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According to a March 2, 2009 story in the Los Angeles Business Journal, 137 new car dealerships closed last year in California. Of those 137, 32 were in Los Angeles County, the largest single market for auto sales in the United States. This year, it's expected to get worse.

According to the article, 24 more dealers have closed statewide since the beginning of January. And that was before the California Legislature nearly doubled the car taxes last month to help close state's budget deficit. The new taxes add nearly $400 to the cost of an average-priced new car.

"Although car sales slightly decreased over the past five years, it wasn't until last summer - when gasoline prices nearly hit five dollars a gallon locally - that car dealers started to shrink dramatically," said Aaron Jacoby, a partner in Venable's LA office. Jacoby represents many Southern California automobile dealers.

"That's when I first heard clients talking about a soon to be gloomy picture, but I don't think anyone realized how far south things were going to go in just eight months," Jacoby said.