Exactly how are car dealerships set up ?

[Modelworks]

Watching all the news about GM closing dealerships got me to thinking about how they are set up. What sort of contracts do they have with GM ? Does GM supply the number of cars based on dealer sales figures ? Does the dealer have to put up money himself for each car displayed on the lot ? Are the cars just on loan until sold ?


I started thinking about if it would be possible for some dealers to stay in business if they were allowed to buy the car at the current dealer price outright, then re-sale . This would allow them to stay in business if they had the capital to buy the cars. If the dealerships did not have the capital to buy the cars outright , would it be possible for them to form their own corporation among other dealers who would borrow from banks to get the capital they need ?
Or is it a situation where GM would refuse to sell product ?

 

[MikeMike]

Almost all dealerships are floorplanned... as in, GMAC loans them the money for the cars they purchase... GM then will pay the dealer the incentives/bonuses/holdback... dealership pays GMAC back... now note, we are talking MILLIONS of dollars in F.P. loans....