|
Automotive Discussions Car People talking about the Car Business – This is the place where it happens |
|
Thread Tools | Display Modes |
04-11-2014, 02:54 AM | #16 |
Senior Member
Join Date: Jul 2010
Posts: 149
|
Let's see what prices do if we have a couple more years of 16 million + new car sales, or rather the manufacturers building cars for that many sales....or more, and then forcing them into the market.
|
04-11-2014, 12:07 PM | #17 | |
Administrator
Join Date: Nov 2007
Posts: 14,869
|
Quote:
|
|
04-11-2014, 12:13 PM | #18 | |
Administrator
Join Date: Nov 2007
Posts: 14,869
|
Quote:
I remember there was one auction company several years ago that was being sued by a group of dealers because the auction didn't take measures to prevent retail customers from attending wholesale auctions and buying cars through a dealer. While I can see how an auction company can prevent retail buyers from attending a physical auction it's a whole new problem when you think about on-line auction access. I wonder how widespread this practice is? |
|
04-11-2014, 08:31 PM | #19 |
Senior Member
Join Date: May 2009
Posts: 548
|
That's an excellent observation. We should see a much higher number of new car trades coming into the market in the next few years. There were a ton of low end trade-ins taken off the market in 2008 with the government scrapping program, and that went hand in hand with a huge drop in the new car sales rate in 2008-2010 that reduced the number of clean, late model, low mileage trade-ins coming back on the market by at least 30 %. I also think that credit crunch in 08/09 contributed to the rapid growth of the upper end BHPH operations due to a large influx of former new car buyers that experienced credit problems during those years. The advent of lower cost GPS tracking and disabling units also made the prospect of selling more expensive late model vehicles in a BHPH model much more attractive to dealers that had never done it before.
|
04-14-2014, 11:31 AM | #20 | |
Administrator
Join Date: Nov 2007
Posts: 14,869
|
Quote:
|
|
04-14-2014, 11:42 AM | #21 | ||
Administrator
Join Date: Nov 2007
Posts: 14,869
|
Quote:
Another variable that's impacting today's auction volume is the collapse of leasing in 2009. Quote:
There was a story in the news here locally where the police were able to recover a stolen vehicle that was at a highway rest stop because they contacted the selling dealer and advised him that the vehicle had been stolen. The vehicle had a GPS tracking device and the dealer was able to disable the vehicle and tell the police where it was. When the police arrived at the rest stop they found the vehicle with the hood up and a Good Samaritan trying to help the car thief get the car started. |
||
04-14-2014, 11:45 AM | #22 |
Senior Member
Join Date: Nov 2008
Posts: 371
|
auto max and bhph dealers do not help auction prices one bit
|
04-14-2014, 12:23 PM | #23 | |
Senior Member
Join Date: Aug 2008
Posts: 341
|
Quote:
|
|
04-14-2014, 04:04 PM | #24 |
Senior Member
Join Date: May 2009
Posts: 548
|
Absolutely a big factor. My wife has always driven a Grand Cherokee since Jeep introduced them in 1993. After I sold out in 2005, I continued to pick her up a "almost new" one every year at one of the Factory Sale's. Usually one that one of the Zone people had used, but if no,t one coming in off a 12 month lease that Chrysler was really pushing up until the credit crunch hit in 2008. I started looking for her a replacement at start of 2013, and there were very few of the new body styles coming thru the auctions and almost none with what she wanted... (4x4 w/low range transfer case--that eliminated the V6 models in 2011-2013 and leather interior--which eliminated most of the Laredo pkgs). Finally wound up ordering a new 2014 in August to get what she wanted for about $6k more than a 2012-13 model with less than 20k miles.
|
04-27-2014, 12:56 PM | #25 |
Member
Join Date: Mar 2014
Posts: 41
|
One month later and the situation has only gotten worse. Every indy dealer I chat with is in the same boat. Low inventory with no way to replace it, and sales are suffering because of it.
We are also noticing people seem to have alot less money to put down on cars than usual for tax season. All have had their worst tax season in years. I am so happy I keep my own personal overhead low (cheap house, no debt), but If things keep tracking like they have the last 3 months, I'll be lucky to clear 30k this year. Not worth it to continue operating given all the time, effort, and constant abuse you have to take to own a car lot. I'm still going to make some cuts. Dropping gym membership, turning in my DVR boxes and opting for basic cable/netflix, washing the lot cars myself, generating my own information stickers for the car windows. Bag/home lunches. I'm also selling cars from my personal collection so I have the cash to make it through the year should things really take a dip. To generate more income and to keep my mechanic busy, I'm opening up some more retail repair work to customers. Traveling far for vehicles is also on the agenda. I'm debating whether to try Houston, Chicago, or Minneapolis. Denver, Kansas City, Oklahoma and Dallas are all in the same boat. Low supply, sky high prices. I'm also completely giving up on cheap cars. Nobody can rub 2 pennies together anymore, let alone come up with $2995.00. All I get on those is phone calls asking what the down payment would be. I'm excited to get a car locally at auction that will clear me $500 now. |
04-28-2014, 08:59 AM | #26 | |||||
Administrator
Join Date: Nov 2007
Posts: 14,869
|
Quote:
Most of our members here have a new car franchise and that's why I really appreciate hearing how business is doing from your perspective as an independent used car dealer. Perhaps in the vein of "the grass is always greener on the other side of the fence" I've often thought a used car dealership had many advantages over a new car dealership because they didn't have to meet the demands of their OEM but your thread has opened my eyes to some of the unique challenges the independent used car dealers face. Quote:
I know when I was closely following the auction activity at Copart that their management saw increased sales activity early in each calendar year as their dealers increased their inventory in anticipation of "tax season." When I created a survey here for our members asking about the impact of "tax season" the response indicated it was mostly a non-event for new car dealers. Quote:
Quote:
We had a thread on the forum a year or so ago where there was a survey asking how far dealers would travel to buy a used car and as I recall there were several dealers who indicated they go far beyond their market to buy used cars. There's no question that there's a variation of wholesale used vehicle prices based on the market and there are opportunities for dealers who try to take advantage of these pricing differentials. Quote:
I always assumed that the lowest end of the used car market would have an ample supply of buyers but given the limited amount of cash that people have to spend apparently that's not the case. To the extend the growth of BHPH has impacted wholesale auction prices, I wonder if they've had an impact here too, where customers know they can buy a car with little cash down and assume that all dealers are willing to extend terms like the BHPH operations do? |
|||||
04-28-2014, 10:42 AM | #27 |
Senior Member
Join Date: May 2010
Posts: 1,497
|
I think the internet has made it much harder to find any pockets of favorable pricing. Back in the day Billings was a great place for Chrysler auctions because getting them back was so expensive people would stay away. We were on the way back to Mpls or Chicago so our shipping was dirt cheap. Now with the lack of inventory people will pay up regardless the expense to get them home. They stay at the office and bid online.
|
05-17-2014, 05:18 PM | #28 |
Member
Join Date: Mar 2014
Posts: 41
|
Update:
I have finally found a reliable source of inventory in Texas. Other than the 8 hour drive I am extremely happy. The inventory I'm getting is fantastic. If the second half of the month is half as good as the first, I'll have a record month. The low supply high has created a large number of frustrated buyers who cannot find anything good for a reasonable price. Many customers have been shopping for months with no luck until they buy from me. We'll see if I can keep it up, but it is nice to report good things happening. |
05-19-2014, 11:05 AM | #29 | |
Administrator
Join Date: Nov 2007
Posts: 14,869
|
Quote:
I'm betting that most of your local competitors are not willing/able to work that hard to secure inventory and I'm hoping your source in Texas will continue to produce good inventory for your dealership. As you mentioned, the fact that inventory is tight and wholesale prices in your market are high may mean there are a lot of retail buyers who are looking for the types of vehicles you're bringing in from Texas. Thanks again for the update and best of luck going forward. |
|
05-19-2014, 12:13 PM | #30 |
Member
Join Date: Mar 2014
Posts: 41
|
The local auction changed hands about 6 months ago and it looks like they are about to make some cuts to staff since they are not running the numbers they expected.
New car franchises are hanging on to everything they take on trade. This is something that was unimaginable when I was working for new dealerships before 2010. Even with the junkers, they are selling with a bare minimum of reconditioning, and they only hit the auctions if remain unsold for 60-90 days. By junkers, I mean cars that are more than 10 years old with 150k and up. Really anything that moves. The new Subaru store next to me looks to have about 3 to 1 used to new, with at least 50 $10,000 or under cheapos. Not quite the same ratio for the Hyundai, Ford, and Toyota stores, but still a much higher ratio than normal. My detailer has a massive backlog of cars from the new Toyota store because they are trying to resell all of it. 70 or so cars just from that one store. Thankfully he always makes sure the small guys like me get worked in fast. Thankfully for me most of their asking prices are ridiculous so its easy for me to compete. I also pick the best ones and recondition them to a higher standard. I really hope the honey hole keeps delivering. |
Thread Tools | |
Display Modes | |
|
|
Similar Threads | ||||
Thread | Thread Starter | Forum | Replies | Last Post |
What percentage of New Car Dealerships have Body Shops onsite? | XDCX | Automotive Discussions | 7 | 08-08-2013 09:44 AM |
Dealerships that host Car Shows | XDCX | Automotive Discussions | 16 | 04-17-2013 01:58 PM |
What's the future look like for the Rural New Car Dealer? | XDCX | Automotive Discussions | 22 | 05-03-2012 03:07 PM |
Independent Franchises? | jules4jeeps | General Discussions | 7 | 06-19-2009 01:13 PM |
City extends $1 Million in Bridge Loans to Car Dealerships | XDCX | Automotive Discussions | 1 | 12-08-2008 09:45 AM |