Orr said Volkswagen Credit revoked his wholesale line of credit in December after his capital reserves eroded to near the minimum-required level. He tried to secure floorplan financing through other lenders, but the recent years of red ink made that tough.
"I just didn't want it to be this year," said Orr, who restores vintage VWs in his spare time and maintains a collection. "I'm 53 and was hoping to make it to 65."
Orr is still technically an active VW dealer, but without a credit line, he can't order new cars. As the April 1 expiration date on his grace period approaches, he's selling down his remaining inventory.
"I really don't want to infuriate anybody from VW," Orr said, "but I'm not the last guy that this is going to happen to."
Orr got into the business the way many do, through his dad, Charlie, who went to work for the Malumphys in 1962 and worked his way into management before buying the store in 1976.
"With $600 in the bank, four kids and a mortgage up to his eyeballs, he decided to become a VW dealer," the younger Orr said of his father.
By then, Ted Orr had already started washing cars and doing other odd jobs at the dealership. He earned his degree in automotive marketing and management from Northwood University in Michigan. After stints at a Chevrolet store and a different VW dealership, Orr returned to the family business, holding roles in every dealership department. He bought the business from his father in 2001.
Orr said the dealership's business was built on loyal, repeat customers. He advertised the store with radio ads that he narrated himself, all closing with the same tag line they have used since the 1990s: "Across from the cows, miles from the bull."
Orr's personal collection includes a 1955 Beetle, a 1965 single-cab VW pickup, and a 1980 Scirocco, the sporty Golf-based coupe with sheet metal styled by Italian designer Giorgetto Giugiaro.
"I'm as VW as anybody gets," he said.
In 2012, a scorching-hot year for the Volkswagen brand, New Milford VW sold 205 new vehicles, Orr said. But sales have dwindled along with VW's sales nationwide: 179 in 2013, and 138 last year, when, Orr said, VW's sales across the Northeast dropped 39 percent.
Gross profits on new vehicles have also declined from an average of about $1,800 per unit in 2001, the dealership's best year for new-vehicle sales, to around $180 per unit last year, Orr said. That, coupled with rising expenses, investments in new lifts in his service bays and showroom design features to be compliant with factory programs, hurt the dealership's finances.
"Without profits, you start to become undercapitalized," he said.