Wednesday, January 28, 2009

Calif. town gives 'mini-bailout' to ailing car dealers

The declining auto industry has meant dire times for many car dealerships, especially those in smaller cities with less sales volume. The lack of big-ticket sales has had a big impact on towns that depend on sales taxes. In Victorville, Calif., which has no property tax, motor-vehicle sales accounted for half the sales tax revenue, reports Rico Gagliano of Marketplace.

Victorville's response was to loan $200,000 to local dealerships that could no longer get loans. "Call it a mini-bailout," Gagliano says. "Automotive News says towns everywhere may have similar decisions to make." Many had assumed that the big three American automakers would "extend credit to struggling dealerships, using money they got from their federal bailout," adds Gagliano. Thus far that has not been the case. Hat tip to Al Tompkins of the Poynter Institute for this item. (Read more)

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