#HammerTime

I went to a public sale this past Thursday. Dozens of vehicles were sold for four figure premiums, but unfortunately virtually all of them were complete and utter trash. A repo’d 2008 Dodge Avenger SXT was riddled with 89,000 torturous miles of abuse and neglect. It shaked, rattled, and barely rolled through the block. Thanks to an owner who considered the numerous warning lights to be mere suggestions.. But it still went for $8800. How? Why? We’re talking clean book value for a rough car in every sense of the word.

0%. Sounds good doesn’t it? The title pawn billboard clearly showed that big beautiful numerical goose egg with some illegible lettering underneath a mini-asterisk. “Interesting?” I thought. Since I was stuck in Atlanta with my 17th traffic jam of the week, I decided to give the place a call and see how good the deal really was.

Well the 0% was good for balances over $2500… for 30 days. Then there were fees. Then a recalculation of the smaller balance. Finally I just got ticked off after over a minute’s worth of recalculations and doubletalk, “Let’s say I come by and get a $1000 loan. How much interest would I pay the first month?”. The answer came out to 17.6%.

I have three junk cars at the moment. The first is the world renowned 1997 Oldsmobile Achieva with a front end uglier than Mike Tyson after his last ‘comeback’ fight.. It came standard with 300 pounds of GM parts bin plastic in it’s heyday, and an oil burning 2.4 Liter engine that rarely ever sees 200k. Like most cars conceived during the Smith and Stempel era, along with the Cavalier and Lumina that now accompany it near a shady tree, the car was well past it’s prime before it ever left the factory floor.

Saturn? Civic? Neon? A diesel owned by Chuck Goolsbee? For the longest time I’ve been trying to figure out what penny pinching prodigy earns the most keep. I’ve spent years pondering this question. Well, more like a few dull moments at the auctions. I finally figured out the answer this evening. The cheapest car to own is the one you like so much… that you’re willing to buy another one just like it so that you can keep yours on the road for years to come. I’ll give you a recent example of two ‘cheap’ cars with two very divergent destinies.

The dogs days of July have been anything but. 83 dealers visited a well-established independent sale this Monday that offered only 93 vehicles. They came to buy and let me tell ya… the dealers paid all the money in the world for some very slim pickings. They had no choice because inventory now is getting near famine levels in the wholesale markets.

Wholesale heaven used to be a crowded place at the dealer auctions. There were Taurae aplenty. Neons, Stratuses, Sables, Sebrings, Optimas, Milans, the names were as endless as the need to keep all the factories humming. Even in the ‘somewhat’ good old days of 2004, the average vehicle that sold for $5,000 at a sale usually had only about 70 to 75k on it. But now it’s a different auction world.

Frank Pajares was an amazing professor at Emory University. He changed lives… and in my specific case he would routinely kick me out of my philosophical foundations at will. “It takes a meaning to catch a meaning.” he would tell me along with the rest of his class during one of our many heated debates. The ‘act’ of putting yourself in someone elses shoes is always a difficult thing for any of us to do. Especially in academia where strong opinions and cultural isolation are the reality of the day. The same is true for the corporate world as well. Speaking of which…

I remember when a 15 year old car was as wore out as an old mop. Rust. Electric gremlins. Dark oils and brownish fluids spewing out of nearly every seal and gasket. When the auctions had a car that was nearly old enough to drive itself, it was usually already smoking (out of the tailpipe)… and drinking (it’s own oil and coolant). The jalopies that came from the bad old days of the 1980’s almost always left a puddle of ‘remembrance’ which you had to be careful not to step on when looking at the next elderly statesman. A run of old cars would result in a nice white cloud above everyone’s head and a post-auction headache for yours truly. It was a nasty smelly world not too long ago.. but now…

My family hates buying stuff at the big box stores. Mom and Pop’s, garage sales and thrift stores have always been the staples of good living for the Lang Gang. That’s not all. There’s a slaughterhouse a few hundred feet away from the county border where I get all my meat. A dozen neighborhood gardens offer an amazing variety of produce for the taking and trading. Heck, even my customers have offered everything from power generators to honey during tight times which I gladly accept. This is Georgia after all. When it comes to buying and selling all things automotive, I have also fond an awful lot of very unusual solutions. Namely…

Holy shit! That’s Mike!” I was flipping through the channels… and there he was. A friend of mine. University of Michigan MBA. Extroverted personality par excellence. Former middle manager at Ford, trying to sell used cars on a public access station. ‘Welcome to the P.T. Barnum world of no shame!” I thought to myself… and God knows I’ve already been there. First there was a Mini (nice car!). Then a PT Cruiser (at least they shined it up). Then the 2078th Impala that was for sale in South Carolina. Then…

Five years ago ‘financing’ was like a cuss word to me. I had spent the prior two years traveling around the country for an auto finance company liquidating 10,000+ repos annually. Seeing repossessed Ford Rangers with $600+ monthly payments and Kias given to anyone with a pulse made me very wary of that world. I stuck with cash cars and made a great worry free living doing that. That was until October 2008 when the cash customer literally disappeared from my landscape.

Knowledge is not always a good thing. Esoteric. Rarified. Just plain old pointless. High school? Anyhow, I have this strange fascination with car reviews. Not the new snuff. But those older wilted beaters that the marketplace has more or less forgotten. You talk to me about a Volvo 240 and my mind will recall a few of these write-up’s and a neat little side story. A 2011 Prius? I would almost rather watch the grass grow.

Who the hell wants a Dodge Daytona? It was a question I was forced to ask myself as a 1991 model with an Iacocca inspired trombone red interior passed through the block. The bidding started at $200 and… well… it sold for $200. Then there was the seller fee, the transport cost, a battery, and pretty soon…

I was broke. Well let me rephrase that. I was a graduate student. So I guess you could say I was ‘comfortably broke’. My home was rented out to two other less broke students and I had plans to convert part of my garage into yet another bedroom so that I could hopefully get another $400 in monthly income. You could say that it was a beautiful time since I had a scholarship and no real responsibilities. But academia and me were not really meant to be. I had plans…

60 days ago I had this idea thanks to a charity I’ve always admired. I would offer long-term rentals for drivers who weren’t too picky or too rich (in taste). But were in dire need to no fault of their own. There were a lot of safeguards and a few hoops that most folks would need to clear before I finally rented them out. Money up front with a deposit. Full coverage insurance. No DUI’s or suspended licenses. Mileage limitations. The list went on and on but pretty soon I found a niche… and thankfully that niche has finally found me.