By on May 28, 2009

I was sitting around with the COO of one of Atlanta’s largest dealer networks. They now have nine different dealerships. Most of which have historically catered to the upscale and affluent. That is until now. For the first four months of this year, 60 percent of their retail sales profits came from vehicles that sold for $4500 or less. New car. Used car. CPO. Everything. That completely floored me. Then he asked the very same question I’ve heard at least fifty times this year, “How many new cars would it take for us to make as much as we get from these sleds?”

The answer is zero. You just can’t make money with new and near-new because virtually everyone has found the fountain of frugality. New is out and near-new is almost as unmarketable because everyone shops these days and very few have real money. Even funny money. That leaves cheap trade-ins and wholesale flips for my friend, which are literally keeping some of these new car dealers above water. The quality of supply in the auction market for low end vehicles is just horrid these days. New car dealers have been keeping their trade-ins instead of blowing them out for quick cash at the auctions because the banks and the consumers are taking a step back from 10+ years of stupidity. Simply put, late model finance fodder no longer pays the bills. Cheap sells.

What does this mean for you, the customer? Well, let’s just say that new cars and newspapers have one thing in common: nobody really needs them like they used to. The same goes for lowballing your trade-in. Your ride may have a problem or two. But you would still be surprised how strong the under $5K market is and how many are literally fleeing opulence for affordability. To you this information may be the mirror of the news. For me? I see it confirmed whenever I see a cheap fashionable shitbox go for more money than it was worth two years ago.

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40 Comments on “Hammer Time: Best Little Whorehouse in Atlanta...”


  • avatar
    commando1

    Hemi Cudas: down 50%.
    Winter beaters: up 50%.
    Free enterprise at it’s best!

  • avatar
    johnthacker

    The quality of supply in the auction market for low end vehicles is just horrid these days. New car dealers have been keeping their trade-in’s instead of blowing them out for quick cash at the auctions because the banks and the consumers are taking a step back from 10+ years of stupidity.

    Of course, this can’t last forever, so as Herb Stein said, it won’t. Used cars aren’t created; every used car was once a new car. Used cars sales can not, all things being equal, go up if new car sales plummet. If it’s already making used vehicles more expensive, one of the following things must happen:

    1) The average lifespan of cars before being junked must increase. NOT the time one owner owns it, but the total lifespan.

    2) Sales of new cars eventually increase as the price of their substitute, used cars, goes up.

    3) Sales of used cars go down as well as the supply of used cars decreases and their prices rise.

    In addition, the depreciation of at least some new cars must get better, as they become worth more used. This would affect lease deals (and their profitability.)

  • avatar
    jckirlan11

    So when do you think the price of new and nearly new cars are going to come down to reasonable levels? It seems to me supply and demand curve should drive the prices down but the prices are increasing. I have talked with a couple of used car private lot dealer friends and they don’t get it. I have access to the wholesale prices Chryslers going for way over book, same with Chevy truck amoung others.
    Aren’t there fields of these unsold new cars and if so why aren’t the prices being lowered? The world wonders.

  • avatar
    mikey

    I was planning to sell my babied low klm 2001 Grand Am GT coupe.I figured the new car dealer would only want it for wholesale.I was shocked at its trade in value.As an employee the price on my new Impala is set by GM Canada.I even checked to see if they were f–kn with the new car price.The used car manager said”I wish I had a lot full of cars like these”They parked it on the second row.Sold it in three days.

  • avatar
    John Horner

    Just imagine what the long talked about “clunker crusher” incentive might do to the low end used car market! Stock up now :).

  • avatar

    Was this Nalley? I notice that they’ve started running TV, print and internet ads for used luxury vehicles for under $20K.

    And the pic reminds me… there’s an old industrial complex of some kind just south of Atlanta on I-85 near Sharpsburg-McCollum road that’s being used as a storage lot for new Honda Odysseys. It’s only partially visible from the highway, but there are hundreds (if not thousands) of them stashed there.

  • avatar
    AKM

    Simply put, late model finance fodder no longer pays the bills. Cheap sells.

    Good to see that people are finally getting to their senses. I used to see a lot of people who were buying more car than they could afford.

  • avatar
    superbadd75

    I pass an auction lot on my way to and from work daily, and the nearly new cars outnumber the older cars by a huge margin. This used to not be the case, it used to be fairly even if not tilted to the older cars. We don’t have those types of cars here on our lot, but my buddy across town says they pretty much try to sell everything they trade for, and they’ve been fairly successful doing it. Things will have to balance out sooner or later though. AS it has been noted many times before, there are no used cars if there are no new ones first, and those cheaper used cars will have to be traded in to sell again. There is a car “food chain” that must start somewhere. Besides, new car deals are getting better as used car prices creep up. You may be able to buy decent lower end new cars out there for $10-$12k with a warranty while used car prices continue to creep up. A lot of folks out there may prefer the warranteed new ride if they can swing it. The inevitable lowering of new car prices may facilitate that a little more as the recession continues.

  • avatar
    taxman100

    So my 2000 Corolla CE automatic with 131,000 miles, a rusty lower door seam, and a broken cassette player might be worth enough to take it out of the “drive until wheels fall off” category?

    It’s hard to justify selling it when all we use it for is to commute to the office and grocery store.

  • avatar
    kablamo

    johnthacker, you’re right the supply of used cars is obviously not limitless, however I think we can definitely go through a few years of this before we return to a sustainable point of new/used sales.

    For years (since 2001) dealers have been shoving artificially high numbers of new cars into the market and we wondered when it would end – well that is now.

    I have friends who are just now deciding to sell their second/third cars, their “fun” car, or opting to keep the fun-er car and selling the wagon. As people decide (or realize they have to) they can make due with less, we’ll see plenty of used supply come from full driveways. We already know the dealer lots are full.

  • avatar
    TonUpBoi

    Yep, and welcome to why I’m stopping after work to look at a 1994 Mazda MX-3 V-6, 120k on the clock, supposedly very nice condition, owner is asking $2000.

    There’s a lot of nice, interesting cars that I couldn’t afford when new that I’d still like to have pass through my life. The MX-3 is one of them.

    That two-grand-keep-it-two-years can get me through quite a few cars I’ve always wanted to own-before-I-die.

    New stuff? Ask me about it in ten years.

  • avatar
    menno

    Does anyone else see an interesting series of dynamics going on here?

    I admit, it could simply be coicidence, but go with me on this, just for laffs & giggles.

    The major auto players are having a very tough time, and new car profits are essentially negative for manufacturers and retailers in the USA.

    The average age of the US automotive fleet is 9.5 years, older than it has been since WWII; and ironically, 2 years OLDER than the fleet in what was once communist Eastern Europe.

    Crush rates exceed replacement rates; the fleet is therefore shrinking and can only contract for so long before problems ensue. Just as happened when no cars were built from early 1942 to mid-1946. To add to this factor, parts manufacturers are going bust all over the place. How long before it is difficult or impossible to get parts for 12 year old cars?

    The major auto players are shrinking so fast that when (not if) demand comes back, they will be literally unable to supply a sufficient number of vehicles from the decimated US, Canadian and even Mexican manufacturing base which make up NAFTA. The “transplant” surviving manufacturers will have had their hands burnt badly in the US and obviously won’t have been willing to add new capacity in this country, especially given the fact that smart people are looking at the Chrysler bondholders getting shafted and saying “why put money into a banana republic when by capricous executive diktat, your legal rights – and investment – evaporates?”

    There is an anti-car, pro-mass transport administration which will essentially own and control 2 of the 3 only automakers in this country (assuming they all 3 survive, that is); this administration will have cars designed by fiat (and in the case of Chrysler by fiat and by Fiat) to fit their ideas of what zero pollution “individual vehicular transport devices” should be. Read: Way overpriced and underproduced electric Obamamobiles and Pelosimobiles for the great unwashed masses, and massive armored limousines for those who are more equal than the rest of us, fuelled by taxpayer money, of course.

    We also have the Chinese obviously holding tens of billions of dollars and getting extremely antsy about the prospects of the US doing a Zimbabwe / Weimar Republic (i.e. hyperinflation evaporating the value of the money they hold), yet when the Chinese try to overtly purchase US business assets, they are discouraged and banned. Plus they are clearly getting nervous, realizing the position they are in.

    Now, look at the Chinese automakers. They’ve “partnered” with European, Japanese, South Korean and American manufacturers, obtained expertise, and virtually all of these partnered government owned companies are busy ripping off expertise, and even designs and engineering, from their “partners”. Kind of akin to having a forced marriage to a kleptomaniac who insists that he has access to your purse at any time, whether you want it or not; and your paycheck, as well as the purses of any friends who come over.

    So what’ll happen when demand finally increases in the US, and the US based manufacturers and transplants can’t provide adequate cars?

    If free markets reign (fat chance), prices will go up.

    Let’s assume Nixon-like price controls after a period of hyperinflation to try to control it (even though it never works). Our current and previous two administrations were, if nothing else, all about “total control”. (Try – just try – to find the Constitutional authority for virtually anything done by any Presidents since – oh, hell, probably President Ford and you’ll be looking for a long time).

    Car companies will have demand, high prices for wages, parts and energy; and will have money-losing prices enforced as mandatory. This will force them to stay on the plantation of government hand-outs perpetually.

    The Chinese, on the other hand, with super-low costs (no pollution controls, very low wages, no extra costs like American costs of medical care for their workforce, etc) can and I daresay, will, step up to the plate and will offer new cars within the price-fixed boundaries, and will have the factory capacity to do it.

    They’ll even possibly be “magnanamous in defeat” and put a few assembly plants for CKD kits to be thrown together in Mexico, part of NAFTA (which will actually benefit them by reducing their costs). If they are REALLY feeling generous, they’ll put some plants in right-to-work southern states (but Obama will probably close that avenue by cow-towing to the UAW and demanding federal control of everything, including what was once states rights).

    Here’s the “safety level” of Chinese cars at this time, or not long ago.

    http://www.youtube.com/watch?v=M89J5aAIbjA

    (though to be fair to this particular manufacturer, they did work quickly at trying to improve to “marginally acceptable”).

    http://www.youtube.com/watch?v=7e9XuG0WYS8&feature=related

    My larger concern is that quality will be so abysmal, that the Chinese cars – if they are like many things I unfortunately have to buy out of lack of choice (nobody else competing with them) – are junk, and nothing lasts.

    I don’t relish the idea of going back to the 1950′s and having cars junked at 5 years of age due to so many break-downs that it is easier to go get a new one. Back then, it was rust. In the 21st century, it’ll be plastic parts breaking and electronics failing.

    Once the Chinese start selling cars in this country, how long before they use their massive US dollar assets to loan money to Americans, to buy their Chinese cars every 5 years (because they don’t last any longer than that)? And the circle is complete; the Chinese would have their collective hands around the male gonads of the once proud United States of America, and would have essential control over the economy; would have tons of politically connected local dealerships working with them to elicit control over local elections; would be able to be collectively strong enough to demand concessions from DC, etc. Including the ability to say “we’ve just bought (name the asset).”

    The Chinese are very bright, aren’t they?

  • avatar
    johnthacker

    We already know the dealer lots are full.

    The dealer lots are full of new cars, not with used cars. You’re right, though, that households selling their second or third car is another possible source of used cars. However, it’s also something that can’t last.

    The used car market cannot stay hot with the new car market down– just as the reverse was true before. Not quite, actually. The new car market can do well but the used car market poorly if people hold on to their cars longer, decreasing the number of times each new car is sold as used.

  • avatar
    jkross22

    I’d bet this issue has more to do with lack of access to credit than anything else. I would assume these folks are walking in and paying cash for a $5k car. This is a good thing.

  • avatar
    AG

    Maybe they’d be better off sending new Sebrings to the crusher than used clunkers.

  • avatar
    yankinwaoz

    I how many of those nearly new cars are repos?
    I read about a credit union in San Bernadino that has so many repos that they bought the old lot of a closed dealership and opened their own used car dealership.

    Arrowhead Credit Union

  • avatar

    “transplant” surviving manufacturers will have had their hands burnt badly in the US and obviously won’t have been willing to add new capacity in this country, especially given the fact that smart people are looking at the Chrysler bondholders getting shafted and saying “why put money into a banana republic when by capricous executive diktat, your legal rights – and investment – evaporates?”

    The transplants have been badly burnt? There’s a recession once demand increases they will be willing to invest again its really that simple. Trying to somehow say because of Chrysler’s fiasco that no one will be willing to invest is a stretch? If Toyota wants to sell some bonds I’m sure people aren’t going to avoid them due to the Chrysler bond holder situation.

  • avatar
    M1EK


    The dealer lots are full of new cars, not with used cars. You’re right, though, that households selling their second or third car is another possible source of used cars. However, it’s also something that can’t last.

    Add to this families that now can’t afford to acquire a new used car for their newly 16-year-old kid. There’s a lot of room left to reduce “cars per potential driver” in this country.

  • avatar
    Steven Lang

    No, it’s not Nalley. They’re trying to go cheap as well but they like to stay in the five digit range whenever possible.

    I will tell you that certain dealerships have the benefit of selling very buggy products which are exceptionally expensive to correct… if you go through the dealer. IMHO, they’re the ones that are benefiting the most.

    This afternoon I walked for a good three hours… and bought one car. A 2002 Mercury Sable, well kept, for $1705. I was very lucky to get it. A 1998 Taurus with Leather and 10k more miles sold for $2500.

    Every ‘IF’ bid I had was rejected. If it’s a clean car many dealers are willing to shop it around before selling it. It’s a shame. Many of them like to liquidate by the end of the month… but not these days,

  • avatar
    26theone

    What people are forgetting is that in the new auto world there is no need to have 100 new F-150s on the lot in every conceivable configuration. You can have 25 or even less and have the customer order the one he/she wants if its not on the lot. Acres of cars on lots is obviously a waste of resources all around. Cars will come with more pre-packaged options (like Honda). Even Toyota has finally started to get on board with limited add on factory options on some vehicles.

  • avatar
    SherbornSean

    Another factor that hasn’t been mentioned is that the scrappage rate is variable. Granted, some cars which are scrapped are destroyed beyond repair, through accidents, abuse and neglect.

    But many cars that work fine or are easily repaired are scrapped because no one wants to drive a 20 year old Cavalier. If lack the of available credit changes people’s minds and values, then a lot of these serviceable vehicles will remain in service.

    I wouldn’t bet on the US car market going back to 16M in annual sales any time soon.

  • avatar
    AlexD

    To digress for a moment – the photos attached to these auction articles of late remind me of the hoards of zombies from Resident Evil.

  • avatar
    carguy

    These are amazing numbers but not that surprising given the economic climate. Call me a non-conformist but in the midst of this “less is more” trend there has rarely ever been a better time to buy a new car – thousands of dollars in discounts and near zero percent financing are awaiting any one with a decent credit score.

  • avatar

    Being crazy enough to have waded into the car market last week, let’s see how TTAC’s BaB do guessing the trade-in value I took towards my new car.

    I traded in a 97K mile 2003 VW GTI 1.8T Tiptronic . Recent oil change, new air filter, new fuel filter, spark plugs @ 89K, timing belt around 60K, tires lightly worn with just 10,000 miles of use. Service records provided and up to date including coolant change @ 5 years and brake fluid every 2 years. Routine maintenance had been done my me, big jobs done at dealer. Traded-into-dealer is part of same chain, but different location, as shop that did big repairs/maintenance.

    Everything works inside the car, interior was very clean.

    Many (mostly fixed with paint pen) rock chips in hood, chip in windshield, 1″ crack in windshield (patched 3 years ago, not spreading). Small crease in right fender along arch of wheel well. Some scratches on front and rear bumper. No rust of any kind.

    Clean One-Owner Carfax. Mainstream color, OEM wheels.

    Reason for trading? Time for a change after 10 years of driving VW’s. Also, felt like I couldn’t trust the car any more. After two years of driving in fear of a never-appeared transmission failure it was time for a change.

    It was a cash trade offer, so I don’t think the new car deal influenced it. If it matters to anyone’s guess I picked up a new ’08 Volvo C30. The C30 stickered for 30,800 and I paid 22,500 (including trade, not including tax and tags). They made no money on the back end as I wrote a check for the balance.

    Reading this thread (about a week too late, it seems) makes me think that it may have been worth my while putting my old ride on Craigslist after all.

    Any guesses on the amount offered for my trade?

  • avatar
    menno

    Yes, carguy. I snagged a brand new 2009 Hyundai Sonata GLS 4 cylinder with Bluetooth* for over 30% off MSRP.

    The local Kia dealer has 2008 leftover Rondo wagons for 30% off. Not as good deal; it’s last year’s model (tongue in cheek).

    *Bluetooth is really kind of cool in a sense that I never really expected to see such a thing in my lifetime, despite being born in 1957 and watching shows which depicted such stuff on TV ‘in the future’ when I was a kid.

    OK think about it from this perspective.

    I’m sitting in my car, talking to it, instructing it to telephone a friend, and the car talks back to me. Once it understand my simple instruction “Call Tom” the car itself communicates with another miracle (the cell phone on my belt), which contacts a cell tower, which contacts a phone company, which completes the call to Tom.

    As I drive along, it effortlessly (to me) and seemlessly changes from one cell tower to the next (well, most of the time).

    When I was a kid, in the 1960′s, there were car telephones. They were strictly for VERY RICH people and were extremely limited in terms of where they worked. Plus you had to talk like you were on a ham radio set, apparently.

    Now then; where’s my damn gas turbine car? House on a pedestal? Flying car? Robot? (The Scooba and Roomba don’t count).

  • avatar
    Stingray

    I could buy a 9C1 00-05 Impala, good condition.

    Then, go to this place, one upgrade at a time…

    http://www.3800performance.com

    And be happy for some years playing with the turbo system.

    With a little over US$ 10K I’d have a 300HP sedan, which I currently need(well just the sedan, but those 300HP…), that handles and brakes decently.

    Sadly, I live down here… please continue with your conspiracy theories about the chinese/obama/”socialism”, you inhabitants of the empire on the slide.

  • avatar
    fallout11

    Since the average American household has more vehicles than drivers it will be some time before even parity is returned even if crush rates exceed production ones. For many decades, a one car household was the norm. We have a very very long way to go to get back to that.

    The median and mean age of automobiles has steadily increased since 1969, as overall quality improved significantly. The days of 3 year rust-through are mercifully behind us, and most modern vehicles (excluding wrecks) now easily last a good 12 years/120,000 miles or more.

    Sources-
    http://usgovinfo.about.com/cs/censusstatistic/a/carsperhouse.htm
    http://en.wikipedia.org/wiki/Passenger_vehicles_in_the_United_States

  • avatar
    VelocityRed3

    Steve, if it was not Nalley, was it a member of Famille Ellis? Or perhaps Chastain

    Also you, yourself would not be part of the Lang car-selling dynasty of Southwestern Ohio would you?

  • avatar
    Andy D

    uhhmn, say, there are 10 million new car sales this year. Doesnt that mean that the pool of used cars increases by 10 million when those are sold?

  • avatar
    wsn

    menno:

    My larger concern is that quality will be so abysmal, that the Chinese cars – if they are like many things I unfortunately have to buy out of lack of choice (nobody else competing with them) – are junk, and nothing lasts.

    ———————————————–

    1) Many said that about Japanese products. Even today some Americans would still use “tin cans” to describe Japanese cars.

    2) Good and bad are all relative. What was good in 1980 is likely very bad today. So, if you think the Chinese goods are junk, please tell me who builds better products at that price? If none, then they are the best, because they beat all competitors. And, please, don’t compare a $100 German product to a $10 Chinese product. They are in different segments. The lack of a competing $10 German product is a proof that Chinese products are superior to German products in that $10 segment.

    3) Your “lack of choice” is due to your unable to pay $100 for that product and have to buy the best $10 product, which is made in China.

  • avatar
    TonyJZX

    you people do know that BMW/Mercedes/VW/VAG all make cars in China

    the native Chinese manufacturers export cars to South Africa, Eastern Europe and the Middle East

    they make their own trucks and 4wds for military use

    and that pretty much every laptop on the planet comes from China?

    there is no issue with Chinese manufacture and particularly Chinese auto manufacture at all… there are issues with design and direction but I have no doubt that they are the equal of Thailand or Malaysia or any economy outside of Japan

    the biggest problem is ‘perception gap’, just like how people think that Detriot makes inferior vehicles

    if you are saying Americans need cheap basic safe economic transport I have no doubt the Chinese can fill that gap – they just need to some time after all this current thing settles

  • avatar
    RogerB34

    “…Maybe they’d be better off sending new Sebrings to the crusher than used clunkers.”
    How about demolition derby’s?

  • avatar
    TonyJZX

    the should make all the government departments drive sebrings

  • avatar
    lutonmoore

    the should make all the government departments drive sebrings

    Well, actually we are driving a bunch of Sebrings!

  • avatar

    My experience with car shopping in late April mid May:
    I drive a 2006 Mazda3 hatch since new, I have 40k miles on it.
    I have been to a Honda, Toyota and Mazda dealers, Toyota seems like they really want to screw you up in any possible way, it starts with the price for a new car and end up with a ridiculous price for my Mazda, I know it’s ridiculous because Honda and Mazda offered me much more.
    Honda was the the best in very low price for the new car and also gave me a very fair value for the Mazda.
    At the Mazda dealer it was a little funny, I asked for a test drive on a new 2010 5 door 2.5 liter Mazda3, they gave me the keys and let me drive it by myself, I liked the idea but I did not like the car at all, it looks better inside and out but drives the same like my car, after that drive I decided to stay with my car for 2 more years.

  • avatar
    TonyJZX

    you kinda have to ask yourself what a 2009 Mazda 3 is going to give you over a 2006 Mazda 3?

    unless there is taxation benefits or some outstanding out of warranty issue i can’t see why getting rid of a 2006 Mazda is any kind of sense

    a 3yr old car on avg. mileage is just broken in

  • avatar
    Robert Schwartz

    I think that a number of folks have mis-estimated the dynamics of the market. The US has 1.2 vehicles per licensed driver, and if remember Herr Schmidt’s number correctly 833 vehicles per 1000 pop. Both of those ratios could drop quite a bit without discommoding anyone. Further the current average fleet age could increse a couple of years without much pain. Cars don’t rust like they used to, and if you spend some time in the less affluent areas of your town, you will be amazed at what folks keep running.

    I think the real overhang on the market is “new” cars sitting on the lots of soon to be disenfranchised dealers, and from soon to be discontinued marques. Sebrings, Crossfires, Colbalts, G6s, you name it, it will have to be moved soon enough. What will a “2008″ Sebring be worth when the all new 2010s are unveiled? Aveo, anyone?

    I don’t think we have seen the worst yet.

  • avatar
    SpaniardinTexas

    I was living in Spain in the early 90′s during the 1993 recession and I bought my first car, an old Ford Fiesta for going to college… nobody could afford a new car like nowadays, but the salesman told me that the old clunkers were flying of the lots.

    I have always driven American cars, they are more reliable that a lot of people think and if you have any problem cheaper to repair..

    I met a used car sales rep some years ago.. for a 4500 dollars car, they paid to some people in the trade in maybe 2500 or 3k max… and they told me that these cars, five to ten year old were easy to move for students, immigrants o people who know how to fix their own cars, easier to sell than almost new cars.

  • avatar
    johnthacker

    Add to this families that now can’t afford to acquire a new used car for their newly 16-year-old kid. There’s a lot of room left to reduce “cars per potential driver” in this country.

    Sure, that’s my original option 3. If that happens, then the used car market will crash along with the new car market. If people aren’t buying used cars for that reason, then that keeps the used car market from being hot. Yeah, even though some people who would’ve bought used cars are going without but they’re being replaced with people who would’ve bought new cars, it’s not sustainable forever.

    It’s sustainable for a while, but only by increasing the supply of used cars by selling off spare cars and increasing the lifespan until junked of old cars. But the used car market cannot stay hot unless the new car market recovers.

  • avatar
    Countryboy

    It’s hard to imagine established DEALERS looking to the sub-$5000 market for salvation.

    By virtue of the designation, this is principally a CASH BUY. Not at all conducive to the traditional DEALER doc fees, title fees, light fees, etc. Since it tends to be a cash sale, and mre usually PRIVATE SALE as well, it also eliminates a primary reason anyone would EVER buy a used car from a dealer, which is to “get bought” or relying on the dealers extensive network of crap financing vendors.

    The dealers would be well advised to stick to their knitting, unless they are going to start offering ignition interlocks GPS and buy here/pay here services. There is surviving and then there is being stupid.

    I also see this phenomena lately, but it’s the customer having what I consider a beer budget and unrealistic attitudes. For instance, I get almost daily a request for “A reliable, good running late model car for under $5000″. I laugh and say ..yeah me too”.
    Then they’ll really entertain me and add a “HONDA OR TOYOTA” onto that request.
    Ad I say sure, “1993 Civic with 143,000 miles on it”. Sadly, alot of people have convinced themselves that a HONDA or a TOYOTA will prvide trouble free operation for another 50 or 100/k miles. Do they think they are “saving money”. Whatever.

    Nothing wrong with comedy, as long as it doesn’t waste too much of my time. And throw in a pinch of fear, recent fuel jumps / oil speculators back at work, ultra strict financing guidelines, crummy FICO’s, auto co. bankruptcy and the unknowns of who the last men standing will be, and customers are just going to plug a hole in their transportation needs for a short time.

    This will not be a sustainable trend. It’s nothing more than a short term phenomena.

    This is the “DAVE RAMSEY” model taking hold for the lower 3 income quintiles. More especially, it has taken hold in that meaty 3rd income quintile.
    “Drive a beater and eat beans and rice” while you pay off all your debt advice.
    And there is nothing wrong with that if you can do it for any consistant period of time.

    There currently is still ample supply of $8-10K late model (2-3 yr); 30K mileage, auction quality vehicles for sale. Alot of the usual suspects, fleet queens, and bore-mobiles, like the Spectras, Calibers, Cobalts, PT’s, etc. And there are plenty of decent cars such a HHR’s, Vibes; G6′s, VERSAs; and lots more. Just not for “under $5000″. They never existed, nor will they no mastter how many times Clark Howard tells you it does.

    Heck, auction fees, inspections, delivery, doc fees, and taxes alone eat up a grand or more. That’s a totally different kind of car.

    And that’s why I don’t mess with anything right now that I can’t sell for $9999.99 or less. It’s usually a cash sale, or I have a few customers do the thing I grew up with, $5000 down and a 2 year loan from their credit union for the other %5,000.

    Now that’s sensible.


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  • Matthias Gasnier, Australia
  • W. Christian 'Mental' Ward, Abu Dhabi
  • Mark Stevenson, Canada
  • Cameron Aubernon, United States
  • J Emerson, United States