October 13, 2009
October 13, 2009
Cash for Clunkers ended a little over a month ago with about 9000 vehicles exchanged for $37 Million worth of rebates. Thanks to CARS many Oregonians took advantage of the program and bought a new vehicle. This program basically took buyers that would have bought later in the year or in 2010 and turned them in to buyers in August and September of this year.
The good part about this is that dealers made up for lost sales of which this was the intent of the whole program. The bad part is that there are fewer new vehicle buyers out today than before Cash for Clunkers ever started. It is not all bad news. In other words the majority of those that are buying today are need buyers. The want buyers although are fewer and far between will buy when they see something they cannot live without but only if they have the money or can get the loan.
The need buyers will be forced to buy regardless of what is going on. There will always be those that totaled their vehicle after an accident. You will have those that got their vehicle stolen and it is either unrecoverable or destroyed to the point of no return. Those that have a vehicle that either went to the grave or is about to give out anytime soon and spending another dime on it is not worth it. We will always have first time buyers since it is now their time to purchase a vehicle.
We might be in a slower economy but vehicles will continue to be sold. Trades might be a little scarce because the need buyer rarely has a trade due to the reasons I just mentioned. This problem has caused a lack of good used cars and trucks in the marketplace. Earlier in the year we saw values decrease with the fall of the stock market but since then used car values are up considerably. Retail prices are up because dealers are forced to pay more because prices are up in the wholesale marketplace.
As we finish off 2009 and head into 2010 we will still have vehicle buyers but they might be more need versus want. With Oregon’s unemployment rate just over 12% it is the way it is going to be for a while. As auto dealers we will just have to manage. We were definitely spoiled in past years when people bought new vehicles every few years with money that came from home refinancing. Those days are over but one thing is for sure and that is people will always need vehicles and so will companies. Hybrid cars will continue to be popular as well as all electric vehicles that we will begin to see introduced in the next couple of years.
This article was written by José Pinomesa who is the Past President for the Oregon Independent Automobile Dealers Association in Salem and the owner of José Mesa Auto Wholesale, LLC in Portland. Buying your next new or used car from a member of a nationally recognized automobile dealer association will provide you piece of mind knowing that everything will be taken care of properly. For more information please visit the following websites….