March sales figures for new cars are going to be posted today. The bad news, Detroit's sales will slump again. This makes for great headlines but those who know Detroit aren't overwhelmingly concerned. Rental car and fleet vehicles are a market Detroit dominates and now they have cut these sales dramatically as they close plants. GM and Ford have produced fleet only vehicles at some point just for those customers, ie. Malibu Classic and Taurus. These vehicles were sold to keep the factory running and barely broke even if that at all. One of the best selling cars last year was the Ford Taurus, but you could not find one at your local dealer. It was fleet only.
The good news is that GM, Ford and Chrysler have put the brakes on dumping these discounted vehicles into fleets. For example, you can pick up a Ford Crown Victoria on fleet for about $19,000. Lowest price at the dealer, about $22,000. Guess what happens when that fleet vehicle goes to auction. Yup, it sells for about $13-14,000 and your dealer bought Crown Victoria isn't worth much more despite your higher purchase price. With fewer vehicles going into fleet markets, your vehicle retains more value on resale as there is a much smaller pool to pick from. Supply and demand.
But if you're in the market for a new car, the bad news. Used car prices are up dramatically. According to Automotive News in the March 26 edition, used car prices are on the rise. If you're in the market for a used car in the next nine months or so, buy it now. One example they quoted showed a 2007 Chevrolet Trailblazer going for $2000.00 more then a comparable 2006 model 12 months ago. This is the effect of fewer vehicles on the market.
For the past few years, the losses GM/Ford/Chrysler posted subsidized the used car market. Now the days of the subsidized used car is over. Get yours before it's too late.
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