Dealer shutdowns mean extra towing for some owners

DETROIT — There are 789 fewer Chrysler dealers this week. And by the end of next year, there will be 1,100 fewer General Motors dealers.

As the automakers terminate contracts with dealers across the nation as part of their bankruptcy reorganization, many owners of Chrysler and GM vehicles will have to find new sources for oil changes, tuneups and major repairs.

What’s a loyal owner to do? The situation is more acute when it comes to Chrysler dealerships cut loose by the company Tuesday. GM dealers will see their relationships with the company end by Dec. 31, 2010.

Chrysler dealers no longer affiliated with the company cannot honor incentives or make repairs needed to Chrysler, Dodge or Jeep vehicles under the manufacturer’s warranty.

In many cases, owners can simply roll their broken jalopy to another one of the 2,392 remaining Chrysler, Jeep or Dodge dealerships. Chrysler spokeswoman Kathy Graham said that even in rural areas, the average distance between Chrysler dealers is 10.7 miles, but there are probably many areas where the distance is much greater.

Another certified Chrysler dealership will be able to handle any repairs under the warranty. It doesn’t matter if you drive a Jeep and take the vehicle to a Dodge dealer.

Life gets more complicated if there isn’t another certified dealer nearby. According to Ron Pyle, president of the Automotive Service Association, representing 10,000 independent repair facilities, consumers are already coming to his members asking if their shops will honor Chrysler warranties.

The answer is no, because a mechanic has no way of being reimbursed for the parts and labor needed to make the repair. Nor do Chrysler dealers who have been rejected by the company. Just because the dealership remains open selling other cars doesn’t mean it will honor a Chrysler warranty, not even a lifetime warranty covering the transmission.

“The customer has to pay for the repair, but they may have recourse if they file a claim against Chrysler to get their money back,” Pyle said. “But we haven’t seen that spelled out in writing, I don’t believe that’s been handled at this point in time.”

Chrysler’s Graham said there have been a few exceptions in the past where the company covered a repair at a non-certified shop. She said the company is mailing letters to all Chrysler customers this week; customers whose local dealers have shut down will receive the names and addresses of three to five other dealers where they can take their vehicles.

The company plans additional letters detailing more options over the next 70 days, Graham said.

Even if Chrysler allows customers to use non-Chrysler mechanics, they’ll need to check check whether their warranties cover items such as free towing and loaner cars to use while their cars are in the shop, Pyle said. Sometimes, those perks are given by a dealership, not an automaker.

The situation may be trickier if you have a Chrysler vehicle covered under an extended warranty that was sold by a dealership that’s shuttered or no longer affiliated with Chrysler.

Owners should first check to see if the extended warranties are backed by Chrysler or third-party insurers, said Tim Meenan, executive director of the Service Contract Industry Council, a trade organization that provides extended service contracts on cars, homes, and other consumer goods. He suggested owners be proactive and read the warranties before their cars are in need of repairs. And, if necessary, ask the customer service department for more information.

“Call the 800 number because the extended warranties are not limited to dealers,” he said. “Work with that company. They might have a place you can take your car in lieu of the dealership.”

While many of the closing dealerships offered great deals and incentives to clear the cars off their lots, those bargains vanished Tuesday along with the contracts between Chrysler and the dealerships.

Graham said there are probably few Chryslers left at those lots, since the leftover vehicles were likely sold to surviving dealerships. But if you do manage to purchase a Chrysler from a dealer no longer under contract with the company, the manufacturer and powertrain warranty will be honored at another dealership, she said.