), it's entirely within his rights to do so.

Dealerships that close will usually help arrange severance packages, if applicable, and assist employees in finding new positions. Based on my experience, employees who want to continue working within the industry are able to land jobs fairly quickly.

Whether you work in sales, service, accounting, administration or marketing, skilled employees are always in demand.

Whenever dealerships close, it is also a blow to the communities they serve. They provide tax revenue to their communities, as well as support for amateur sports teams and non-profit groups.

My final word of advice to customers who find out their dealership is closing is to view it as a positive move: Find a new dealership and begin to form a new relationship. Give the new dealer a chance to earn your business.

This column represents the views of TADA. email: president@tada.ca or visit www.tada.ca.

Bob Attrell, president of the Toronto Automobile Dealers' Association, is a new-car dealer in the GTA.

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