Depressing article about retail auto dealers

[keepmine]

http://www.usatoday.com/money/autos/2008-10-20-auto-dealerships-credit-crisis-loans_N.htm

[chloe0724]

Maybe this will bring car prices back to a more affordable level.

[BK2008]

Doubt it. The cost of materials, labor, benefits, operations, shipping & delivery, marketing, profit margins,etc etc. drives how much a car is priced at.

I don't see the cost of any of those coming down soon.

[Scott50]

The loan approval rates for new automobile loans have gone from roughly 83% to roughly 63% from this time last year... Banks do not want to loan money to people they feel will have difficulty paying back the loans..

[BassBoy]

The loan approval rates for new automobile loans have gone from roughly 83% to roughly 63% from this time last year... Banks do not want to loan money to people they feel will have difficulty paying back the loans..

Not to mention, the banks are being very careful about loaning more than the vehicles are worth......so.......unless you've got money down, or you're able to beat down the dealer's asking price (for ex. used cars) below fair retail value, it's harder for even those with good to excellent credit to get financed or receive good rates.

[JRScott]

To me it is better for the bank to say no up front than for the person to have the car 6 months to a year and then the bank have to repossess it. It's better for the bank, and better for the consumer.

I know this means that there will be fewer new cars sold, but we have millions of used cars in the United States, in fact we have almost 1.5 times as many cars in the United States as we have licensed drivers.

I have two friends who work for car dealerships at church. I know its stinging them bad. They aren't in sales but it is hurting them.

[JRScott]

double post

[DM20]

The noon news just reported more layoffs for GM. Production is shutting down a whole shift of line workers in Ohio.

[Cali]

I agree. In the long run it works for both if it is done upfront the right way.

One of my good friends hubby is the VP of a large dealership here, he told me new sales are down some but used sales are better than ever.

To me it is better for the bank to say no up front than for the person to have the car 6 months to a year and then the bank have to repossess it. It's better for the bank, and better for the consumer.

I know this means that there will be fewer new cars sold, but we have millions of used cars in the United States, in fact we have almost 1.5 times as many cars in the United States as we have licensed drivers.

I have two friends who work for car dealerships at church. I know its stinging them bad. They aren't in sales but it is hurting them.

[treehugger1]

I found the following quote from the article interesting:

"That's if they're shopping at all. A poll done by WPP Lightspeed this month found that only 10% of Americans plan to buy a car in the next three months."

ONLY 10% of Americans plan to buy a car in the next three months? LOL So I guess we will only cycle through 100% of Americans in thirty months? Good Gawd! There is absolutely no reason that 10% of Americans should consider buying a new car in the next three months. I know of very few cars built in the last decade that won't run 150K - 200K with very simple maintenance. There is no reason that 10% of Americans should be considering buying a car in the next three months.

I'm gonna love the new economy!

[BigJohn]

I got a feeling where car dealerships will be making money is in service. The service area is a prime area for dealerships to rip customers off. So what I am saying is make sure you get everything in writing before they do work on the car, etc.

[Flamingo]

I got a feeling where car dealerships will be making money is in service. The service area is a prime area for dealerships to rip customers off. So what I am saying is make sure you get everything in writing before they do work on the car, etc.

You are correct - our dealership is making it enticing to bring your vehicle in by sending all sorts of coupons (i.e., $15 off any service, 10% off any service, etc., etc.). Never got these in the past and we bought our vehicle there new 2 1/2 years ago. However, it is cheaper to get the service done elsewhere as dealership "packages" run sky high and you don't need half the stuff they do in them and you can do a lot of it yourself. The problem you may run into is if your vehicle is under warranty and the vehicle not maintained - if something fails related to the covered part in the vehicle, they can deny coverage due to lack of maintenance on your end. They get you coming and going. We have general maintenace items done at local area shops - anything more major (i.e., transmission fluid changes or work done on other major areas besides oil/filter changes, tire rotation, etc.) we take to the dealership while it's under warranty in case something is warranty related and covered.

[HRx]

Promoting discounted services seems to be the new trend for car dealerships since sales have basically come to a halt. The average price of new cars are also out of control too which is digusting! It's a crying shame that a new Honda Civic can cost upwards of $20,000.

[banca rotta]

I agree with some of you that this will lower the prices of cars. I also agree that it's better for the banks to make less loans to those that can actually pay it back. Who knows this better then us.

I do pitty those in the industry from the dealers to the assembly line works, truckers, as well as the white collar people that run the company. Also all the local businesses that these workers support.

It's good for America in the long run but for now it will create a mess for these poor people. If you are in the business best of luck to ya!

[Overmylimit]

True; prices of cars are way too high, but just like everything else no one wants to take less for their labor, materials, delivery etc. I have a friend who is the service manager at a BMW dealership. He made over 150k last year. Now mind you this is the service dept not sales, he said he made more $$ than the sales manager. He's a friend but I even told him, with everyone at a dealership making tons of money and nobody will be buying cars something has to give.