Daily Auto News No One is Buying Used Cars, Either
Daily Auto News
The credit crunch is not just punishing those who sell new cars. Used car sales are declining as well.
The AP reports, “Auto retailer CarMax Inc.,” America’s largest retailer of used cars, “said Friday it swung to a $21.9 million loss in the third quarter due to slumping sales and loan loss write-downs in its auto finance arm.” The company “said that same-store sales, or sales at stores open at least a year, tumbled 25 percent during the quarter.” Not only did CarMax sell fewer cars, it also made less money on the cars it did sell. “The average selling price of its used vehicles declined 7.4 percent due to industrywide decreases in used car price.”
CarMax’s experience mirrors what smaller dealers are seeing. In a separate story, California dealership owner Tom Finegan told the AP that his “new car sales are down 40 percent, and he’s even having trouble moving his stock of used cars.”
Isabel Munguia, a dealer at Arlington, Texas-based Classic Buick-Pontiac-GMC told the Ft. Worth Star-Telegram that financing is the issue. In August, she sold 23 used cars. Yesterday, “she saw exactly one prospective customer.” She said “She has a drawer full of paperwork from deals where the finance department could not arrange a loan.” With new car sales declining, fewer cars are being used as trade-ins on new deals, so used car dealers have fewer vehicles to sell.
It’s more important than ever to polish up your credit score and know how to get a good deal in a down market.
And in some cases, it may be easier to qualify for a new car loan than a used car loan.
Many new cars are now available with deep discounts. Research the best car deals available in this market.
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