What do you do when your dealership closes down?

Even if your records go to another dealership, you're not obligated to do business there

Nov 21, 2009

TADA President

In the past six months, thousands of car owners across Canada have received letters from their local franchised auto dealerships.

The purpose was to inform customers that their dealership was closing or that it would no longer conduct business under the manufacturer's nameplate.

For many customers, it was cause for concern. They had legitimate questions about their warranties and service records, and they faced the inconvenience of having to find another dealership.

What will happen to the dealerships that are closing? Some will lose their nameplate status and continue operating as service repair shops or used vehicle dealers. Others will reopen under new ownership, representing a different manufacturer.

If you've received one of these letters (either from a dealership or a manufacturer), there's no need to panic. The good news is that alternate dealerships are eager to step in and address your automotive needs.

But before you rush to the nearest dealership, here are some facts to consider.

First and foremost, the manufacturer's warranty on your vehicle is completely valid and will be honoured at any new-car dealership in North America that represents your make and model.

The same goes for extended warranties. All manufacturer warranties, extended warranties and protection plans are transferable.

Remember, only authorized new-car dealerships are allowed to perform warranty repairs. If you bring your car to an independent repair facility for a warranty-related problem, it could void your manufacturer's warranty.

Second, you may have received an introductory letter from another dealership inviting you to contact them. In fact, they may have already obtained your service records and personal information.

In certain circumstances, this transfer of information is permissible, as long as that information is transferred to a dealership representing your make and model.

Dealerships that are closing are still required to obey privacy laws and practices, as stipulated by the Ontario Motor Vehicle Industry Council's Privacy Code and Practices (www.omvic.ca) and by the manufacturer.

If your service records have been transferred to another dealership, you may want to conduct a little research: Talk to the staff; talk to the customers. Find out if the dealership has a good reputation.

You aren't obligated to do business at a specific dealership just because it has your service records on file. You can request to have that information forwarded to a dealership of your choice.

Third, any dealership that is trying to earn your business is going to make things as convenient for you as possible. They realize that changing dealerships can be a hassle, and that building a relationship with you isn't going to happen overnight.

I've talked to several dealers who have started to accommodate these "orphaned" customers and their stories are mostly positive. They are trying to make the transition as seamless as possible. The last thing they want is to leave customers in the lurch.

Admittedly, these dealers admit the orphaned customers aren't always pleased with the longer drives and the inconvenience of cultivating new relationships. But, overall, the transitions have gone well.

Fourth, remember that you are the customer and you get to choose where to do business. Just because you receive a letter directing you to a specific dealership doesn't mean that you are obligated to go there.

If a dealership wants your business, give it a chance to earn it.

If you have any other concerns about the closure of a dealership, I'd recommend contacting the dealership or the manufacturer directly.

This column represents the views of

TADA. Email: president@tada.ca or

visit www.tada.ca.

Toronto Star