Incentives last month shot up 20% compared with June 2008, yet year-over-year vehicle sales plunged 28%. Despite the divergence, and a relatively low level of vehicle sales, incentives still seem to be doing their job.

June incentives averaged $2,930 per vehicle, according to fresh data from Edmunds.com. Vehicle sales, meanwhile, dropped to 860,101. In June 2008, the average incentive was $2,356 on 1.2 million vehicle sales.

Historically, though, even single-digit increases in incentive spendi… Continue

Dealers in need of inventory financing can tap a new federal program starting today.

The Dealer Floorplan Pilot Program, an initiative of the Small Business Administration, will guarantee inventory lines of credit between $500,000 and $2 million. The agency will start to review and approve applications starting next week.

Here are some guidelines of the program:

• Dealers of titleable assets — including autos, motorcycles, boats, RVs, and manufactured houses — may apply
• Loans are guaranteed… Continue

From the Wall Street Journal:

Chrysler Financial, once the financial arm of the new Chrysler Group LLC, will dismiss roughly 350 employees, or 9% of its work force.

More than 100 of the layoffs are effective Tuesday and will come primarily out of the company's sales teams. Another 240 will come at the end of August, when a customer call center in Kansas City, Mo., will be closed, the company confirmed.

Ch… Continue

GMAC LLC has reportedly cut floorplan financing from about 80 dealers, or 6% of the surviving Chrysler dealerbase. Without floorplan financing, those dealers face daunting prospects, and are likely to fail.

There is no surprise in GMAC's action. The pseudo-captive is merely behaving like a financial institution should, dispensing risk with care.

What is surprising is that… Continue