Between the approximately 1,900 dealerships that Chrysler and GM have announced that they are disenfranchising and the many more that will likely fail because of dismal auto sales (more than 900 dealerships shut their doors in 2008), a lot of car buyers could encounter unexpected problems when buying a car.

That’s because when a dealership suddenly goes out of business, loose ends that hadn’t been wrapped up can simply be dropped in mid process, leaving the car buyer dangling.

Some car buyers, for instance, never received a factory rebate to which they were entitled. Or service or modifications that had been agreed to as part of the negotiations were never completed. Or a dealer didn’t pay off the loan on the trade-in as promised. This leaves the customer having to pay two car payments: one for the new car and one for the trade-in that he or she no longer owns.

To avoid these kinds of problems, we recommend you take these precautions:

• Use a credit card to make a down payment, order parts or accessories, or pay for service. This way, you can challenge the payment with your card issuer if a failing dealer doesn't come through.
• Never let a dealer roll over your existing auto loan into a new car loan. It’s a bad financial move and can set you up for possible problems. We recommend that you pay off your existing loan before you trade in your car.
• If a dealer has agreed to fix something or provide a service or accessory for your new car, make sure it's done before you take the car home.
• If you do get caught short, contact the automaker's customer-service department to see what recourse you have.

We will continue to monitor this fast-moving story, reporting here in the Cars blog and also updating advice and news on the Auto Crisis hub.

—Rik Paul