Friday, March 6, 2009

Used Cars

Sitting in a used car dealership can be quite an education. That's what I did the other day while my husband and son took a used 2001 Volkswagen Jetta for a test drive. My son found the car online. He's been looking for months. He and my husband have checked out a number of cars, but the one at the right price with the right stuff had yet to surface.

That is until Saturday. We got to Auto Trader in Stamford just in time. As soon as Eric and Michael left for a drive, another father and son arrived wanting to see the same car. After 20-minutes they left. I was still there. And I did learn a lot.

Despite conventional wisdom that consumers are downsizing, they are not getting rid of their cars. So that means there is a lack of inventory for used cars. The haggling that you'd expect to reduce the asking price to something a little more realistic does not happen with used cars today. They give very little. I watched it in action.

And no wonder. People are not buying new cars. And the supply and demand for used cars has shifted. If no one is trading in old cars (and some 15 million are taken out of supply every year due to accidents, etc), there are not enough used cars to meet demand.

What also struck me as I sat in the "office," was that this little used car shop was selling only foreign made cars. They told me they could not keep Toyota Land Cruisers for more than a day - they sold as soon as they came in. They had 3 or 4 Mercedes, BMW's, Volvo, Saab's, etc.

One guy was looking at a Volvo for his wife. He went over the car carefully. He reported that it was missing a lug nut. The tires were bald. The guys said, "yeah, the tires are low, but they are legal." Meaning, we're not giving an inch - maybe a lug nut - but no big deals. They guy wanted to trade his Ford Focus. They gave him $2,000. It's now on their site for $6,488.

Where one business suffers, there's always an opportunity.

Here's a hot tip - perhaps now's the time to buy Hummer NPR Reports here that GM will put this brand up for sale. Apparently in war torn countries, nothing beats a hummer.

PS - we bought the car.

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