My local car dealership just closed. What can I do about my car's warranty? What if the automaker shuts down altogether? What are my rights?

With a record number of car dealership closings in the last year, you may be wondering what you will do if your local car dealership closes, or what if the auto company that manufactured your car fails. How will you have warranty work done on your vehicle?
The short answer is that it may be impossible for you to get warranty service, or any manufacturer-based service, done locally. Automakers are quick to point out that you will still be able to have warranty work done on your vehicle at another certified dealership in your area, which will honor any warranties that you received at the time that you purchased the vehicle. In a larger urban area, another dealership is usually located relatively nearby. But in rural areas of the country, you may be faced with long travel distances to the affiliated dealership that is closest to your location, which can result in a major inconvenience for you and your family. As other automakers’ dealerships won’t honor your warranty, you may have no choice but to travel the distance to the nearest dealership that is affiliated with your vehicle’s manufacturer, forego the warranty work altogether, and/or pay for any service to your vehicle yourself. 
Furthermore, while most dealerships of any automaker can handle routine maintenance and repairs such as oil changes, tire rotations, etc., more complex repairs with your vehicle may be more problematic. If it is necessary to run an electronic diagnostic test on your Chrysler Jeep, for instance, a Honda dealership probably won’t be able to do that for you. On other hand, there are some independent mechanics and repair shops that may have the capability to perform repairs that are more specific to the brand of your vehicle, so long as you are willing to pay for it. 
You should also be cautious about continuing to have warranty work done on your vehicle at a local dealership that is soon to close. For instance, Chrysler has announced that it will not honor any warranty work done after a certain date – June 9, 2009 - at a local dealership that is scheduled to close.
Given the continuing recession and its effects on domestic automakers, you might be wondering whether you should sell your domestic vehicle and opt for a foreign-made vehicle. However, it is clear that even if the automaker that manufactured your car goes out of business, you will still have some rights under your car’s warranty. Due to recent announcements about the financial decline and bankruptcy proceedings for major automakers such as Chrysler, the United States government has pledged that it will guarantee any warranties on new vehicles purchased during any restructuring periods, even if the automaker eventually goes out of business. The value of your vehicle may drop quite drastically if the anticipated financial collapse does occur, but you should still be able to have warranty work done on vehicles from major automakers like GM and Chrysler. 

The information on this page is meant to provide a general overview of the law. The laws in your state and/or city may deviate significantly from those described here. If you have specific questions related to your situation you should speak with a local attorney.

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