Cash for Clunkers Hurting Used Car Dealers

[Libertas1776]

It seems that the program is having an unintended effect on used car dealers.

http://www.wjla.com/news/stories/0809/647349.html

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Independent used car dealers, already struggling with the recession and credit crisis, say clunkers could put them under. " probably selling 12, 13 cars a month," said Reza Rakhsan, president of A-1 Imports.

Rakhsan, whose business is located on Rockville Pike,(Maryland) says he pays more than $20,000 in rent. He dropped his personal health insurance to save $500 a month and his small staff of six may soon have to shrink to five.

"I have a teenage daughter. I was saving for college and I have to use that to survive," he said.
<snip>


It really is an unfortunate consequence for these dealers, many of which are small, family owned businesses. Don't get me wrong, I am an ardent supporter of the program and I am glad Congress passed that extra $2B, but it still never hurts to analyze its far reaching effects both good and...unfortunately bad. I would like to think that somewhere down the line used car dealers like these will one day be trading and selling used efficient and environmentally sound cars instead of the gas guzzling crap traps the business handles now. Unfortunately, it probably won't be soon enough for people like the ones mentioned above.

[WeDidIt]

1. New car sales employs far more people

In fact, there's at least one, and possibly two, orders of magnitude difference in the number of employed people when comparing new car sales to used car sales.

It's all about doing what puts the most people to work right now.

[DJ13]

2. If you factor in the parts business to keep older cars running

that may not be true.

[lumberjack_jeff]

8. And the mechanics who work on those older cars. Painters who fix 'em up for resale...

We're using far too narrow a definition of "auto industry".

[tridim]

3. People don't want to buy used SUVs

That's not CFC's fault.

The used car dealers should have been smarter when gas was $4.50 last summer, and stocked up on cars that people still want to buy.

[armyowalgreens]

4. I've never been to a good used car dealer.

The ones I have been to cheat and lie worse than any new dealer I've been to. Most of their cars are POSs.

[SheilaT]

6. There are actually any number of

decent used car dealers out there in my experience. You do have to do your research before you go to any of them, just as you do when buying a new car. I've noticed that car buying, new or used, has changed dramatically over the past three decades, and in the past seven or eight years the internet has made a huge difference.

Now you can go on-line, see what's available at the lots, then check the value of what's being sold against what such websites as the Kelly Blue Book (www.kbb.com) give you. I've been involved in the purchase of eight second hand cars in the past three years, and have found it to be a generally easy and reasonably pleasant process.

I always do my research. If a dealer seems to be offering cars at less than similar cars are priced elsewhere, I avoid that dealer. There's probably something wrong with the car, and I'm not enough of an expert to figure that out. I always ask for a CarFax report. Many dealers link the on-line listing for a particular car directly to the CarFax report. If I were ever refused a CarFax, I'd walk off the lot. I have walked off lots where I don't feel completely comfortable, if there seems to be something sleazy about that car lot.

Oh, and some second hand cars are being sold very rapidly. My son recently totalled his 1997 HOnda Accord, and is looking to replace it with a good used Honda Civic. He's finding that they are commanding a bit of a premium over the Kelly Blue Book value and are being sold before he can look at them. This is in the Kansas City area, for what that's worth.

As someone else pointed out above, it's the SUVs that are going to not sell, and a lot of those have been turned in. Of course, the Cash for Clunkers program requires that the traded in clunkers then be destroyed and not resold.

[doc03]

5. Oh give me a break people have been hanging onto

a SUV for 9 years and all of a sudden they would have bought a used car if it wasn't for the C4C program. He is just pissed off because he can't rip someone off on a 9 year old SUV.

[GodlyDemocrat]

7. Cash for Clunkers got us a new PT Cruiser

So I really don't care :D

[tuckessee]

10. Keep up your payments, chum.

Sure hate to see the repo man hauling your fancy new wheels away. :rofl:

[GodlyDemocrat]

11. It was paid straight cash for a very low price.

This program works and will stimulate the auto industry. I know several auto workers who have been laid off and retirees worried about their pensions who might have a second shot.

[doc03]

9. These clowns on the right never run out of stuff to whine about

There was cartoon in the newspaper this morning implying the cash for clunkers is depriving poor people to have a car to sleep in.