Hot off the lot
Published 12:00 am Sunday, March 29, 2009
NATCHEZ — Brad Yarbrough still sees cars driving off the lot at Natchez Ford Lincoln Mercury, but now more of those cars lack that new car smell.
Yarbrough, owner of Natchez Ford Lincoln Mercury in Natchez and Performance Dodge Chrysler Jeep in Ferriday said he sells about twice as many used cars as he does new nowadays.
“We see more people coming in asking for used cars more than new ones,” Yarbrough said. “The result is used cars are actually becoming more valuable and difficult for dealers to get. There is a lot of demand for a good used car.”
But that hasn’t always been the case. Yarbrough said, at the height of new car sales the ratio was more even.
“It was probably one to one at that time,” he said.
For Yarbrough, the reason for the increase in used car sales is simple — people are scared to buy. He said even if a buyer comes in looking for a new car, they are likely to drive off the lot in used model.
“We are seeing a lot more general interest in used cars,” Yarbrough said. “People who are coming in and looking at new cars end up gong to the used (cars).”
Rick Ricker, general manager at Southland Mazda is Natchez is seeing much the same trend as Yarbrough. He said as new car sales slowed over the last year, used car sales stayed “steady.”
“When everything took a hit new and used cars (sales) slowed down, but used car sales stayed more stable,” Ricker said. “They aren’t excellent by any means, but they stayed good.”
But Ricker said it seems that times may be changing since he has seen an upswing in business in the last two months.
He credits that change to an improved comfort level for potential car buyers.
“People are just getting over the scare,” he said. “They are getting more accustomed to the times.”
But, Ricker said, buying cars now isn’t as easy as it used to be. He said because of stricter lending rules, financing isn’t readily available for anyone.
“One of the main problems we are having now is not with customers buying vehicles, it is with the people who are lending,” Ricker said. “That effects people on the lower end all the way up to the highest end (in terms of income). Lenders are asking questions to people who have perfect credit that they never used to ask.”
Rickers said, despite the credit struggles, he is optimistic on the future. He said sales have started to look up and fellow car dealers are beginning to have a little more bounce in their steps.
“I was in Baton Rouge at a function with a large number of other dealers, and everyone there was very excited about the market,” Rickers said.
Kenny Jackson, general manager at Great River Nissan in Natchez said he has experienced a slow down in the number of feet on the lot, but said so far his used car sales have stayed strong.
“Our used cars are doing good, but new car sales are off a bit,” Jackson said.
But he said, for his lot, used cars have always been stronger than new. He estimated the sales ratio of used cars to new car to be two to one.
“That has always been our trend,” Jackson said.
Jackson said, getting people on the lot is only half the battle. He said even if a customer finds a car, new or used, Jackson often struggles to find a lender.
“There is just a lack of available financing out there,” he said. “There are loads of people that will tell you they can get anyone approved, but that isn’t necessarily true.
“Anyone can get financed with a big enough down payment, but it isn’t as easy as people say.”
But for those who are ready to buy, Jackson said now is the time.
“It is definitely a buyer’s market right now,” he said.
For some used car dealers, the roller coaster market has been too difficult to deal with. That’s the case Johnnie Donald, owner of Donald’s Car Corral in Vidalia.
“I do have a lot, but I haven’t bought a lot (of cars) this year,” he said.
Donald said his concern with the stability of car sales made him seek other ways of supplementing his income. He said he is now focusing more on the rental business than selling used cars.
“I’m being a little bit more careful because of what I’ve heard from some of my friends in the business,” Donald said. “They just aren’t seeing the sales.”
Steve Whittington, general manager and vice president of Whittington Auto Sales in Natchez said business is strong at his lot, but that is a change from just a few months ago
“We’ve been in business for 56 years and the last quarter of 2008 wasn’t good for anyone,” Whittington said. “But that is changing now. People are looking to buy a quality pre-owned car because it is a better value for them right now.”
Whittington said he specializes in low mileage cars and doesn’t refer to his cars as used.
“We call them pre-owned because that is what they are,” he said. “All we have are low miles, in the teens and 20s, non-smokers, with no paint or body work and full condition reports.
“They are basically perfect.”
He said he buys cars with low miles because they still have a warranty in place that in turn provides “no maintenance risks” to the buyer.
He said selling only the best quality car is what has kept the dealership strong for over 50 years. He said he often sees buyers who could afford new cars but “like the value a pre-owned car provides.”
“People who buy cars from us get a quality car and can put $10 or 15 thousand back in their pocket,” Whittington said. “That is important to someone who has a kid in college or just lost 30, 40 or 50 percent of their portfolio.”