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Check out this link from Newsweek:
Hirsh: Make Big Banks Pay for Financial Crash Newsweek Voices - Michael Hirsh Newsweek.com
Banks and Finance companies are rethinking their repossession strategy, the current financial crisis and lower wholesale values have prompted them to wait a little longer to pick up your ride.
As reported by MSNBC.com
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That Car Guy
With tightening credit markets and poor consumer confidence, the retail auto industry will forever be changed. In a market in which a perfect storm as some have described of recession aided influence, your local Chevy, Ford and Chrysler store will be hurt the hardest.
It is currently been reported that 1 in 5 car dealerships will be closing over the next 2 - 3 months, that is nearly 4,000 dealerships across the nation. A staggering number considering the number of employees those dealerships employ and the Real Estate involved with these closings.
It has long been known that sales per outlet for GM, Ford and Chrysler stores have performed way under same store sales as compared with import stores, especially Toyota and Honda. Industry consolidation has been put on the back burner because of product issues and cash flow for the manufacturer, so natural financial attrition has reared it's head and the stores in poor performing markets will soon be gone forever.
The financial bailout that is helping Wall Street will not help this situation and I believe most people want to keep people employed and this bailout does nothing for that. What this bailout does is keep the financiers in business while working class individuals will be on the unemployment line. This crisis is only the beginning of a slow down that has been in the making for quite some time, going back over 2 years. I want to say with clarity that the bailout will not loosen access to capitol to small business, the requirements will be fundamentally tougher as we move forward period. As a result of a continued decline in real estate values and low consumer spending for an extended period of time which will take a while to recover, I predict that a turnaround will take quite some time. We should start to see some stress reduced sometime in the third quarter of 2009 with the economy breaking loose in 2010. Primarily what will be the distress in the commercial real estate markets, which no one is talking about, since the emphasis on the current crisis is with residential markets, is the catalyst for the extended recession.
When you look at the amount of dealership real estate that will be on the market, some of the most one dimensional facilities in the market place in which there will not be another auto brand to take it's place, the real estate in those market places will be hurt considerably.
The silver lining will be that as always markets will return eventually and the consolidation that has been needed for the last several years will move forward, even if it is not voluntary.
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That Car Guy
I reported recently that the resale value of preowned used Chevrolets, Fords and Chrysler products would soon have dramatic increases in value. J.D. Power released its 10 used vehicles with the fastest-rising prices (May and June 2008) and low and behold look what popped up on the list among the Toyotas and Hondas. The good 'ol Chevrolet Aveo and Ford Focus, as the story indicated, these vehicles are flying off dealers lots and pricing is rising fast. It goes on to say economy models haven''t been big sellers for the past few years, car makers (domestic) have built relatively few of them.
As I said in my earlier report, all anyone has to do is the math, the Domestic output of fuel efficient vehicles has been low, now demand is high, simple supply and demand mathematics. The Imports will be less and the Domestic used vehicle values will increase as this demand continues to increase.
All of the sudden that Chevy Metro is worth some moola!
I really don't like saying I told you so, so I won't, however you folks should listen up, look at the great values on deals from the domestics and take advantage of them. I am not being pro Domestic or anything like it they have made major blunders in there product development and offerings to the public, but if you see a great value you should take it.
Lets see how the next reports look, maybe I will have to adjust my time lines, I will keep doing the math.
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Kevin Kimbrough
That Car Guy
Now I don't think for a second that someone at Toyota, Honda or Nissan has not at least considered what is taking place in the U.S. retail auto industry, yet sometimes everyone gets so focused on winning or being number one that they lose sight that sometimes your gains are temporary. The manufacturer in the best position in my opinion remains Honda, they don't get too caught up in being number one (in terms of numbers, quality yes) and there business model has been designed to have measured increases in market share. If they (import manufacturer) don't understand what is taking place here in the good 'ol USA, the import trade ins will be less... the import trade ins will be less! So the next thing that happens is deep, deep, deep discounting to move product off of dealer showrooms, value perception's start to change and buyers shift back to what is hot again. I think I see a Ford or Chevy in your future...
Some advice, take advantage of some of the crazy offers that the domestics have in play, 0% APR, the huge rebates etc... provided of course it makes since for you and your pocket book, you don't have to be afraid, you will be glad that you did, especially when you still have to pay full price or more for a import, you do the math.
Enjoy Today!Just caught a glimpse of a segment about car deals "Cracking the car buying code- online" ooooooo ahhhhhh.... on the Today Show and Regina Lewis an AOL Consumer Advisor "Internet Specialist" was the expert authority on car deals. Her whole insight was that she talked with a salesperson, this is the expert that was choosen and her research, background and technical expertise is based on a conversation with a salesperson, not the sales manager not the general sales manager not the general manager but a sales person.
I looked her up and she says she is an AOL consumer advisor, TV contributor, tech trend expert and host of DIY Network's Tech out my house, what I failed to see is any reference to the retail auto industry, but maybe she visited a service department, oh, oh, oh, she purchased a car before, yea that makes her an expert. Her expertise is akin to "I read a law magazine and it said do this in court", the assumption by Regina Lewis is that we should take her word that what she is saying is indeed fact, but she flatm out has her facts wrong, kind of like practicing medicine without a license, maybe not that far but she is no expert, although in this case she did talk with a sales person.
There is no code, there is no secret society writing script and policy for dealers to follow, only the manufacturers whims and fancies. Although I believe that a consumer advocate should have a voice, but there view points should be based on fact and I grow tired that consumers have so much information that guides and steers them in the wrong direction and there view points continue to raise anxiety and fear when a consumer visits a dealers showroom. Articles and broadcasts continue to perpetuate the notion that a car dealer is withholding something, all because a consumer advocate who passes themselves off as an expert says, this is what a consumer should expect when they visit a showroom and when it doesn't happen, because it can't happen the dealer is the villain. When in fact the information was wrong.
Case in point, Regina Lewis says that "Location matters" her words: "Keep in mind, car deals often vary regionally, so when you're doing your online research, it's a good idea to type in multiple zip code[sic] (maybe an hour away or one state over). Could be worth the drive if the incentives are better."
FACT: There are regional, state, local and dealer ad group incentives, however they are geographically assigned by zip codes. if you do not live in the area in which the incentive is available, you don't get the incentive.... period, unless you lie and make up an address in a neighboring state and your taxes and paperwork is assigned to that new address and then you have to register and plate your purchase at your new address that you lied about and then you have to change your address and re-register and plate your vehicle and in some states you may have to pay the difference in sales tax possibly... OK, I think I made my point.
Regina Lewis presents this as an option when in fact it can't happen, however the car dealer is left trying to defend themselves and once again looking as if the are lying, because her expertise (using the term loosely) has created a bad experience for the consumer who is probably demanding the incentive that they can't get and does not understand why they can't get it because Regina Lewis said that they can get it...whew.
Regina Lewis states- "The real math"..."70 percent to 90 percent of customer rebates from car manufacturers trickle down as discounts to car buyers..."
FACT: 100% percent of customer rebates from car manufacturers trickle down to the consumer, if a dealer does not honor the rebate and keeps it as Regina Lewis is implying they would be in violation of there Sales and Service Agreement with the dealers respective manufacturer.
Regina Lewis states- "Going the eBay route"... "Many buyers feel they're paying $1800.00 less than the official Kelly Blue Book value of the vehicle (the industry standard for the going-rate of any given vehicle)
FACT: The key word here is 'feel'... a good deal is a state of mind and eBay much like any good sales tool creates an atmosphere in which consumers feel as if they WIN... I think this is eBay's new slogan... 'WIN it on eBay or something like that'. It doesn't mean that the deal they received was the best deal that they could have achieved somewhere else, perception is half the sales battle and many consumer oriented places go to great lengths to create the impression that they are the low price leader, when in fact they probably aren't. Regina Lewis goes on to state that Kelly Blue Book is the industry standard, in fact there are many books that are used to determine a vehicles value, NADA, Black Book etc... but a vehicles value to the dealer in which you are trading your vehicle looks at other criteria that is not in a book, a book is merely a guide, other criteria would be local auctions, and the dealers own success rate in selling a particular used vehicle. For instance a dealer who sells a lot of 2001 Ford F150's XLT's may be willing to pay a little more for your trade than someone who doesn't have a high demand at there dealership for that brand of vehicle, i.e the local Honda dealership.
I wholeheartedly believe that every consumer needs to do there research, however I tire of consumer advocates who continue to perpetuate half trues and false information that merely confuses consumers and further creates an atmosphere of distrust and anxiety between consumers and car dealerships.
If you choose to report on something please get the facts straight before you report, but of course it will take the major news bureaus and television news agencies to demand more from there experts but therein lies the problem, from what I see these agencies hire financial analyst, consumer advocates and other journalist, when in fact they should engage a real expert to report the facts in the respective field, particularly as it relates to the retail auto industry, I am continually amazed that these organization will continue to report on these automotive consumer issues and they do not engage the services of someone who has a background in the field, they would not do it in another field such as the medical profession or legal profession.
I would ask that consumers demand that they get the real answers to there questions not some watered down half true version from a non expert posing as an expert.
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