Tuesday, August 16, 2011

Used car shopping with Rush Limbaugh

Recently, my family took a vacation to which a 2011 Dodge Caravan was rented to haul us across 3 States to our beach destination. I must admit I really enjoyed driving the Caravan and even thought about owning one as my family ages, yet the cost of a new vehicle plus the hassle of dealerships immediately came to mind.

And along with that thought, I remembered that a few weeks ago, good ‘ol Rush Limbaugh boasted that the reason new vehicle sales have become stagnate and used vehicle prices have gone up is because of “Cash for Clunkers” destroyed the market. There are simply less used vehicles on the market according to Rush.

This is completely ridiculous as many people took advantage of “Cash for Clunkers” and bought new fuel efficient vehicles in a time when gas prices were roaring skyward.

It was a program designed to get the oldest, destructive, smog polluting vehicles off the road. There were particulars a vehicle had to meet to be considered a “clunker.” It was also a program set up to help a struggling automotive sector.

What good ‘ol Rush is missing, or better, not reporting to his audience is that the American vehicle buyer and the Auto Industry has changed its ways from the behemoths of mid-1970’s and prior.

Around the mid-1970’s, the Auto Industry started making models to last longer. Gone were the days that every model year was a new design. People used to flock to the dealerships to get the newest design, but that ideology was crushing the imaginative designer and not to mention the profits of the manufacturer by constantly changing the factory specs for each new model year.

Just look at the 1978 Ford Mustang (top pic). That specific body design lasted close to 15 years, with subtle changes each year, until Ford finally redesigned it after the 1995 model year (bottom pic).

But Rush also missed the fact that “Clunkers” were not going to be resold, but sent to the scrap yard. These “Clunkers” were never meant to see pavement again and that the dealerships received a federal check to recoup the monetary lose on the sale.

The economy has a lot to do with low vehicle sales, both new and used, as well. Many people are holding on to their vehicles longer either because they do not want a large car payment or the banks are simply not providing loans as they once did (Just as banks are being stringent on small business loans).

I gather Rush is getting his information from Dealerships that sell both new and used vehicles, which he would be correct in the abysmal numbers. But there are many pre-owned dealerships that are doing well, mainly because they avoid banks and deal directly with the buyer.

We see these Independent lots scattered around towns and cities and many people used to avoid them for the product they sold was usually best known for “as is” category. Vehicles with incredibly high mileage, faded paint and hidden problems that the buyer is not told about.

But today, programs like CARFAX exist to help the buyer and make a majority of these Independent lots extremely viable.

These Independent dealers have changed their tunes and know that many people can’t afford to buy a brand new SUV or Mini-van, but if they can afford a used one with 40K and all the gadgets for less, people will buy.

There’s plenty of business out there and with today’s economy wreaking havoc on many credit ratings, no matter the economic status, people are looking for a deal. Many would love to buy a new Mercedes or a Lexus, so why not buy a used one and still feel good about it?

With a few keystrokes and a click, many can find ratings of used vehicles and decide which is best for them. Sure the new high school or college graduate wants a brand new car as a gift, but many are settling for mom & dads old Toyota Camry or Honda Accord for they know it will take them around campus or town when needed.

It’s no surprise that Consumer Reports 30 Worst used car listing, ranging from 2001-2010, that 80% of the cars listed are GM and Chrysler products.

But Americans aren’t just buying used cars to save a dollar, second hand stores from clothing to furniture to books are popping up everywhere simply because it’s the new market. Buy used and save cash.

Rush still believes in the American consumer, that the days of “spend spend spend” are still abound, yet Americans are watching their dollars, many are consuming goods less. Instead of buying the latest and greatest to compete with friends and neighbors, they would rather wait for the best deal to come around. Heck even Rush offers product deals on his show, but when it comes to his dislike for Pres “O” he forgets his promotional montages.

But hey, if Rush believes so well in the American Auto Industry, why does he drive around in a $450k German built Maybach 57s? Then again, I prefer Volkswagen over any other car I’ve owned, but that’s about $425K less then Rush’s taste.

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