"This is a real nightmare," says South Carolina Ford dealer O.C. Welch.
Nearly 30 percent of his inventory is six months old or older, Welch says. Early arrivals of 2010 models are further eroding the desirability of older models, he says. Welch has new 2008, 2009 and 2010 Mustangs on his lot all at once.
He estimates he has racked up $500,000 in operating losses liquidating old inventory during the past six months.
Ford "might not need bailout money, but we do," Welch says.
Dealers say they need more help from the manufacturers.
"GM needs to simplify their rebates because nobody can understand them," says Crump, owner of Crumps Pontiac-Cadillac-GMC in Tremonton, Utah. "And if they want to get rid of the older inventory sitting on dealers' lots, they've got to bump them up."
Old inventory is a "huge problem" for dealers, says Jessica Caldwell, an industry analyst at Edmunds.com. Incentives for 2008 models are still strong, she says. Typically, they wind down in March.
For instance, this month GM is offering a customer cash rebate of $7,000 on the base 2008 Chevrolet Suburban, Edmunds.com says. The rebate on the base 2009 model of the SUV is $1,000.
Vehicles sold in March were on lots for an average of 98 days before selling, up about a third from healthier times, Edmunds.com reports. The March number would have been "mind boggling" two years ago, Caldwell says.
GM and Chrysler dealers seem to be struggling the most, she says. Chrysler vehicles sold in March took an average of 121 days to move while GM vehicles required an average of 111 days.