Everyone is looking for a little used car
Searching this spring for a small, 25-miles-per-gallon, three-year-old car that has been "used" only by somebody's painstakingly careful grandparents? Well, you're not alone.Thousands of Americans now want the same thing -- especially this spring auto season, when money is tight and the price of a compact looks like the price of a Cadillac.
Used-car sales are expected to blossom soon, according to auto industry analysts around the United States.
New economic pressures are forcing families that would usually buy new cars to look for used ones, says Donald Descenza, an auto sales analyst with the respected brokerage research firm of Donaldson, Lufken & Jenrette Inc.
However, rising interest rates on loans and the higher and higher price of gasoline have put a damper on used as well as new-car sales in recent months, according to auto industry analysts.
Until recently used-car sales "followed just about the same trend as new-car sales," says Bob Cook, general sales manager of the Chevrolet division of General Motors Corporation. "But we anticipate an increase in used-car sales as we head into spring.
The "big three" US automakers -- General Motors, the Ford Motor Company, and Chrysler Corporation -- reported sales of new American-made cars down more than 13 percent for February, compared with the same month in 1979.
But Mr. Cook and others are optimistic that new-car sales will do much better in coming weeks. Mr. Cook says this is because there has been "a lot of postponing of buying" in the past year.
As to used cars, at the end of December Chevrolet dealers had an average used-car inventory of "49 days," Mr. Cook told the Monitor. By now, he says, this inventory probably has been cut to 30 to 40 days' supply of used cars.
Hertz Corporation (car rentals) expects to sell about 10,000 more used cars this year than last -- nearly 50,000 vehicles -- company sources say.
With demand going up, used-car prices will be high, particularly for the smaller foreign and domestic ones, analysts say. "A two-year-old Toyota is almost going for the same price as a new one," Mr. Descenza declared.
Good used cars are more plentiful when new cars are selling well, says Luke Bowyer, owner of Bowyer Motors in Savannah, Ga. Thus, with new-car sales down, fewer trade-ins will be showing up on the used-car lots, and the prices will be up.
People also appear to be holding on to their old cars -- some call them "clunkers" -- for longer periods of time.
A spokesman for the Travelers Insurance Companies, one of the nation's largest auto insurers, says, "We are insuring more older cars than ever."