Quite a bit of sales tax revenue comes from car dealerships for local city budgets. When one or more fail, or lose their franchise license, the city is severely hurt, and thus, may have to drastically cut city services. Further, with car sales down over 30% since last year, coupled with the closure of dealerships many cities are worried about or are currently cutting core services such as police, fire, libraries, etc.
Due to the huge number of dealerships cut by both GM and Chrysler, city governments are going to have to rethink their zoning with regards to new and used car dealerships, at least temporarily. I recommend a CUP or Conditional Use Permit that allows only new car dealerships to sell used cars to be given to those dealerships which have lost their brands, and I'd say 2-3 years makes sense. By then they will be able to find another new car brand to carry, perhaps a new Hybrid Brand or selling electric cars.
The faster these cities act, and permit these dealerships to sell used only or pre-owned cars for a couple of years the better; the better for everyone, and to help keep the commercial real estate market up. Dealership closures look very bad because most car dealerships are on major streets and high ways, which drives-down business confidence, and hurts the real estate prices.
When a city moves to change the permits and zoning in the interim, they give the dealership time to readjust, and regroup, while the city at least has some sales tax revenue from that location, until they can sign on with a new brand. Please consider all this.
