I love selling cars, the industry gave me a purpose after the shitty experience of being a corporate cog. But I’m truly starting to fear the worst for the American car industry.
The industry has shown growth since the dark days of the recession but the business model morphed into an ugly free for all.
Automotive credit has become easier in the last few years, and manufacturers are still seeking whatever growth they can come up with in our market at any cost.
People are buying cars they can't afford or shouldn't even have been able to buy. Used car depreciation is at an all time high for many cars and yet everyday more and more people are trading them in.
This whole scenario has a bleak end that became evident when I went to my buddy Paris’ repo lot. He called me to check out a 2016 BMW 435i he jacked for BMW Financial Services. It was a beautiful Estoril Blue M-Sport car with just under eight thousand miles on the clock. I could only imagine the circumstances where someone let go of a year old BMW, but as we walked through I noticed all of the cars seemed to be nearly new. Paris confirmed my fears when he told my about nine-out-of-ten vehicles he’s repossessed in the last few months were model year 2016 or newer. To make matters worse Paris only does work for prime and a few captive lenders, meaning a majority of these cars went out to consumers with good credit.
On the other end, every time I look up from my desk there is a customer who is absolutely drowned in their vehicle. Six thousand dollars in negative equity is the norm, but I’ve witnessed numbers as high as twenty thousand in the last year. Customers are always astounded by how their car has lost so much of its value so quickly. What they fail to realise is their car was worthless from the beginning. Rebates and incentives are at an all time high at many manufacturers, J.D. Power quoted an average around four thousand dollars earlier this year, and I’m sure that number has risen since then. The problem with high rebate numbers is it absolutely kills the resale value of a car.
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DelMarVa's Premier Source for News, Opinion, Analysis, and Human Interest Contact Publisher Joe Albero at alberobutzo@wmconnect.com or 410-430-5349
12 comments:
BMW is overpriced junk - thats half the problem. Buy a GM truck if you want resale value
Never buy new and drive what you have until the tires fall off then drive it more. Power of YouTube an average person can fix most vehicle issues at home.
Spoken like a true shorebilly. Don't hate because you can't afford one.
Gm is junk. Stole 10 billion taxpayer dollars only to disregard stockholders and warranties. If you want affordable quality go japanese.
Good grief.. how many months are we going to gin up the fear mongering on the car industry? Did you short a U.S. auto stock? Did a family member get fired from Ford or GM? Clearly their is an agenda here.
Yes buy gm, pay 40+ for a truck that our tax dollars paid for to,bail out and they still charge a ridiculous amount for... The reason the resale value is so high is because they know that pretty much every part had been replaced after 50,000 miles. Garage Mans Companion isn't just a tongue in cheek expression to describe these pos cars.. Lets not even go into their boasting in their car commercial about their JD power best in initial quality... That's an award for initially it being good but then turns into a steamy pile of scrap. Its a made up award its only covering the first 90 days... Any new car will last 90 days. What if medical equipment boasted the same thing or better yet medication... Yes sir your hip replacement received the JD Power initial quality award... So after 90 days we can't say it will work Any more. Real people not actors my arse
Bwaahaha!!! Our fleet vehicles are GM. Have to replace the transmission every 50k miles. Pure garbage.
Sounds to me that the car industry did this to themselves and now trying to talk their way (telling stories) to continued revenue.
Something tells me folks are biting anymore!!!!
My mother in law just paid $560 for a 1/2 mile tow, 4 sparkplugs and an oil change she didn't ask for. Won't be giving any of my money to the local Nissan dealership or any of the rest for that matter.
General Motors should have their name changed to Obama Motors. When you have to have a Black Friday event to sell your trucks with a 11-12 thousand dollar rebate, that should be a warning sign.
7:29 why didn't you take care of her yourself?
Bought a low mileage domestic sedan 2 years old for a fraction of the cost of new on the lot ( new 31k / used with 14k miles for 19k) - granted, it was a rare deal, but they can be found and better to save that money.
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