I wrote a column recently saying dealers might need to forgo making profit on their used inventory for the next three or four months because of a potential impending devaluation of used vehicles.

The idea arose from a conversation with Dale Pollack, founder of VAuto.

I know the idea is provacative and radical but I believe the reasons are sound.

Read the column and let me know what you think.

How many sales does your staff lose because of inaction? It might be more than you’d care to know.

Our office manager just purchased a certified-used Ford Escape from Imlay City Ford Lincoln Mercury here in Michigan. She began her search the other day on AutoTrader.com and Cars.com. She settled on two dealerships — the one in Imlay City which is more than an hour from her house, and the other (which I will call Dealership B to protect the guilty just a few minutes drive from her home.

Imlay City Ford included several pictures of the Escape on its AutoTrader.com listing and did a nice job marketing the vehicle online. Dealership B failed to post any pictures of its Escape. But our office manager liked the price and the mileage, both of which were better than Imlay City Ford’s Escape.

She sent an email to both dealerships, asking for payment information and letting them know she had excellent credit. Tina Williams, Imlay City’s Internet manager, called her within 15 minutes and provided our office manager with all of the information she requested.

Dealership B? Well, she’s still waiting to hear from them more than a day later.

Sometimes, this isn’t rocket science. If you do your job, the results will take care of themselves. Here was a great opportunity wasted. It’s not only the sale it lost, but possibly all of the service revenue also. Of course, Imlay won’t get the service because of the distance, but Dealership B lost out simply because it did not respond to an Internet lead. I doubt the dealership is so flooded with leads it can’t respond to all of them. All they had to do was pick up the phone and call.

By the way, I wonder how much Dealership B paid for that AutoTrader listing?

Meanwhile, kudos to Tina Williams and the team at Imlay City Ford Lincoln Mercury. You guys have your act together.

Finally, a little bit of good news for GM dealers. According to a SEC filing this afternoon, GM is allowing GMAC to defer, until December 30, payment up to $1.5 billion on vehicles shipped to dealers for which it provides floor plan financing.

Under normal conditions, GMAC pays GM the invoice price of the vehicle on the first business day following shipment. The move should enable dealers to order more vehicles and help GMAC finance a few more sales before the end of year.

Last month, GMAC financed only 1% of all of GM sales. A year ago, it was almost 70%.

GMAC, hurt by the mortgage collapse, will finance only those customers with credit scores of 700 or higher. And it’s been tightening the screws on dealers’ floor plan financing. Many dealers have been forced out of business because of the stricter policies.

December 26 is a critical date for the finance firm. The company wants to submit an application to secure bank status, allowing it to be eligible for TARP funds. Before it can submit the application, GMAC has to convince bondholders to agree to a debt swap of $38 billion for lesser debt.

The original deadline was Friday, December 12, but GMAC extended it two weeks because it fell nearly $17 billion short of its goal.

Bondholders agreed today to enahnced terms for a debt exchange, but GMAC still is far short of what it needs.

GMAC’s precarious position is dicey for GM dealers. Several analysts believe GMAC will have to pull its floor plan financing from all of its dealers — as many as 40% of GM dealers finance with GMAC — if the company is unable to secure bank status.

Conceivably, 40% of GM dealers could be out of business sometime in January if GMAC does not survive.

Check out David Kain’s short piece on Web-tools your dealership absolutely must have — especially in today’s harsh sales environment.

Click here to read it.

The U.S. Senate effectively voted tonight against providing a bridge loan of $14 billion to GM and Chrysler.

It’s backwards, but the Senate’s actions might work in the auto makers’ favor.

The only play available to the auto makers is for the White House to authorize money from the TARP fund to be given to the them.

If that happens. there will be few strings attached, unlike the legislation proposed by Congress, which would have forced the auto makers to give signifcant control of their companies to the government.

A deal appeared close earlier this evening when Sen. Bob Corker (R-TN) submitted an alternative proposal, for which he later received high praise from Republican and Democratic Senate leaders.

The bill died when the UAW refused to agree to a demand from Senate Republicans forcing it to name a date by which it would agree to take significant pay cuts, placing it on a similar wage level to import auto makers.

Stay tuned. This story is far from over.

Although NADA is concerned federal funding provided to auto makers might result in the elimination of some dealers, being denied financial assistance is a far worse alternative, officials say. Many dealers view it as winning the current battle in order to survive to fight the next one.

Read more about NADA’s efforts here.

Despite an agreement between the White House and Congressional leaders on legislation that will provide a $15 billion bridge loan to GM and Chrysler, the battle is far from over. And time is running out.

Media reports and our sources in Washington D.C. are indicating Republicans are becoming more firm in their opposition to a loan package for the two domestic auto makers.

For whatever reason, the auto makers and their dealers appear to be losing the battle on Capitol Hill at the moment. The problem seems to be Senate Republicans, primarily in the South. Whether their resistance stems from a true philosphical position (which was missing when they doled out — and continue to do so — money to financial institutions), or an attempt to break the UAW, or strengthen their manufacturing base in the states they represent, Republicans are willing to force the country into what many analysts say will be an economic depression.

Louisiana Senator David Vitter (R) argued today in the Senate that giving money to the auto makers before they provide detailed restructuring plans is “backwards,” and “putting the car before the horse.”

He’s got it wrong. A better question is, What doctor would require patients near death provide detailed plans on how they would better take care of themselves before offering treatment? Yet, that is what’s happening here.

What’s frustrating to dealers is that Republicans they thought were friends are now ignoring their pleas. For an industry that generally tends Republican (since 1990, the automotive industry has given $100 million to Republicans and a mere $33.7 million to Democrats according to OpenSecrets.org) the love is not being returned.

If you had told dealers two months ago that Rep. Barney Frank (D-MA) and Speaker of the House Nancy Pelosi (D-CA) would be their best friends they would have laughed. But that is the case today.

One could say the only question to ask Republicans is, do they want to go down in history being blamed for two Great Depressions in less than 100 years? Because that is what’s going to happen if they deny the auto industry a simple $15 billion in the next few days.

SOUTHFIELD, MI – Amid plummeting vehicle sales, thousands of job losses, an economy officially in recession and pleas for federal assistance, a handful of auto makers have cause to celebrate.

Ward’s Automotive Group announces its 2009 10 Best Engines list, which reflects the diversity of powertrains that will play a role in reshaping America’s automotive landscape.

The winners for 2008 (engine and tested vehicle):

Audi AG: 2.0L TFSI turbocharged DOHC I-4 (A4 Avant)

BMW AG: 3.0L turbocharged DOHC I-6 (135i Coupe)

BMW AG: 3.0L DOHC I-6 Turbodiesel (335d)

Chrysler LLC: 5.7L Hemi OHV V-8 (Dodge Ram/Challenger R/T)

Ford Motor Co.: 2.5L DOHC I-4 HEV (Escape Hybrid)

General Motors Corp.: 3.6L DOHC V-6 (Cadillac CTS)

Honda Motor Co. Ltd.: 3.5L SOHC V-6 (Accord Coupe)

Hyundai Motor Co. Ltd.: 4.6L DOHC V-8 (Genesis)

Toyota Motor Corp.: 3.5L DOHC V-6 (Lexus IS 350)

Volkswagen AG: 2.0L SOHC I-4 Turbodiesel (Jetta TDI)

For more on the story, click here.

Also, share your comments and let us know what you think!

Although times are tough for the auto industry and its dealers, OneCommand, a Cincinnati-based automated, multi-channel marketing firm is asking car dealers to help collect one million toys for needy children this holiday season.

Al Babbington, OneCommand’s CEO, says the firm is working with several nationally recognized organizations in the effort.

“The credit crisis and the Wall Street meltdown have shattered consumer confidence and devastated the savings of millions of Americans,” Babbington says. “Car Dealers throughout America are resourceful, determined and resilient entrepreneurs. They are the anchors of their communities and second to none for philanthropy and community spirit. This is a call to action that brings hope to the lives of the most desperate in our communities.”

The program can be a “win-win” for dealers. OneCommand plans to contact the more than 30 million unique households in the its database on behalf of its dealer customers and urge them to support the charity effort. In doing so, OneCommand hopes to drive a strong percentage of them into their local dealership showrooms and service drives with gifts and toys for the needy.

For more information about the program or to sign up, visit http://www.onecommand.com/giveandreceive/or call 866.595.3142.

Chrysler has lost 240 dealers this year to bankruptcy because Chrysler Financial has not been able to access TARP funds to use for providing dealers with floor plan financing, according to Chrysler CEO and Chairman Bob Nardelli’s testimony before the House Financial Services Committee this morning. Another 250 dealers are on credit hold and are in danger of declaring bankruptcy.

The numbers of dealers in trouble have accelerated in the last couple of months. In late September, Chrysler vice president Steven Landry told me he had a folder on his desk he refers to as his “SOS” folder. It included files of 75 dealerships close to going out of business.