Even though Chrysler has a low days supply of vehicles -- 92 -- than several of its rivals, the company bumped up its sales bonus to dealers who take added vehicles.
Dealers who accept sales bank vehicles could qualify for a $750-per-unit payout.
To earn the bonus, dealers must agree to buy extra vehicles in December. Chrysler then reduces by 25 percent the sales target that the participating retailer must reach to earn dealer cash. Under the company's ongoing retail plan, dealerships must hit monthly, quarterly and annual sales targets to earn bonuses of up to $500 a unit.
When a dealership agrees to a larger allocation and reaches the annual and the December sales targets, the retailer receives an additional $250 a unit sold in December. As a result, dealerships can receive as much as $750 a unit on each December sale.
Terry Kraker, owner of Coopersville Motors in Coopersville, Mich., says he will not order more vehicles because rising interest rates have increased floorplanning costs.
"Interest rates (to floorplan) are hovering very close to 8 percent," Kraker says. "As sales slow down, vehicles age more on the lot. It increases my costs, but that doesn't mean I can pass it on the consumer, especially in today's market."
Floorplan costs on "most cars today are $100 to $150 per car a month," he says. "That is why we are not ordering cars."
Steven Schmelz, owner of Sea View Chrysler-Jeep in Asbury Park, N.J., says he bought extra units.
He will receive the $750 a unit if he reaches his annual sales target, Schmelz says. If not, he will aim to hit his original December sales bogey.
Schmelz has a three-month supply of inventory and bought extra stock totaling more than one month of sales. The store averages 120 new-vehicle sales monthly.
David Adams, general manager of Larson Motors in Nebraska City, Neb., is buying extra stock. "It is the best opportunity for a small dealer who has a tough time getting vehicles in," Adams says. "They are not making you take them today. The units don't show up for three months."
"There has not been one franchise that hasn't done this and doesn't still do it," Adams says of the request to buy extra stock.