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By Kevin Hepworth
The Daily Telegraph
June 06, 2009 12:01am
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INDEPENDENT car yard owners are being forced to put millions of their own dollars at risk to keep sales moving as traditional finance streams dry up. With industry finance suppliers such as GE Money and GMAC walking away and banks tightening lending criteria or concentrating on home loans, many used car dealers are turning to self-financing to keep the wheels turning.

In the same week the giant General Motors corporation filed for Chapter 11 bankruptcy protection and handed 60 per cent of its ownership to the US Government, those at the coalface selling the world’s automotive products – both new and used – are still feeling the pressure of the economic crisis.

Mark Rosano, whose family has run the Family Car Centre at Chester Hill for the past 35 years, said that keeping sales ticking over was proving a daunting challenge for independent operators, The Daily Telegraph reports.

“It’s pretty tough. With GE (Finance) out of the market the other finance suppliers have tightened up and they are not buying (contracts) like they did 12 months ago,” he said.

“We are effectively self-financing for a lot of our deals or relying heavily on those customers who are paying cash for the cars with pre-arranged finance.

“At the moment I would probably have 60 customers out there who we have financed into the cars ourselves. That is very high risk.”

New car dealers are also offering special deals this month in the run-up to the end of the financial year.

Kia will take back cars from buyers who lose their job in the first 12 months after purchasing their car.

Buyers need to have bought the car on a recognised vehicle finance scheme and still be paying it off.

If they become unemployed and return the car, the company will pay the difference between the assessed value of the car when they return it and their loan balance up to $7500.

The free scheme effectively covers the depreciating value of the car and lifts the burden of loan repayments.

New car sales figures released this week show signs the market may have bottomed out with hopes the reorganisation of the global car industry will lift buyer confidence.,27753,25595707-462,00.html?referrer=email&source=eDM_newspulse

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