This winter may be a good time to buy a new car.

[randomness]

Winter is usually a slow time for car dealers, so it's often a good time for a buyer to drive a hard bargain. This winter looks like it'll be even better than usual, because those dealers are lean and hungry.

From http://bigpicture.typepad.com/comments/2008/10/auto-sales-tank.html:

Auto sales, which were weak over the past 11 months, simply went into freefall in September:

• Ford Motor posted a 34% drop. Their truck and van sales fell 39%, SUV sales plummeted 57% and F-series truck sales dropped 42%.


• Honda reported a 24% decline in sales;


• Toyota U.S. Sept. sales drop 32.3%, light truck sales dropped 38%


• Lexus sales -- Toyota's luxury nameplate -- fell 37.7%;


• Chrysler U.S. September sales fall 33%


• Volvo sales slumped 51.8%;


• Porsche tumbled 45%;


• General Motors sales down 15.6% (better than the expectations of -26%)

According to the Detroit Free Press, the seasonally adjusted annual SAAR for the past decade has ranged between 14 million and 17 million vehicles. Since December, the SAAR has been in a free-fall, and September now looks like its going to hit 13 million annualized sales. Edmonds.com noted that the last time fewer than 1 million new vehicles were sold in a month was February 1993.

In a related Reuters story, a new study says that nearly 1 in 5 car dealerships could fail.

Comments

[awfief.livejournal.com]

OMG it's a crisis! how come Congress isn't bailing automakers out with [more] subsidies?

[evilmagnus]

They just did, didn't they? I vaguely recall GM getting a few billion in loan guarantees recently. Not that will stop Congress from giving them more... ;)

[r-ness.livejournal.com]

$25 billion, for both Ford and GM.

From http://www.reuters.com/article/ousiv/idUSTRE48Q2WI20081001:

President George W. Bush on Tuesday signed into law a mammoth spending bill to keep the government running until early March 2009 that includes a $25 billion loan package for troubled automakers.

The $25 billion loan package, the biggest federal subsidy for the auto industry since the 1980 bailout of Chrysler, cleared Congress last weekend when the focus was on the debate over the $700 billion financial rescue package.

[evilmagnus]

My not-sister-in-law has a Prius. Their dealership wrote them offering to buy it back for above it's Blue Book value - demand is so high that used Priuses (Prii?) cost almost as much as new.

[evilbunnymayhem.livejournal.com]

Mmm prices may fall and that's great if you're paying "cash"... as in the whole thing at once.
BUT with banks as they are- the loan rates are going UP UP UP.
It's the banks that need the boost, not the dealers. No ability to have loans, no cars being sold because the majority of people aren't buying em outright. So it's good- and it's really really really scary.
No one will be buying cars, houses or high priced items that require loans for awhile I'd bet... even with a bailout.
What troubles me is that despite how irritating it is that greedy irresponsible CEO's are getting off the hook with a bailout plan- is that the majority of people are only focusing on that fact- not the bigger picture. Without SOME sort of assistance, our economy is gonna bomb.
It's already headed there... hopefully those responsible will be held accountable- as in have to lose their high priced ticket items and pay large fines as opposed to a golden umbrella.
Put a freeze on all forclosures and develope payment plans people can actually y'know... pay. Better to have some money coming in, than tons of empty houses with no one to buy them because no loans can be given out.

[r-ness.livejournal.com]

prices may fall and that's great if you're paying "cash"... as in the whole thing at once.

I've never taken out a bank loan to buy a car, and I don't really intend to start now. I don't see what sense it makes to borrow money to buy a depreciating asset.

You might get me to take out a loan if I could use the other money in some productive way, or if there are tax incentives like there are when one buys a house, but not otherwise.

[meepodeekin.livejournal.com]

It sort of depends on how you think of the car. You are lucky to live where you live. Here, the car loan (and the gas prices) are simply one of the things that come out of your salary as necessary to have the job. Sort of like professional memberships, good work clothes, etc. Since every working adult must have one, and very few working adults have that much cash, there's really no other way of looking at it.

[r-ness.livejournal.com]

Hey, I used to live in Connecticut--both my cars are a vestige of that time--and I had to have one in order to get to work and back, just like where you are. Most of CT is suburbs, and as car-culture as anywhere else in North America.

But I grant you I think of cars differently from most Americans: I decided I could buy used, and keep for a very long time, rather than buy new and replace as soon as they started to require repairs.

[evilbunnymayhem.livejournal.com]

well I'm halfway between that... as in
I bought a car new so that I knew it's history, safety and as I don't own a house- well it's my investment. With a camry engine it'll last over a decade. So not going to dispose of it if it ever needs work- I'll simply take care of it. Better to know the devil than by someone elses.
BUT that being said I had 3 cars in 2 years (all used) so my experiences are bad ones.
Here in the burbs- well I agree with meepodeekin- it's a part of life.
Sure I could have a $1,000 car, but I spend days of my life driving from point A to B... and I don't wanna worry bout it on the side of some dark road one night alone. That being said- a new or even new-ish car... I could gather $2000 for a downpayment... but loans are a necessary evil. For me anyways.

[r-ness.livejournal.com]

I understand, it's a choice. I just want to make clear that different choice is possible. You do need to pick the right used car, though.

My $1,900 car doesn't look very pretty--friends make fun of it, and Homeland Security gives me trouble at the border when I drive it back from Canada--but I've put 220,000 miles on it in the last nine years. As for days of my life driving, and dark roads late at night alone: I just took it to Ohio and back, including driving over the Allegheny Mountains between midnight and 3AM. I'm hoping to drive it across the continent again soon. It rocks.

(My $1,000 car is still running but thirty years old. It deserves a rest from long-haul driving.)

To most Americans, I'm crazy. I'm comfortable with that.

[octopussneakers.livejournal.com]

I'd rather have a car I know and trust, even if it's older. I recently got a "new" car, and while on paper it is a better and more reliable car, I don't trust it as much. Old car- 95 escort close to 200,000 miles (affectionately known as putt-putt), my family was the firt owner, every two years or so (after the first like 8) it would need a major repair (transmission, brakes alternator), but it would give you plenty of warning, the last one of which I drove it around for a week while it told me to go to the garage, and it made it to the garage, the only time it ever broke down on the side of the road (3 miles from home in the middle of the afternoon) it was because my sister had ignored it's warning. My new car is a 99 camry which I just recently pushed over 50,000 miles, and I got from a relative, and I don't trust it. I don't know what sounds it's supposed to make and if that one is a sound unique to it, or not. Right when I got it there were a couple of problems because it hadn't been used much (or pretty much at all in the past 2 years). My parents didn't trust my old car on long distances, but it would have made it.

so back to the point; at least with a new car there's a period of getting to know the car where you know nothing is wrong so when it starts to make different noises you know if it is a problem. I see myself as someone who will buy new, but keep the car until it yells at me

[maggiebex.livejournal.com]

In my family, we always buy new cars, for cash. Then we take excellent care of them and drive them as long as possible. Instead of paying car loans, we put aside money for the next car to buy for cash, and we only buy what we can afford to pay for.

I got a '91 Honda Civic for my college graduation. Not an expensive, flashy car, mind you, but a good solid car that I knew would last. We just donated it to charity a month ago, 17 years later, and it still drove like a dream. We'd been putting off donating it for two years, we just could not bear to part with it. Now we're buying another Civic.

Yes, I realize that this plan requires initial capital, but if you can start on the path of buying cars for cash, you'll always be ahead of the game.

[meepodeekin.livejournal.com]

I completely agree with this plan. We have two cars. We bought them both new (a Subaru and a Honda) and have no intention of trading either one until it is absolutely ancient. We looked into used cars, but we didn't want an old used car and the discount on late model used versus new just didn't seem enough to be worth it. I intend to always buy new and then drive them into the ground.

That said, it's a pretty hard road to insist on buying for cash. We moved down here with one car (a gift from the 'rents) and had a week to find a second before a dire commuting emergency occurred. We were both in our first jobs and had minimal cash reserves. Then we paid off the 5 year loan, which had a perfectly reasonable interest rate, in about 18 months.

I just don't think this sort of situation is uncommon. I hope when the time comes we'll have cash for the next car loan, but with interests rates as they are we do a lot better on our money paying down our existing mortgage than saving cash for the next loan. That's basic financial sense. And what cash we do save often has to go to much more pressing needs than hypothetical future cars which could be as much as 10 years in the future. So while I approve in principle of paying with cash, in practice even with a pretty good income if you want new cars I don't really think it pays to store up the cash for a hypothetical car.

[irielle.livejournal.com]

Anton said there's still a waiting list for the Prius and that Toyota changed plans to open their new U.S. facility over from trucks to the Prius. As a new driver, I'm going to stick with our old Suburu Impreza until it begins to fall apart.

[r-ness.livejournal.com]

Yeah, I think that high demand for new Priuses is also why--as evilmagnus said--used Priuses are so expensive.

[evilmagnus]

Here, any Prius less than 5 years old costs the same as a new Prius (within 5%). It's either insane, or all those used Prii are going for a lot less than asking price.

[r-ness.livejournal.com]

It's insane.

Having said that, that makes me feel like I should have bought a used Prius a couple of years ago and then flipped it. :)

[liralen.livejournal.com]

Wow. That is interesting indeed.

[belfrynotes.livejournal.com]

My Camry has been puttering around just fine since, well, since the last recession. (It's a '91) Don't see replacing it any time soon.