The automotive industry is facing a growing crisis as dealerships across the U.S. quietly shut their doors without warning. Customers are left in financial and emotional turmoil, paying for cars they may never receive. Worse, Original Equipment Manufacturers (OEMs) are denying responsibility, leaving buyers with little recourse.
One glaring example is the bankruptcy of Davis Auto Group LLC, also known as Jerry Ray Davis Chrysler Dodge Jeep Ram. Filing for Chapter 11 in December 2024, the dealership’s collapse followed allegations of mismanagement and unpaid taxes. Customers who placed deposits or made partial payments now face the harsh reality of potentially losing their money—and their vehicles.
Another unsettling case comes from North Carolina, where D&S Auto Source was forced to close after thieves stole seven luxury cars valued at $200,000. Although the vehicles were recovered, their devaluation left the dealership in financial ruin. The insurance company’s refusal to cover losses forced the owner into bankruptcy, further devastating affected customers.
These aren’t isolated incidents. Dealership bankruptcies are becoming alarmingly common, with experts forecasting an increase by 2025. The number of cars available for sale in the U.S. has ballooned to 2.88 million, a staggering 51% jump from the previous year. This glut, coupled with high interest rates and affordability concerns, is driving dealerships into financial distress.
The consequences for consumers are devastating. With over 7,100 dealership closures reported in 2024 alone, countless buyers are left paying for cars they can’t access. Many find themselves navigating complex legal and financial waters with no guarantee of resolution. Meanwhile, OEMs continue to avoid taking accountability for dealerships’ failures, leaving customers caught in the crossfire.
Sources:
1. We have been researching auto sector over the past year. Speaking with dealers across the United States revealed that dealers are quietly shutting their dealerships. Only a few incidents are reported in the main stream media.
— Unicus (@UnicusResearch) December 21, 2024
https://www.motor.com/2024/10/the-us-auto-market-oems-and-captive-lenders-face-new-challenges/
https://www.yourerie.com/legal/a-look-back-at-the-most-notable-bankruptcies-of-2024/