Automotive Industry Numbers Up
We recently spoke with a mechanic at a Rockland County used cars dealership who knows firsthand the ups and downs of the auto industry. He’s been a mechanic since 1993, and has gone through some very rough periods. But he’s noticed some positive signs lately, and he’s keeping quite busy. For one thing, consumers keep their cars much longer than before, so there is a lot of repair work to do. The average owner keeps his car for at least six years, and many try squeeze 15 or 20 years out of their vehicles. As they say in the movies, it isn’t the age, it’s the mileage.
As Detroit starts to recover, more people are starting to buy new cars and trading in there used ones. It’s a good time to buy a used car because selection is quite good. Many new-car dealerships have been running special deals to move their product, supplying a larger market of used cars. A good used car dealer will steer you to a well-maintained vehicle and offer reasonable warranty coverage. A new car buyer has to prepare to make monthly payments on his auto loan, and keep making payments for four, five or more years. Used cars are considerably less expensive and thus require less of a financial commitment. Used car dealerships are set up to handle financing at good rates, and may offer discounts on extended warranties or future maintenance costs.
We know a fellow who recently sold his new Korean car and bought a used Detroit model. His reason: the new car was a lemon, and he was turned off by his treatment at the new-car dealership. He had to go to arbitration to resolve the issue – eventually, he returned the car and got all of his money back plus a 50 percent punitive award. He banked most of the money, using just some of it to buy a three-year old domestic car, which so far has been a creampuff. He felt good about the outcome, in that he was getting a car that handled like new but avoided paying the immediate depreciation that occurs when you buy a new car. It is experiences such as his that may be driving the hot used-car market. It is also nice to see Detroit making a comeback after decades of challenges. Thank goodness President Obama decided to bail out GM and Chrysler – who knows what the economy would be like today had both manufacturers gone bankrupt?