Last month's most popular vehicle searches at AutoBidsOnline reflect consumers' desire to take advantage of Cash for Clunkers / CARS:
2010 Ford Fusion 4dr Sdn Hybrid FWD (City: 36, Hwy: 41)
2009 Toyota Camry 4dr Sdn I4 Auto (SE) (City: 21, Hwy: 31)
2010 Honda Odyssey 4dr Wgn EX (City: 16, Hwy: 23)
2009 Toyota Yaris 5dr HB Auto (GS) (City: 29, Hwy: 35)
2008 Chevrolet Corvette 2dr Cpe (City: 16, Hwy: 26)
source: www.autobidsonline.com July Search Results
Tuesday, August 4, 2009
Thursday, July 30, 2009
Cash For Clunkers - Scary Thoughts for Dealers
I just saw an interview with a Dodge dealer in Michigan City. Like many franchised auto dealers, he has already taken in a larger number of "clunker" trades - 13 as of this morning. The report indicated there are many other dealers who have already traded for 30 or more.
Do you see the problem yet? There are plenty with the latest Congressional brainchild - but this particular problem is in the math.
Congress has allotted the CARS program one billion dollars to reimburse dealers for qualified trades. At an average of $4,000 per trade, that is a cap of 250,000 vehicles that will be eligible for reimbursement.
And while current averages are not yet known, assume for a minute our Michigan dealer’s 13 clunker trades represents the national average. If that is the case, multiplied by 20,000 franchised dealers, we are already 10,000 vehicles OVER the amount the program is scheduled to fund!
We still don't know how long it is going to take the dealers to get reimbursed. The window of "opportunity" here, if you can call it that, is huge.
So just how many dealers are already sitting on crap cars with $4,500 ACV's? There could be thousands.
How's that for scary?
In the end, Congress will probably just print more money but who knows for sure. They haven't gone out of their way to protect wrongfully terminated Chrysler and GM dealers.
Cash for Clunkers / CARS continues to be a mess.
I cannot wait for government run health care.
Do you see the problem yet? There are plenty with the latest Congressional brainchild - but this particular problem is in the math.
Congress has allotted the CARS program one billion dollars to reimburse dealers for qualified trades. At an average of $4,000 per trade, that is a cap of 250,000 vehicles that will be eligible for reimbursement.
And while current averages are not yet known, assume for a minute our Michigan dealer’s 13 clunker trades represents the national average. If that is the case, multiplied by 20,000 franchised dealers, we are already 10,000 vehicles OVER the amount the program is scheduled to fund!
We still don't know how long it is going to take the dealers to get reimbursed. The window of "opportunity" here, if you can call it that, is huge.
So just how many dealers are already sitting on crap cars with $4,500 ACV's? There could be thousands.
How's that for scary?
In the end, Congress will probably just print more money but who knows for sure. They haven't gone out of their way to protect wrongfully terminated Chrysler and GM dealers.
Cash for Clunkers / CARS continues to be a mess.
I cannot wait for government run health care.
Welcome Back GM
GM's announcement yesterday that they will get back into consumer vehicle leasing is great news. Even if it is only available on their luxury lines, it should spur action with the other captive finance companies and hopefully create a spark with independent banks.
Wells Fargo, Huntington and Fifth Third are three independent banks with a long history of vehicle leasing. Along with virtually everyone else, they suddenly exited the market about this time last year with a rash reaction to $4 / gallon gasoline and Chrysler, GM and Ford's mass exodus out of all or most of their previous leasing program.
The market is in desperate need for new lease funding sources - particularly with late model pre-owned. Unfortunately, most banks' risk managers have unfounded fear about pre-owned leasing (POL).
If they would think about it, a 36 month pre-owned lease on a 1YO vehicle poses LESS residual risk than the same vehicle leased a year ago for 48 months. Both vehicles will come off lease at the same time but the pre-owned lease encountered most of its depreciation under different ownership.
There used to be some legitimate concerns about existing equipment on a pre-owned vehicle - or lack thereof. However, Chrome Data and other vehicle configurators are mitigating much if not all of that risk.
I just don't get the banks' negative views on POL.
Regardless, GM's re-entry into the leasing market is good news. Here's hoping they learn from past mistakes and resist setting unrealistically high residuals.
Wells Fargo, Huntington and Fifth Third are three independent banks with a long history of vehicle leasing. Along with virtually everyone else, they suddenly exited the market about this time last year with a rash reaction to $4 / gallon gasoline and Chrysler, GM and Ford's mass exodus out of all or most of their previous leasing program.
The market is in desperate need for new lease funding sources - particularly with late model pre-owned. Unfortunately, most banks' risk managers have unfounded fear about pre-owned leasing (POL).
If they would think about it, a 36 month pre-owned lease on a 1YO vehicle poses LESS residual risk than the same vehicle leased a year ago for 48 months. Both vehicles will come off lease at the same time but the pre-owned lease encountered most of its depreciation under different ownership.
There used to be some legitimate concerns about existing equipment on a pre-owned vehicle - or lack thereof. However, Chrome Data and other vehicle configurators are mitigating much if not all of that risk.
I just don't get the banks' negative views on POL.
Regardless, GM's re-entry into the leasing market is good news. Here's hoping they learn from past mistakes and resist setting unrealistically high residuals.
Tuesday, July 28, 2009
More Insight on the CARS Debacle
Here's a good video report from JJ's AutoFinanceNews.net: http://autofinancenews.net/video/video/show?id=2192375%3AVideo%3A20602&xgs=1
CARS Mess Has Only Just Begun
As my grandfather would say, "The Federal Government could f*ck up a wet dream."
In their infinite wisdom, the EPA increased the combined MPG on certain vehicles last Friday. What impact did this have on buyers looking to take advantage of the CARS / Cash for Clunkers program?
Plenty as our buddies at Auto Remarketing Today reveal at: http://www.autoremarketing.com/ar/news/story.html?id=9804
In their infinite wisdom, the EPA increased the combined MPG on certain vehicles last Friday. What impact did this have on buyers looking to take advantage of the CARS / Cash for Clunkers program?
Plenty as our buddies at Auto Remarketing Today reveal at: http://www.autoremarketing.com/ar/news/story.html?id=9804
Sunday, July 26, 2009
How To Get Best Price For Your Next New Car
Massive rebates are coming into the market on the heels of the government's Cash for Clunkers (or CARS program). With dealers literally starving for new sales, now may very well be historic times for the new car shopper.
As you set about buying your next new car, you are probably wondering the best way to establish the true market value and secure the best possible price.
Edmunds.com has done very well with their True Market Value figures or TMV. There is also a new site www.truecar.com that can help as well.
Regardless, true market value pricing is important to know so you can set realistic expectations about how much your new car is really worth.
Set your price at AutoBidsOnline.com and let dealers compete to meet it. Compared to requesting a "free" quote, you can quickly see how AutoBids delivers much more competitive pricing than other car buying sites.
When dealers respond to your buy bid, you control the negotiation and spend zero time playing the dealer sales game. By knowing the true value of your car, you take the uncertainty out of the deal.
You may think that dealers will shy away from these offers, assuming that they can make more money selling to someone else. Of course, dealers are in the business to make money, so they are not likely to accept offers that equate to a loss for their dealership. But money is money. Even if you are only offering a small profit for your dealer based on the price you want to buy at, a speedy transaction is often well worth consideration for the dealer.
Additionally, AutoBids dealers know you are serious about buying now. They too grow tired of online tire-kickers much as you grow tired of all the dealership "games".
Our dealers are willing at competitive prices because they are assured of a quick turn. AutoBids deals require considerably less time than the traditional type of sale. When a dealer doesn’t need to spend time selling to you, their workload is significantly reduced.
So spend the time necessary to determine the true market value of your next car but submit it as a buy bid at AutoBidsOnline.com. You'll save a ton of time and get a great deal too.
As you set about buying your next new car, you are probably wondering the best way to establish the true market value and secure the best possible price.
Edmunds.com has done very well with their True Market Value figures or TMV. There is also a new site www.truecar.com that can help as well.
Regardless, true market value pricing is important to know so you can set realistic expectations about how much your new car is really worth.
Set your price at AutoBidsOnline.com and let dealers compete to meet it. Compared to requesting a "free" quote, you can quickly see how AutoBids delivers much more competitive pricing than other car buying sites.
When dealers respond to your buy bid, you control the negotiation and spend zero time playing the dealer sales game. By knowing the true value of your car, you take the uncertainty out of the deal.
You may think that dealers will shy away from these offers, assuming that they can make more money selling to someone else. Of course, dealers are in the business to make money, so they are not likely to accept offers that equate to a loss for their dealership. But money is money. Even if you are only offering a small profit for your dealer based on the price you want to buy at, a speedy transaction is often well worth consideration for the dealer.
Additionally, AutoBids dealers know you are serious about buying now. They too grow tired of online tire-kickers much as you grow tired of all the dealership "games".
Our dealers are willing at competitive prices because they are assured of a quick turn. AutoBids deals require considerably less time than the traditional type of sale. When a dealer doesn’t need to spend time selling to you, their workload is significantly reduced.
So spend the time necessary to determine the true market value of your next car but submit it as a buy bid at AutoBidsOnline.com. You'll save a ton of time and get a great deal too.
Wednesday, July 22, 2009
Cash for Clunkers Set To Disappoint - BIG TIME.
And it's going to be a real pain for all involved. Why you ask? Afterall, there is great anticipation of the program's official launch on Friday 7/24 and there is plenty of information on the web explaining how it will work.
Yet most consumers believe they are going to get some kind of voucher they can use when they trade in their "clunker".
Unfortunately, this is a big misconception. The program is only going to benefit those whose trade-in value is worth less than $4,500 (or $3,500 in some cases). Far less in reality.
I want to repeat that.
Unless your trade is worth LESS than your tax credit, Cash for Clunkers (or CARS as it is now officially called) won't add up to anything more than a hill of beans.
I had my "aha" moment last night talking with well known auto industry expert David Ruggles of AutosAndEconomics.
According to Ruggles, you've got to look at the program from a dealer's perspective to truly understand it.
When a dealer takes a trade, he bases the trade-in credit for what he can resell it for to another pre-owned buyer. Most who qualify for the program are not thinking about this very important aspect of the business. And unless we get the word out, the dealer is going to take the blame.
Here's a simple example that Ruggles posed that made it crystal clear:
Let's say you have a 2000 Dodge Caravan that qualifies for CARS and has a trade-in value of $4,500. You go to the dealer expecting to get $4,500 for your trade PLUS your handy little $4,500 "voucher" from the government. You'll get $9,000 for your trade, right?
WRONG.
The dealer cannot resell your Caravan and recoup the $4,500 you wanted him to give you for your trade. This is because CARS requires the dealer to SCRAP your Caravan.
So the typical customer goes to the dealer thinking he's going to get $9,000 for his trade when in reality he's only going to get $4,500. Most customers are going to be really pissed and blame the dealer when it's not the dealer's fault at all.
The only real beneficiaries of the program are going to be those who truly have a "clunker" that has no significant market value.
Given the state of the current economy, Cash for Clunkers is generating a buzz that I've never quite seen before. Consumers and dealers are all chomping at the bit to take advantage of it but few really understand how its going to work.
Yet most consumers believe they are going to get some kind of voucher they can use when they trade in their "clunker".
Unfortunately, this is a big misconception. The program is only going to benefit those whose trade-in value is worth less than $4,500 (or $3,500 in some cases). Far less in reality.
I want to repeat that.
Unless your trade is worth LESS than your tax credit, Cash for Clunkers (or CARS as it is now officially called) won't add up to anything more than a hill of beans.
I had my "aha" moment last night talking with well known auto industry expert David Ruggles of AutosAndEconomics.
According to Ruggles, you've got to look at the program from a dealer's perspective to truly understand it.
When a dealer takes a trade, he bases the trade-in credit for what he can resell it for to another pre-owned buyer. Most who qualify for the program are not thinking about this very important aspect of the business. And unless we get the word out, the dealer is going to take the blame.
Here's a simple example that Ruggles posed that made it crystal clear:
Let's say you have a 2000 Dodge Caravan that qualifies for CARS and has a trade-in value of $4,500. You go to the dealer expecting to get $4,500 for your trade PLUS your handy little $4,500 "voucher" from the government. You'll get $9,000 for your trade, right?
WRONG.
The dealer cannot resell your Caravan and recoup the $4,500 you wanted him to give you for your trade. This is because CARS requires the dealer to SCRAP your Caravan.
So the typical customer goes to the dealer thinking he's going to get $9,000 for his trade when in reality he's only going to get $4,500. Most customers are going to be really pissed and blame the dealer when it's not the dealer's fault at all.
The only real beneficiaries of the program are going to be those who truly have a "clunker" that has no significant market value.
Given the state of the current economy, Cash for Clunkers is generating a buzz that I've never quite seen before. Consumers and dealers are all chomping at the bit to take advantage of it but few really understand how its going to work.
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