In Jan. 29 IssueBy Derek AaronTimes Journal Reporter
Russell County's new and used car businesses have seen varied sales recently amidst the current economic recession, according to local dealership owners and managers.
Four owners/managers gave their input this week on the county's current vehicle market and what they've recently been through as part of one of the country's most lucrative markets.
“Right now the past two months have been up, have been better than previous months for new and used,” said Lance Wade, manager of Franklin Pontiac-Chevrolet-GMC in Russell Springs.
He said General Motors was offering many new incentives and owner loyalty rebates, among other things.
Wade said Franklin's had an excellent variety of vehicles now due to the recent factory sales where dealerships were looking at getting new models out of their lots.
"It was the best time for us to buy and it is the best time to sell," Wade said. He said many people were now trading in their cars, rather than performing upkeep on them.
"We've got a lot of low-mile trade-ins at the moment," he said.
Wade said surrounding counties and around 60 automotive dealerships had been hit harder by the current economic situation than Russell County has been, so far
"In Russell County, if people want a car they find a way, whether it is through a credit union or a bank, or write a check," he said. Wade said a large part of their buyers were check writers, which are not financed.
"At least 50 percent of our car sales are not financed," he said. "People come in and write a check for it ... a prosperous county I guess."
He said while November was outstanding, December and January have been the best two months in the last 16 months. Wade said the dealership has around 700 new and used vehicles in their three locations and 200 at their Russell Springs GM location.
Because of the recent drop in gas prices down to around $1.70 gas, Wade said he has seen SUV's and large pickup sales rise again while last summer more economical, compact cars were being bought due to $4 a gallon gas.
Wade said the dealership hadn't had any negative impact trickle down from General Motors headquarters as they have received a large portion of bailout money from Washington.
"If people didn't come in here and ask us about the problems GM is having or we didn't watch the news we wouldn't know anything was going on," he said. "We are not blind and we do know about it but it hasn't affected us whatsoever."
"I'm sure there is going to be a down time for us sometime, but so far, so good," Wade said.
Don Smith, owner of Lakeway Motor Sales in the Middletown community, said his used vehicle sales were strong all last year until a slight downturn last month.
"In December we dropped off probably about 40 percent over our monthly travel rate of 70, but this month we're getting the traffic and the sales are right back up this month," Smith said.
He said there are probably not as many shopping as usual but the ones that are are serious buyers.
Smith said there was no formula to what people have been buying at his lot during the last few months.
"They're hitting all over the board, large 4-door trucks we've had sitting around have sold on out," he said.
Smith, who doesn't buy too many vehicles from auctions, said he buys most of his late models direct from leasing companies.
"People are coming into reality now," he said. "For the next 60 days I think (business) is going to hold pretty good but after that it depends on this national economic crisis, but I look for it to be a little slower travel rate throughout 2009."
As a bonus to his customers, Smith has been trying to provide more affordable vehicles on the market as people are tightening their spending budgets but still looking for a different vehicle.
"2008 was probably one of our biggest years in the 28 years we've been here and I'm looking at things positive for 2009," Smith said. "Sales and the economy is much better right here than it is in any of the counties around us, according to the dealers I've talk to."
Bobby Aaron, owner of Main St. Car Sales in Russell Springs, said his business has been off 50 to 60 percent recently.
Aaron's lot, a small operation on Main St., has been hit harder because it is not a "buy here, pay here" operation like many in the county.
"People are driving their cars longer, maybe an extra year," he said. "This recession has really hurt the car business."
With local banks tightening how much money can be borrowed or loaned toward a vehicle, Aaron said that, too, affected his business.
Larry Johnson, owner of G & J Auto Sales, said his business, too, has been affected. His lot is "buy here, pay here" and he said it was getting harder to buy used cars at the auctions because of the current market situation.
"But our sales have been about the same," he said.
In the used car business, an estimated 40 million vehicles are sold yearly in the country, that's three times the size of the new-vehicle market, according to published reports.
But buying used vehicles may help save money, they sometimes do come with their share of problems.
Used cars bought from independent dealers have again topped the list of annual complaints received by government-funded advice service Consumer Direct, it was announced this week.
This particular used car market drew 47,019 nationwide complaints in 2008 - up more than 12 percent from a year ago.