US city axes all new car dealership plans for at least a year after huge spike in openings

Due to a moratorium on new dealerships, drivers in one US city may have fewer alternatives for the upcoming year.

Both new car lots and dealership expansions are affected by the one-year prohibition.

Sioux City, Iowa, has almost twice as many parking lots as other cities of a similar size, according to local ABC affiliate KCAU-TV.

However, following a 3-2 decision in support of the temporary prohibition, no new vehicle dealerships will open for a full year.

The city’s planning and zoning administration will now divide dealerships into distinct categories.

City authorities are quite angry with the decision.

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“I’m so sick of secondhand car dealerships that are so packed with cars that it’s impossible to walk around them. Mayor Bob Scott told the Sioux City Journal, “We’re never going to have hope around here if you can’t address that in an ordinance.”

“I know they’re going to get angry at me, but there’s just so many cars,” said Scott.

“Some way you’ve got to be able to control that.”

Until January 10, 2026, dealerships and the expansion of current locations are prohibited.

The Sioux City Council, however, has the authority to review the matter more quickly and possibly revoke it.

Given that “20 more car dealerships could open” during the probe, Councilwoman Julie Schoenherr believes the ban is required.

As she told the Sioux City Journal, “We need to put the brakes on while we do this investigation,”

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According to the city’s website, the tri-state metropolitan area is home to more than 169,000 people.

One of the biggest outdoor music festivals in the Upper Midwest, Saturday in the Park, is well-known for taking place in Sioux City.

In the meantime, Sioux City is working on a number of new initiatives for the coming year.

Dealership Tips

When buying a car from a dealership lot, consider these professional tips:

  • 1. Set your price: Ensure you’ve calculated your monthly budget before going to the lot. You should include the car’s loan payment, insurance costs, fuel, and regular maintenance.
  • 2. Research: Make sure you know which cars you’re interested in test driving before you reach the dealership.
  • 3. Pre-approval: Secure financing before you go to the dealership. Dealerships may give you a better interest rate if they are competing with an outside bank.
  • 4. Test away: Get behind the wheel before making any payments. A car purchase will be worth thousands of dollars – drivers should ensure they like the drivetrain, steering feel, and comfort of the car before taking it off the lot
  • 5. Haggle: Drivers should always try to negotiate the price. There are so many good cars on the American market – buyers have a strong hand when negotiating price.

Kelly Blue Book is the source.

“Exciting new developments are underway with new investment in downtown including the Riverfront Redevelopment Project, 9 miles of machine-built and engineered mountain biking paths, a new $9 million aviation facility and flight school, and more,” according to the city’s website.

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Nearly $260 million was spent in the authorized budget, which is $9.6 million more than the $248.7 million spent in 2024.

Across the nation, auto dealership closures have become more common.

Indeed, a number of dealerships nationwide are closing their doors for good.

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In the past year, dealerships for Ford, Lincoln, Fiat, Maserati, and other automakers have shuttered.

And after unexpectedly liquidating 39 sites, another dealership was recently required to pay $40 million.

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