MG Rover dealers are caught up in the "most terrible situation" following the car maker's crash into receivership, it was claimed last night.
Some were putting a brave face on the collapse of the last Britishowned car company - but beneath the superficial optimism is the fact that they are financially liable for thousands of potentially unsaleable vehicles.
It is understood that some are refusing to undertake warranty repairs on new MGs and Rovers for fear they will not be paid for an estimated £25 million-worth of rectification work already undertaken.
Other dealers were also said to be refusing to take MGs or Rovers in part-exchange deals becuase of fears that residual values could plummet.
Philip Whiting, sales manager of Friarsgate, an MG Rover dealership in Lichfield, Staffordshire, took an optimistic view and said things were "OK".
He added: "We are still selling cars and business is reasonably buoyant. Volumes are at about the same level as this time last year. You cannot get a better car for your money than an MG or a Rover."
Mr Whiting said members of the public were calling at the showroom to express support.
In contrast, John Leek, of All Electric Garages in Birmingham, said: "Dealers are caught in the most terrible situation because MG Rover has continued to pour cars into them at a hundred miles an hour and they are financially liable."
All Electric gave up its 30-year long MG and Rover franchise last year because of fears over the manufacturer's long term future, Mr Leek said.
"I was accepting £3.5 millionworth of new cars and I was extremely nervous that if the company went into receivership they would be worth only £1.5 million.
"I was very sad to give up the franchise after 30 years, not least because the Rover 75 is a particularly good piece of kit, and I still hope that I was wrong."
The bigger national car dealership chains were cautious in their comments on the MG Rover administration, not least because those that are listed are limited by Stock Exchange rules on pricesensitive announcements.
Sunderland-based Reg Vardy, for example, would say only that: "The Reg Vardy Group has enjoyed a successful partnership with Rover for more than 25 years and our thoughts are with all of those effected by the uncertainty surrounding its future.
"We will continue to monitor any further developments and all three of Reg Vardy's MG Rover sites in the UK will be open for business as usual."
Residual, or second hand, values of MGs and Rovers could fall by as much as 20 per cent in the coming days and weeks, according to Mark Norman, of CAP Motor Research, which produces the Black Book guide to car prices.
But values will begin to recover when buyers and dealers get over the initial shock of the MG Rover collapse and realise that the cars can still be serviced and that spare parts are still available.
"A few weeks down the line you will be able to get a Rover 75 for the price of a Ford Mondeo or a Renault Laguna and that it will come with a lot more kit on it," Mr Norman said.
Meanwhile, it was revealed that a deal to sell £100 million worth of MGs and Rovers via Virgin Cars website never got off the ground.
The website, part of Sir Richard Branson ' s Virgin Group, announced the deal in January, saying it could sell up to 1,000 cars a month by offering discounts of up to 35 per cent. But Virgin Cars said the deal had been scrapped at MG Rover's request on "commercial grounds".
