Car dealers adjust strategies in response to green movement
In addition cutting the amount of time spent in their cars by carpooling, taking mass transit or just staying home, many drivers are putting their gas-chugging vehicles in park in favor of a fuel-efficient ride.
CarMax Senior Buyer Mike MacDougall said the used car superstore has seen a spike in people searching its Web site for fuel-efficient vehicles.
Curtis Owen, sales consultant at Metro Ford in Independence, Mo., estimates that seven out of 10 buyers at the dealership have gas mileage as one of the most important factors in their car-buying decision. Still, he said the auto market has not dried up -- just shifted.
“It’s not that the people aren’t buying,” Owen said. “It’s what they are buying.”
Owen said the Ford Escape Hybrid, a sport utility vehicle that gets 34 miles per gallon, has become a popular choice at the dealership.
“Interest in the hybrid alone has doubled in the last month,” he said.
Before the surge in gas prices and interest in hybrids, the Ford Escape Hybrid could be had at a discount price. Now, the Escape is going for more than the sticker price. The 2009 Ford Escape Hybrid scores a nine out of 10 on an Environmental Protection Agency measure of greenhouse gas emissions with 10 being the best, compared with the conventional model, which scores a six out of 10.
On the other side of the environmental line, the values of trucks and conventional sport utility vehicles has plummeted.
The showroom at Metro Ford is full of low gas mileage vehicles including sport utility vehicles and low gas mileage sedans. Owen said the dealership is set up this way because higher-gas mileage vehicles are moving so easily.
“I know I’m going to sell one Focus a day,” Owen said.
The Focus gets more than 30 miles to the gallon and is rated as one of the greenest vehicle choices by the EPA.
Owen said the dealership is offering all trucks at the employee discounted price with more discounts tacked onto that. He said he is regularly selling trucks at $10,000 to $13,000 below the sticker price.
“This is the best time to buy a truck,” Owen said. “There is never going to be a better price than right now.”
Owen said Metro Ford continues to accept trucks at trade-ins, though many are no longer accepting them.
CarMax is running “business as usual,” MacDougall said.
He said the business readjusts its prices daily for what it will buy cars off of consumers for and what it will sell them for. As sport utility vehicles and trucks have gone down in value, the company has had little trouble adjusting its buying and selling prices.
MacDougall said the most popular vehicles have been small imported cars with four-cylinder engines like Honda Civics and Accords.
Similarly, Owen said small used cars in the $5,000 to $7,000 price range have been the most difficult to keep in stock.
The used car market has suffered as a result of the downturn.
Kenny Hazard, owner of Blue Springs Sales, a used car dealership in Blue Springs, Mo., describes the market as a “trickle down market. We get a percentage of what the new car dealers get through trade-ins. If they’re not selling, we’re damn sure not selling.”