Used Car News

I saw a Plymouth Sundance in traffic as I drove to work this morning. Since that model ended in the mid-90s, the car had to be at least 15 years old. Yet there it was, cruising along with all the newer vehicles. And it reminded me again that the car market relies heavily on the ability to cater to consumer whims. New-car drivers turn their vehicles every four years on average. They could easily keep them twice as long. And they will without the means (easy credit) and the motivation (signaling). There's good reason to believe 12 million is the "new normal."

At last spring's NABD conference, dealers asked where people would go if payday lenders were driven out of business by financial reform. They were looking for a way they may be able to fill the gap. I answered, "If people don't have payday lenders, they'll go to the Mob." And in Italy, that's what they're doing.

I received recently my regular report for the Social Security Administration that tells me how much I will receive when I retire. It includes my entire earnings history going back to my first summer job. This history illustrates the challenge facing the entire economy.

My adult working life showed a nice, normal progression of steadily increasing pay. Then came 2007, when the growth stopped. This wouldn't be a problem if all  expenses froze. But my taxable incoming started declining for a number of reasons, including higher health care costs. I don't know when or if the growth will resume. I fail to see how the increase in expenses will stop.

I'm in a better position than many people. But I'm in the same situation. If consumers only expect decreasing income, they'll avoid large, long-term purchases and will limit the amount they spend on those purchases when they make them. That's the opposite of what auto sales need for a revival. To put it in automotive terms, we're stuck in neutral on an incline.

According to an article in today's Financial Times, TARP's special inspector general blasted the White House for ignoring the impact on unemployment when it pushed GM and Chrysler to shutter thousands of dealerships. It questions whether the companies took enough time in its decisions and if the Treasury Dept. considered whether the costs to the economy outweighed the benefits.