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Gas prices affecting vehicle sales

Sunday, August 10, 2008 | 4:46 p.m. CDT; updated 6:23 p.m. CDT, Sunday, August 10, 2008

COLUMBIA - "FREE GAS." "FREE GAS."

The row of cars in the Saturn of Columbia dealership lot along Vandiver Drive proudly announce an attractive purchasing incentive to everyone passing by.

Buying a new car has never been simple, and the rise in gas prices since January has ushered in yet another concern for consumers. Columbia dealers and private sellers are responding to the shifting car market, trying to stay ahead of the national trends.

Another Columbia dealership, Joe Machens Ford, one of the largest dealers in Missouri, is offering employee pricing of up to $6,000 off new vehicles to attract buyers to its lots. Though owner Gary Drewing reported that overall sales are comparable to last year's numbers, he has seen a "pretty good trend" in the mix of vehicles that are selling.

"I would say your trucks and SUVs are off probably 30 percent, and on the other side, your cars are probably up just that much," Drewing said.

On Friday Aug. 1, truck producer GMC announced a second-quarter loss of $15.5 billion, its third-worst quarter ever, according to Bloomberg.com, since the company was founded in 1908. Kevin Towns, general manager of Columbia's Albert Buick-Honda-GMC, said he has seen a drop in sales of GMC trucks, but the downturn hasn't been as severe as national trends. Across the lot, however, Towns said Honda sales are "way up," estimating an increase in sales of about 25 percent from 2007. The 2008 hybrid Civic, for example, is outselling supply and Towns can't keep them in stock.

"We are putting people's name on a list, but there will be none available until probably October," Towns said.

For Drewing, the Ford Focus, which gets 24 miles per gallon in the city and 35 on the highway according to the Department of Energy's Web site, is closing in on his historically best-selling vehicle, the F-150 pickup truck. The F-150 gets 14 miles per gallon in the city and 18 on the highway.

"Our sales on the Focus have probably nearly tripled compared to a year ago," Drewing said. According to Automotive News Magazine, national Focus sales are up 21 percent from this time last year, and F-series trucks are down 11 percent.

Toyota-Scion and Honda lead the industry for fuel-efficient vehicles, according to the U.S. Department of Energy. Randy Wright of Macon recently stopped by the Albert Honda dealership to price out the new Honda Fit, which gets 28 miles per gallon in the city and 34 on the highway, according to the Department of Energy. Though he wasn't looking to buy, Wright said he anticipates replacing his 1999 Dodge Caravan by next year. For Wright, fuel efficiency is always important in a new car.

"I loved the (Geo) Metro. It got 50 miles per gallon, 45 with the air on," he said. "They could have had these trucks getting 25 miles per gallon by now, but they just haven't. I'm sure they will soon though."

Sellers in the used market are finding truck and SUV sales sluggish as well. Private sellers are being forced to drop their prices below Kelley Blue Book values in order to draw interest.

Rita Thompson and Rich Sternadori, both Columbia residents, used local classifieds listings to advertise their vehicles. The private party Blue Book price on Sternadori's 1997 Toyota Rav4 was $5,400. He was able to sell it in three weeks - after the price was negotiated down to $3,400. Sternadori said everyone who inquired about his vehicle had one main concern.

"Every single one of them were looking to get better gas mileage," he said.

Thompson's 1994 Dodge Ram pickup truck is currently advertised at $4,500. She has had it listed for over a year without any serious inquiries.

"I've dropped (the price) but it doesn't seem to matter," she said.

On the other side of these deals, the used dealers in town are able to buy up cheap trucks and SUVs and offer them well below market value.

J.J. and Donna Hill, who own Car Barn of Columbia, have 35 to 40 vehicles on their lot at any time, including a row of about 10 SUVs and trucks. J.J. Hill said though pickup sales have plummeted in the last few months, the SUV sales are up. He sold nine during one recent weekend.

"We're able to buy SUVs cheaper, because of gas prices," he said. "I bought a 2005 Chevy Trail Blazer, listed at $12,000 Kelley's book, for $6,000 on wholesale, and I can sell it for $8,496. Customers can buy for under what it retails for."

Hill speculated that SUVs continue to be popular because they can carry more passengers than pickup trucks.

Drewing said the used market has kept up at Joe Machens as well.

"The used car business is very good, especially if you can trade enough cars and buy enough cars," Drewing said. "You're still selling a lot of trucks and large SUVs on the used side. You can find some pretty good bargains and pretty good deals out there right now."

 


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Comments

al mar August 11, 2008 | 9:17 a.m.

For those of you who have purchased or plan to purchase a vehicle, please consider holding on to your sales receipt. You'll receive a tax appraisal from the assessor that will far exceed what you paid. Our assessor, Tom Schauwecker, is the only assessor in the State of Missouri who uses VIN #'s exclusively to value vehicles for appraisal purposes. He doesn't look at the market. Don't let bullying or intimidation stop you from receiving a FAIR assessment.

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