Auction Monday: Oakwood
Wanna buy a Hummer? You can buy them as cheap as dirt these days. There was a beautiful one that went through the block at a weekly public auction in Oakwood, GA. Nice leather interior. Well kept. The H2 models in particular were an easy piece to market and sell not too long ago… but not last Thusday. It no-saled. Not even the hope of a bid at $13k. Then came the H3. No sale at 10k. No takers. Only two no-sales from new car stores that generally sell everything. Why?
If you said that SUV’s simply don’t sell these days…. you would be wrong. So many folks are taking the contradictory logic of buying used gas guzzlers these days. They want an SUV for all the usual reasons. Big, safe, luxurious. And of course ‘the big one’. Consumers can ‘supposedly’ buy them cheap when gas is high. So they pull the trigger on the belief they bought it at the right time. Gas prices are high right now. That is true. But so is the bidding at the auctions. .
In today’s wholesale market there is a fierce pecking order that comes to play even before the consumer gets his foot in the dealership’s door. First off, the imports absolutely rule the used car roost when it comes to midsized and full-sized SUV’s. Sequoias and Pilots are high above the endless herds of forever sitting Tahoes and Expeditions. Toyota 4Runner’s and Nissan Xterra’s still have strong cache and are becoming increasingly difficult to find in good shape. RAV4’s and CR-V’s are even rarer birds these days.
All of them are still bought at stiff price premiums at the auto auctions. All of them represent ‘finance fodder’ where the actual selling price depends on payments and the term of the loan. In today’s finance driven market, the cash dealers are definitely SOL compared with the buy-here pay-here dealers. Finance deals make more money. Plain and simple. So those buyers rule the sales.
Except now something has changed on a global scale. Even the former mighty dealers of funny money have fallen to a new force at the auto auctions. Exporters.
Exporters send high demand Japanese SUV’s far away from our depressed domestic economy. Thus enjoying the simple returns that come with weak US dollars and less shaky local currencies. Even with customs, duties, and tariffs to contend with, they make a solid profit. Ghana, the United Arab Emirates, Costa Rica… even Nigeria. Japanese SUV’s with American levels of features and content are a red hot commodity in dozens overseas markets.
The funny money that is the US dollar has gradually made all the auto auctions fiercely competitive. Dealer sales. Salvage sales. Even the public sales are now export happy. I’ll give you another example at the Oakwood sale.
A 2004 Honda Element EX 4WD with over 136,000 miles and at least $1000 in cosmetic issues, an orange exterior, and a bad Carfax to boot… still sold for $8300. I saw an 08 in a good color and half the miles sell for $10k just six months ago. Dogfights between exporters always drive the prices beyond clean Black Book values at the auction. But they are just the top dogs in a long pecking order.
Then there are the used car stores that are brand specific. Many folks think that the used car stores can easily buy these types of vehicles by the boatload these days. Not even close.
The ‘factory’ (a.k.a. the manufacturer) is now busy trying to keep their dealers healthy at all costs. Japan is rebuilding which means far fewer vehicles on the new side of the ledger for franchise dealers. Where is that money going that once went to new cars? On the used side of course.
The used Japanese cars and trucks are getting bid up with a vengeance. Add in the fact that we’re still in ‘tax season’ where used car prices are already sky high, and you wind up with an auction market that has prices beyond the best and worst of public expectations.
That is unless you buy the ‘unpopular’ SUV. If you want a late model Trailblazer with high miles, you can buy them aplenty. Orphan brand SUV’s such as Saturn VUE’s and Saab 9-7’s are there for the taking. Even the larger public sales in your state should have plenty of unpopular SUV’s.
As for those Hummer’s I mentioned earlier? You can’t find an SUV more dead in the financial water than a Hummer. Clean Manheim Market Report value on the silver 2003 model with 100k was $16,400. At the public sale it couldn’t even hit $13k. The 2006 H3 with 79k had even less traction in the marketplace. No money even below ‘rough’ value.
So if you’re looking for Bush era bling factor… there are Hummers. Then of course there is the practicality of a Trailblazer if you want better capability at half the price. But if you want the absolute best bang for the buck… don’t buy anything right now. It’s still tax season.
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