I recently took in a conversation about the same 'ol story that import values are better than domestic vehicles and that there friend is better off purchasing an import. Maybe now!, on some models, but what about when they want to trade there vehicle in 3 to 5 years. You see, blanket statements and comments without knowledge and understanding benefit no one, particularly when the person giving the advice has no idea or insight into what they are talking about, yet want to provide everyone around them with there advice and opinions.
This discussion led me to the understanding that in three to five years the trade in values for hundreds of thousands of vehicles will not be what they are now. GM, Ford and Chrysler have cut back production, Toyota, Honda, Nissan and other imports have increased production, in addition Toyota, Nissan, Hyundai, Kia and others have been selling vehicles to the rental car industry at record paces, while the domestics have cut back. Ah Ha, do you see where this is going, it doesn't take a rocket science degree to understand that there will be a supply and demand issue (economics 101) in the next few years and the domestics will rise again, almost like an NBA team (can you say Celtics) going into the tank, trim the roster add a couple of key players (vehicles) and win a championship.
Most people in the auto industry know that domestic quality is on par with the imports and in some cases far exceed there import competitors, yet the domestic manufacturers still do a poor job of communicating that fact. This perceived gap will decrease as more people have defected to the import players and they discover what is widely known throughout the industry, that the import you just purchased, has just as many or more recalls, quality issues, technical service bulletins issued because of minor problems and so on than the domestic competition.
Its coming, it will take a couple of years, but numbers don't lie, as a friend of mine always says, you do the math, the used vehicle value of imports in the coming years will plummet like a falling star. The domestic used vehicle values will once again rise up like a phoenix and shock everyone, except me, because I did the math, right here right now June 20, 2008.
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!Kevin Kimbrough
That Car Guy
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