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Business is starting to pick up for many dealers

Incentives high, interest rates low, war over, spring here

The incentives are high. Interest rates are low. The war is over. And the springtime is here, which is always good.

That’s how Stan Crawford, general sales manager of Champion Chrysler-Jeep-Dodge in Gulfport, sums up the current car-selling market.

Car selling hasn’t been immune to the decline in the economy. Crawford and others interviewed said sales have been down from previous years. But things are starting to pick up.

“The end of the war made a difference,” Crawford said. “We’re also coming back into the summer sales season. People are buying. They are buying new trucks because the interest rates have gotten so low. They are buying Jeep Wranglers and Sebring convertibles. And they are buying late-model program used vehicles. The pricing makes them popular. Plus, they still have factory warranties and not a lot of miles.”

Crawford said that sales in the past year have been off from those seen in the previous five years. But towards the end of April, sales were picking up.

“Prices and incentives are better than ever before,” Crawford said. “When manufacturers really decide to move inventory, they can put on incentives to make that happen.”

SUVs are still very popular, but more folks are now opting for the mid-sized SUVs instead of the largest SUVs. Crawford said people are downsizing because they have found that the mid-sized SUVs provide plenty of room for cargo and people, but they are much less expensive to fill up at the gas pump.

“The utility is virtually the same,” he said. “You can get the same amount of stuff in the smaller vehicle. They are still SUVs, but they are good on gas mileage.”

Dill Briscoe, sales manager for Dees Chevrolet Olds in Biloxi, also said SUVs continue to be very popular. Briscoe said that while overall sales have picked up, they still tend to be somewhat sporadic.

One thing he identifies as a trend is secondary finance for people with credit problems.

“There is more and more of a demand for that due to the majority of our public having challenged credit,” Briscoe said. “Secondary credit companies help people who have had previous credit problems. We’re seeing more and more of those types of customers.”

Frank Pemper with Griffin Motors in Houston, agrees that the economy has had an impact on the purchase of big-ticket items like vehicles.

“I think money is a lot tighter than it was a year ago,” Pemper said. “We’re a Chrysler, Dodge and Jeep dealership. New car sales have been good because of all the rebates Chrysler has come out with. People are looking at rebates and zero percent financing realizing they don’t have to dip into their money to start out with a new vehicle.”

Pemper said the dealership, which primarily concentrates on trucks, carries a lot of program vehicles because that is what customers are seeking. They want a low-mileage truck at a good price that is still under warranty.

Billy Jack Ethridge of Bill Ethridge Lincoln-Mercury Isuzu in Meridian reports that sales are off slightly compared to two years ago. But new car sales are up compared to last year.

“We’re basically trending about the way the country seems to be trending at this time, which is a small percentage increase in new car sales,” Ethridge said. “In our case, we are seeing the upscale SUV still doing well including the Navigator and the new Aviator. Advertising for the Aviator just started in April. So far comment and reception has been good on it. We are not seeing that many people right now on the lower end of SUV purchases.”

Ethridge said full-size cars also continue to be popular at his dealership

“We have seen the full-size cars continue to hold their own because people are still looking for value in an automobile,” he said. “Comfort and safety are also important. In our case the Mercury Grand Marquis is the best selling automobile in its class. People are looking at maintenance issues, and realize that cars with rear-end drive and a front-end engine are less expensive to maintain over time.”

The Mercury Grand Marquis is popular in part because it costs less than it did 10 years ago. Ethridge said the car retails now for $18,999 compared to $19,999 a decade ago. It’s also more car for the money, he said, now coming equipped with more accessories.

Currently, leasing is not as popular as in the past. Ethridge said Ford Motor credit has backed away from putting incentives on leasing, putting the emphasis on purchasing instead. Ethridge said that is a simple fact of economics. Leased cars being turned in and then sold had too high residual value, and there were too many of the same model and year cars on the market — leading to depressed prices. Companies were losing money on the leased vehicles.

“I think it has affected a large number of manufacturers,” Ethridge said. “So they have made their lease lending values less appealing, and that affects the monthly payment. Most people lease because it is a less expensive way to have a car. With lease payments closer to purchase payments, leasing isn’t as attractive.”

Wally Purser with Paul Moak Honda in Jackson also said purchase is more popular than leasing at their dealership.

“The majority of Honda customers purchase,” Purser said. “We do a few leases. That has remained relatively unchanged.”

Purser thinks purchasing is so popular because Honda cars retain their value well. That makes it easy to trade up every few years without losing a lot.

As with other dealers, sales of SUVs remain high at Paul Moak Honda. Purser said the Pilot is a mid-sized SUV that is doing well. “We just about stay sold out of them all the time,” Purser said. “Then the new Element is geared to go after the younger buyer. It is a smaller utility vehicle that is very functional. You can fold the seat into a bed, and you can wash out the inside. It is made to go to the beach or mountains, wherever you want to go.”

Also well received is the Honda Civic electric-gas hybrid that gets close to 50 miles per gallon. Purser said people are impressed with how quiet and smooth running it is. “We haven’t had any complaints out of people who have bought those cars,” he said.

Van Trow recently took over the Mitsubishi franchise from Gray-Daniels Motors in Jackson. Eddie Boolos, general manager for Van Trow Mitsubishi, said initial sales activity has been brisk.

“They just announced zero percent for 60 months,” Boolos said. “But it looks like everyone would rather take the rebate, which is the smarter way out because you are paying less for the car. When you start looking at the finance charge from a local lender, payments end up being about the same. The rates right now are real competitive. Sometimes people look at the finance charge at local lenders and decide it is better to take the $2,000 to $3,000 rebate.”

Boolos said fuel economy seems to be a big driver for new car purchases. People are also concerned with safety. He said their small SUV has a five-star crash rating, and has been well received by the buying public.

Contact MBJ contributing writer Becky Gillette at bgillette@bellsouth.net.


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