The Used Car Business Isn't What It Used To Be!

The new car dealers would sell new cars and take used cars in trade. The new car dealer would keep the newest and nicest for resale and wholesale the rest either directly or indirectly to the used car dealerships. Generally they would keep 3 0r 4 year old cars with 50,000 miles or less, we would get the rest.

Several years ago the rental and lease companies started keeping their cars longer so they bought fewer new cars to become used cars. The banks started tightening up credit so very few new cars were being sold. In order to make a profit, the new car dealers started retailing older and higher mileage cars. I have heard of cars with 140,000 and 150,000 being offered at new car dealers used car lots. Pretty much a car that will pass a basic safety and emission inspection will be kept for resale.

Add this to the fact that very fewer new cars were being sold than were being scrapped because of wrecks and breakdowns. The add the "Cash For Clunkers" program which took 500,000 cars off the road for good. Most of which were in running and driving condition. I would love to have most of those cars to resell today.

Thc program also pushed car buyers to trade earlier than they normally would. Maybe someone wasn't thinking about getting another new car for a couple more years, but because of the program he already did it. Most people who are buying a car today is not because they really want to, it is because something happened to the one they had, and they have to replace it.

There are just fewer cars on the road period. I left work yesterday at 6:30 and drove home on the surface streets rather than the freeway. When you are driving on a major street at 6:30 in the evening and there aren't more than 3 or 4 cars waiting for the light to change it is an odd feeling.

The government tried to help us, but the law of supply and demand works perfectly. That 4 to six year old car that is the mainstay of our inventory is in short supply. In fact we are paying almost the same for that car that we paid 1 year ago. this is backed up by Manheim Auto auctions who have more than 50 auto auctions in the United States. The thoughts are that the used car industry won't be back to normal for 4-5 years. This about the time the new cars being sold today will start making their way into the used car markets.