Most dealerships across the country have benefited greatly from the federal “Cash for Clunkers” program. Car sales have been up by double digit percentage points and Ford has seen sales numbers reminiscent of years past. A dealership in Austin, Texas may have put the “kart before the horse” or should we say the car before the cash!
An Austin Ford dealership participated in the program and as a result fears it will be left with over $180,000 in unrecoverable government rebates. The dealership became alarmed when there were talks of the program running out of money, but the “damage” was already done. What was their brilliant solution? They began to call customers and ask them to bring their brand new cars back.
“Buying a vehicle from a used car lot may be more beneficial in the long run for today’s average consumer.”
Is this the customers fault? The customer is not responsible for the poor planning of the dealership. In addition, these cars are now in the customers’ names. The dealership sold about 40 cars under the program, but none of their trade in “clunkers” have been approved. They have vowed to fix the problem by getting “clunkers” pre-approved before the customer signs on the dotted line now.
Some dealerships in Austin have quit the program all together until they see the way the Senate is going to vote on the issue. Used car lots are beginning to look better and better. Actually, buying a vehicle from a used car lot may be more beneficial in the long run for today’s average consumer. The terms of the loan are lower, and the credit requirements are more lenient.
You can drive a luxury vehicle for less than half the cost.
Many used car lots now have what is called in-house financing. This type of financing means the dealership will carry the loan for you to full term. These loans are usually only granted for between 24-36 months. Typically, these used car lots will also require the following things in return:
1. At least 10-20% down on the vehicle
2. Proof of income
3. 5-10 references
4. Proof of residence
5. Proof of insurance
If you can provide all of the things listed above, you can drive away in a nice vehicle with less headache. These type of car lots are also more beneficial to the entrepreneur and small business owner because:
1. It helps you to build business credit (many of these dealerships report to the credit agencies)
2. They are more lenient on payment dates
3. You can drive a luxury vehicle for less than half the cost.
The only downside to purchasing from a used car lot is the vehicles will have higher miles and there are no warranties. You basically are buying a vehicle “AS-IS.” Do not let this deter you. Many used car lots are members of the Better Business Bureau and although there isn’t a written warranty, they are concerned about their reputation. When purchasing a used car look for the following:
1. A Better Business Bureau membership
2. Find out how many complaints have been filed against them
3. Make sure they have on site mechanics because this means, in most cases, they have resolved any major issues with the vehicle
4.Look for family owned businesses with a long history in the community because they have more of a stake in their reputation
5.Find out how much repeat business they have
If you follow these guidelines a used car lot may be a more favorable option for you instead of the “cash for clunkers” program. You may ask,”How am I going to get my down payment?” This is easy. To participate in the federal program, your car has to be worth the rebate amount. Why is this valuable information? You can sell your car on Craigslist.com for the retail value, buy a new car, and possibly have money in the bank. Get your own “cash for your clunker”!
