You can expect more bad news when auto sales figures for September 2008 are released in the coming days. Expect to see approximately 13 million units sold. This would be a 19% decline versus last year. In early 2008 some expected this sales slump to be turning around by now. Of course the credit problems facing virtually every bank has an impact on this month’s sales, but I believe the end is unfortunately not in the near future.
You the car shopper can use this information to your advantage. If you walk into a car dealer in October knowing your stuff you will encounter a hassle-free path to getting the car you want at a great price. No manufacturer is doing well so that means everything is… on sale!
Milton Bouger is a car salesman who implores people to have fun buying a car. Well, that’s a nice idea. My problem with this story that you can read here, is that it appears Mr. Bouger has fun, but I can not understand how the buyer is suppose to have fun!
Mr. Bouger offers some advice and here are my thoughts on his ideas. First he encourages car shoppers to know their credit score and he is 100% correct. Not knowing your credit score can cost you a lot of money. He recommends not always buying the cheapest possible vehicle, by spending a bit more you could end up avoiding costly repairs on a vehicle that is on its last legs, so you would be better off spending a bit more for a better vehicle, in theory I agree with him. Another piece of good advice he offering is to know the total amount of money you will be spending prior to agreeing to the purchase. For example insurance costs, DMV fees, etc you should know these costs along with your monthly payments, this is good advice. And he also recommends going on line and doing your research, and obviously I agree with that!
So far Milton’s 4 for 4! My only problem with his advice is the very last line of the article where he is stated as saying, “Try to have fun buying your vehicle, if you get too serious you could over negotiate and blow a good deal.” I think people go to Disney Wolrd to have fun; they go to a car dealer to purchase a form of transportation. The notion of over negotiating is classic car salesman 101. If you do the proper research you will know exactly what you should pay for your next car and you should not be intimidated or afraid to hold your line, especially today. With car sales slumping to historically low levels do not hesitate to hold a car salesman’s feet to the fire to ensure you get the car you want at the right price. Even if the car salesman seems like a very nice guy like Milton Bouger!
Two Yale University professors have just completed a study and the answer to the question, should you get a sunroof on your next car? Is no! Apparently at the time of purchase 62% of the people surveyed are positive about the option of paying $900 for a sunroof but months later, the level of satisfaction drops down to 26%. So, according to these two Yale professors buying a sunroof is not a good idea.
Not so fast, there’s one element these two professors forgot to factor in, the vehicle’s resale value. Now I went to Kelley Blue Book and compared the trade-in value of an extremely popular car, a 2006 Toyota Camry LE Sedan 4 door. I got the trade-in value for this car in good condition with the exact same options except one had a sun roof, the other did not. The Camry without the sun roof had a trade-in value of $12,450; the same Camry with a sun roof had a trade-in value of $12,760, a difference of $310.
So this is the conclusion I draw from all this, a sun roof will increase the value of your next car by hundreds of dollars. Of course this offsets some of the initial expense. Additionally, if the majority of people desire a sun roof when they are initially buying a new vehicle I think it is safe to assume they will have a similar desire prior to buying a used car so the sun roof may allow you to get even more for the vehicle’s trade-in value if you try and sell the car yourself. This means that if you want a sun roof on your next car you need to understand that it is an additional expense. But you need to understand that the vehicle increases in value, real and perceived when it has a sun roof.
As Congress wrings its hands over the decision to provide in excess of $700 trillion dollars for a Wall Street bailout it is important for you, the car shopper to understand how this will affect you. The primary purpose for this bailout is to assist banks and lending institutions who are becoming very reluctant to lend money. This reluctance to lend is being felt in car dealerships across the country (and probably around the world). Many dealers are faced with the incredibly frustrating scenario of seeing many of the customers who do want to buy a car unfortunately not being able to because they can not secure an auto loan. According to an Automotive News survey, car dealers are reporting that they are having difficulty getting car loans for both people with good and bad credit.
As a car shopper I strongly encourage you to consider checking and potentially lining up a line of credit before approaching a car dealer. This can be used as a powerful bargaining tool to ensure you get the best price possible. Additionally, if there is some sub-vented financing (below market financing like 0%) coming from the manufacturer you will still have access to it. Shop smart, be careful and you can save a TON of money!
Here’s a slight diversion from the usual car buying information for you. With the huge spike in gasoline prices people have been searching for relief and one source can be a conversion kit that allows your car’s engine to run on E-85 which is a gasoline ethanol blend (85% ethanol – 15% gasoline). The good news is that if these conversion kits are installed properly they work very well. One potential downside is the fact that you will see a decrease in your MPGs (miles per gallon). This decrease could be as high as 20%.
So to see a financial benefit to installing an E-85 conversion kit you need to be able to buy E-85 for at least 20% less than gasoline. Although one could argue that if the cost for E-85 is only slightly less than or equal to the cost of regular gasoline it is still better to buy E-85 because of the significant decrease in pollution it generates. So if E-85 is available in your area and you want to install a conversion kit give it a shot, I hear they work well!
With only eight days left to this month new car sales may hit an all-time low. I have my ear to the ground and I am hearing that dealers that regularly sell 300 cars a month are now selling only 100. Dealers who typically sell 100 cars are only selling 40 units now, it’s really bad! For virtually every brand month-to-date sales are below anything anyone can remember.
The good news for you is if you are going to start or are currently negotiating with a dealer hold tight to your price, they are starving for business! Any serious buyer who walks into a car dealer over the next eight days will find a dealer willing to do anything possible to make a sale. Do your homework and shop smart because you are in the driver’s seat now!
On September 12, 2008 Bill Heard Chevrolet, a huge 13 store Chevrolet mega-dealer throughout the South and Southwest closed it doors. This gigantic dealer went out of business because of a combination of the following: poor Chevrolet sales along with mounting legal problems associated with a rampant practice of selling cars using illegal and unethical practices.
Apparently Bill Heard dealers were operated illegally from the top down. If a fraction of the allegations against Bill Heard’s operation are true no one should shed a tear over this auto group’s demise. They robbed and mistreated countless innocent people.
But General Motors feels that the huge dealership Bill Heard built in Scottsdale is too valuable a piece of real estate to give up so they are hoping a new dealer will take the Chevy point. My problem is I have found that once a location gets the reputation for being a bad dealer regardless of who owns buys the spot they all end up doing shady or illegal business. I’ve seen it happen. So I urge my readers in the greater Phoenix area to be very careful doing business with whomever takes over Bill Heard’s old store.
As America goes through these topsy-turvy times you the consumer must be extra vigilant or suffer serious financial damage. For example, some people in the St. Louis area need to be careful buying a Chevrolet or used car because the person selling it to them might not have the legal right to complete the sale. Here’s the details, Feld Chevrolet has closed and cleared its lots. GMAC, General Motors lending arm has filed lawsuits against the owners of Feld Chevrolet because they feel $8 million worth of vehicles and parts were sold in a manner that voided their franchise agreement. In other words, GMAC did not receive their money. You see, banks give loans to dealerships by stocking their parts departments and putting vehicles on their through something called floorplan and apparently that loan was not paid off by Feld Chevrolet. There are 188 vehicles in question, new and used.
To make matters worse, GMAC is also looking for 53 other vehicles or payment of $532,000. It seems Feld Chevrolet sold the 53 cars to Tieman’s South County Auto Center in Weldon Spring. GMAC has not received any response from their requests to obtain payment for these 53 vehicles so they are starting legal proceedings.
Unfortunately the big losers in this situation are going to be the poor people who end up unknowingly buying one of the 241 vehicles GMAC is unpaid on. Understand that GMAC is NOT going to let the $8.5 million disappear. If you happen to take ‘ownership’ of one of these vehicles from Feld Chevrolet, anyone associated with Feld Chevrolet or Tieman’s South County Auto Center GMAC will have something to say and don’t be surprised if they take their car back!
So how do you protect yourself? First of all, avoid at ALL costs buying a car from anyone I have named above. Additionally, if I was buying a used car or ANY new Chevrolet in the St. Louis area I would run a CarFax to protect myself. Hopefully, GMAC has put out a flag on every VIN number associated with this crime so a CarFax would alert you that the car you are considering buying is owned by GMAC and not the person trying to sell it to you! Be careful, shop smart!
As loyal readers of this blog know, title theft is a HUGE problem and it is something every car buyer needs to be diligent about protecting themselves from. Unfortunately this is something many people in Piqua, OH had to learn the hard way. Terry Stamper, owner of Stamper Auto Sales in Piqua has pleaded not guilty to 17 felony indictments.
Mr. Stamper pleaded not guilty to the following felonies: corrupt activity, tampering with records, theft by deception, defrauding creditors, two counts of theft and eleven counts of failure to deliver a certificate of title. Now everyone in this country is innocent until proven guilty, but for the purpose of this blog I will assume he is guilty to assist you in protecting yourself from this type of crime the next time you purchase a car. If at a future date I learn that Mr. Stamper is found not guilty of all these charges I will be happy to write about it in a future blog, unfortunately I doubt that is a story I will be reporting.
So what did he do? It’s really rather simple. Stamper Auto Sales is accused of not delivering titles on cars, delaying the delivery of titles and altering records, probably his own along with DMV and financial records. In simple terms he took peoples money and did not deliver titles properly. He would sell someone a car and not deliver a title, or delay its delivery. He would take a car in on trade and not pay off the loan that remained on the car. He would alter dates, names etc on documents to prevent or delay the need to pay money to individuals and or banks. If the allegations are true, Terry Stamper is a thief.
So how do you protect yourself? Simple, if you buy a car from a dealer make sure you get the title when you take delivery of the car. If you need to wait a few days or a week it could be for legitimate reasons but do not allow yourself to be man-handled into buying something that you do not have legal custody to when you deliver payment. Secondly, if you trade-in a car that has an outstanding loan alert the bank, write a letter to your state’s motor vehicle department and cc the dealer you just traded the car to. This should prevent you from having to pay money to protect your good name if you do business with someone like Stamper Auto sales!
Wildcat Mitsubishi of Tuscon Arizona and Ideal Automotive Group of Sierra Vista Arizona have had the ban lifted that prohibited them from selling vehicles to members of the Army. These two dealers received the ban because of numerous illegal and unethical infractions against members of the Army. I find this disturbing on several levels.
Why does Wildcat still sell Mitsubishis? If I ran Mitsubishi I would immediately pull my franchise from Wildcat or anyone who received such a penalty. I can not think of anything more embarrassing for an auto maker than to have their dealer banned from doing business with Army personnel. Shame on Mitsubishi!
My second question is, if they committed so many improper actions against Army personnel why are these companies not just put out of business? Shouldn’t the government put crooks out of business rather than just protect only a segment of the population from their crimes?
And finally, why would ANYONE, military personnel or civilians, EVER consider doing business with either of these companies? In my opinion you are crazy if you even consider walking into one of their showrooms! Why would you possibly buy a car from someone you know has committed illegal and unethical acts to previous customers? These people have show that they are crooks, buy your next car from someone else. To my loyal readers I strongly advice each and every one of you to avoid both of these dealers at all costs!