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Thursday, Mar 28, 2024

Used Car Sales, Repair Services Keep Sector Afloat

Sales of new cars have been on the decline both statewide and nationally for years now. The good news is that some dealerships and auto shops are reaping benefits from this downward trend, namely steady or increased sales in the used car sector and more demand in the service sector. “What we’re hearing is that used car sales are improving and that’s probably logical. Most may be relatively inexpensive when compared with a brand new car. Folks who are trying to make tough economic choices can afford 2005 vehicles, whereas they might not be able to afford a 2008 vehicle,” said Brian Maas, director of government affairs for the California New Car Dealers Association. At this point much of CNCDA’s information about the jump in used car sales is anecdotal with the organization expected to release an official report on the numbers in upcoming weeks. For now, though, representatives of area dealerships support CNCDA’s preliminary findings. Even in the midst of the financial crisis, used cars have been a major draw at area dealerships. “Our pre-owned business is very strong,” said Tim Smith, president of Bob Smith BMW in Calabasas. “Prices on used cars are going to be pretty attractive.” Smith attributes the strong sales at his dealership in part to the charm of the Mini Cooper, which is selling particularly well at the dealership. Maas, however, said that savvy auto dealers of all kinds are weathering the economic storm by increasing their stock of used cars. Doing so allows them to meet the needs of cash strapped customers. “For consumers in a financial situation that is tight, used cars might be more cost effective than new cars,” Maas said. “Those are all things that are probably happening across the state.” When gas prices began to hike up last year, Bert Boeckmann, president and owner of Galpin Motors in North Hills, could rely on sales of used cars as new car sales faltered. “Used car sales have been stronger than new cars during this particular period,” Boeckmann said. Sales of the cars have remained relatively steady during the rockiest economic year in recent memory. Galpin sells new and used Fords, Jaguars, Lincolns and Saturns, to name a few. Boeckmann admits that when the Dow Jones recently plummeted to a record low, used cars sales began to dip on par with new car sales. Fortunately, the dealership can also count on the service department to stay afloat. Because car buyers have been holding on to their cars for lengthy periods of time, Galpin’s service department is on a continued growth spurt, Boeckmann said. The dealership has been particularly aggressive in trying to attract business to its service department, offering promotions in which customers who buy three tires from Galpin get the fourth for free. They’ve also found a clever way to keep competitors at bay. If another auto shop provides a service for a lower cost, “we’ll match their price,” Boeckmann said. Business at the service department at Ladin Auto Group in Thousand Oaks is also booming. There, eight bays were recently added to the service division. Although plans to expand the department were in place before the economic downturn swept the news, General Manager Gary Faga said that the expansion was necessary. He noted that some warranty policies mandate that customers provide regular maintenance for their vehicles, so the service department is never short on clientele. For non-dealers, the car maintenance business may not be as promising. At Gary’s Automotive in Northridge, business has been down between 30 and 35 percent. “Actually, what’s going on is people are only spending money on what they need to spend money on,” co-owner Kevin Stone said. In other words, people will shell out money to do maintenance on a car if the vehicle becomes inoperable, but, barring that, they will refrain from servicing their vehicles. To attract customers, Gary’s Automotive is sending postcards to customers that feature car maintenance incentives such as a Triple A car care value package worth $120 that Gary’s is offering for $35. “But we’ve only gotten two responses from that particular program,” Stone said. “Historically, a program like that brings in 40 people in a month.” To date, the Triple A incentive program has been in place for two months. While Stone is concerned about the drop in business, he believes that time will run out for car owners who are neglecting vehicle maintenance. Soon, the daily wear and tear on their vehicles will leave them no choice but to visit an auto shop. “Eventually, they’re going to pay in the long run,” he said.

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