RESEARCH A CAR
Get invoice and market prices, specs, reviews and photos
GET A QUOTE
RESEARCH A USED CAR
Get used car pricing, reviews, ratings, and more.
|
|
|
|
|
|
|
|
|
| CNN's Chris Huntington takes a look at July auto sales and the popular employee discount incentives. (Aug. 2) |
Play video
|
|
|
|
NEW YORK (CNN/Money) -
Automakers are offering sweet discount deals to attract buyers to their showrooms, but if you're looking for a real bargain, head over to a used car lot.
A report published in USA Today Friday said soaring new car sales are swamping dealers with trade-ins, resulting in a glut of used cars that could deflate prices.
"I suspect all dealers will have the used car sale of a lifetime," Jerry Reynolds of Prestige Ford in Garland, Texas told the newspaper. The report said the number of vehicles on his used car lot hit 410 this week, up from the usual 250, which prompted him to start his own promotions.
As consumers take advantage of the employee discount promotions offered on 2005 models, dealers are taking in loads of trade-ins, the newspaper said. The program that gives buyers the same price that automakers' employees are offered was supposed to end Aug. 1 but were extended by a number of automakers.
In the report, Paul Taylor, chief economist for the National Automobile Dealers Association, said used car prices could drop as much as 5 percent from their recent peak after steadily increasing for more than a year.
There's already evidence of that trend, Tom Webb, chief economist for Manheim, the nation's largest wholesale auto action, told USA Today. He told the newspaper that prices in wholesale markets are heading south, down 1.2 percent from May to June.
Jerry Seiner, who sells General Motors brands and imports at four locations in Utah, said in the report that he increased used car advertising at the end of June to slash his used car inventory, which had doubled due to trade-ins. He sold 135 used cars last month compared with 71 in June in what was "probably our best used car month ever," he was quoted as saying in the report.
Sales at the Big Three automakers zoomed in July, largely due to employee discount incentive deals.
Taylor told the newspaper that about 60 percent of new car buyers generally trade in their current vehicles.
Used car sales could cut into new car sales, but automakers are hoping the effect is minimized by a strong overall market for both, according to the report. "It will wash itself out," Paul Ballew, GM's director of global market and industry analysis, said in the newspaper, referring to the used car glut.
The newspaper reported that buyers may get less for their trade-ins, but they will see more recent-model used cars.
"We're going to have big used car sales this month. We have to. We don't have anything else to sell," Jack Fitzgerald, who owns dealerships in Maryland, Pennsylvania and Florida, told the paper.
------------------------
GM and Ford are cutting prices on '06 models -- click here.
Can you imagine employee discounts on everything? Click here.
|
