Wednesday, June 24, 2009

Auto Market June 2009 Report

Alot has happened in the Auto Industry over the last 6 months, namely due to the bankruptcies of Chrysler and GM. In unprecedented action the Government bailed out both companies using taxpayer money. As part of this agreement Obama decided to give his buddies at UAW a large portion of ownership stakes in the Auto Companies.

I often wonder to myself what William Durant and Walter Chrysler, the original founders GM and Chrysler, are thinking from there graves. Did they ever think that there companies would need the complete assistance of the American Taxpayer to avoid financial ruins? It was frustrating and disturbing to see these American Icons begging for the Federal Government's assistance, I can't imagine what these Men would be thinking if they were here.

Where do we go from here? Do you buy a car from a company that is in effect being ran by Barack Obama? On one hand, GM and Chrysler dealers are unloading cars at unbelievable prices hoping fence sitters decide to buy now, but will these deals be enough to entice consumers to buy cars from a company that is in bankruptcy and whose affairs are being handled by people with no auto experience whatsoever? Or do you find yourself leaning towards a car company that is not in financial ruin?

I could very well be a Used Car "Homer" here and tell you to buy USED and avoid the hassles of new car buying, but I wouldn't be honest with you in what I am seeing for the short-term future of car buying overall.

NEW CAR: If you can afford a new car, I would advise you to look towards Ford in the Domestic Market. This promotion of Ford is somewhat by default, since they are the only Domestic car company that didn't take bailout money. I respect them for deciding to not take taxpayer money and riding out the financial storm on their own. Additionally, they have built some unique concepts of late that have done well in the marketplace.

If you are looking towards the Foreign Market (Please note that most, if not all, foreign automakers build there cars in plants based in AMERICA!) obviously Toyota and Honda have always been there as far as reliability is concerned, but you will pay premium price for them. My top recommendation is Hyundai/Kia. These companies were the first to offer the Assurance Purchase Plan if you lost your job, they still have the best warranties in the market, they are priced the most competively, and they just were ranked #4 in Reliability by JD Power.

USED CAR: I still firmly believe the best deals are to be had in the USED CAR MARKET. With the prices of new cars dropping so drasticly combined with the amount of REPO'S available on the market, it's forcing the price of Used Cars to never before seen low price levels. I am seeing cheaper prices at every auction that I am going to on a weekly basis. In that same sentence I am trying to do everything I can to pass on those LOW prices to my customers. I have priced every one of my vehicles at prices up to 50% off the retail value.

My advice is that if you are paying Kelly Blue or Nada Book value, you are paying way to much. OTIS

No comments: