There Will Be Blood

Posted by P.W.R. in June 3rd, 2009

” Ayuh, storm a-comin’…”

Cold wind is blowing, change is in the air…

Your cliche’ (here).

Be very careful about leaping to conclusions as the next couple of weeks play out. Dealer incentives to sell vehicles and clear their lots will likely change in the next month significantly.

New vehicles that are deeply discounted ( or seemingly so) will likely depreciate equally dramatically, negating any real advantage to the buyer.

What may become available (and this is always something to watch for) are discounted interest rates on pre-owned vehicles. This can happen when the manufacturer needs to clear a lot in order to consolidate inventory, and depends on manufacturers being involved on the financing end of the biz.

These are called ’sub-vented’ loans, and are basically cash incentives to loan entities to encourage making loans easier to obtain. Put another way, these monies make up for the loss of the interest revenue.

They still have to do something with these vehicles–though today it looks as though they are going to simply shaft hundreds of long-time loyal dealers.

Hopefully, this will change due to some sort of outcry, but car dealers do not often enjoy much sympathy from the public–even though they contribute far more to their respective communities than do most other business entities.

These contributions often take the form of support for local arts, support for local and national charities, support for community improvements, and support for important local fund-raising events. Some of these dealers have been in business for decades, and the loss of these businesses represents perhaps the biggest tragedy of this current crisis.

For buyers, the ‘lay of the land’ will become clearer in the next couple of weeks. Resist the temptation to pull the trigger on your next purchase (if you love something, set it free…if it comes back to you…).

Watch this site for updates from the industry and other trend-watchers, and realize that the situation can only get better for the buyer now.

Research domestic pre-owned vehicles with 2 years of service and under 25000 miles (as always) and see what bargains are available now.

This is a basic tenet of CAR FU and something you should be doing anyway!