The Birmingham age-herald., 1924-02-17
WHAT IS USED
 CAR PROBLEM?
By Percy chsmberIain

More rapidly than most people realize the automobile industry is approaching solution of the used car problem
 One of the biggest factors in it's solu- tion will be an understanding of the problem by the automobile buying pub lie. This is because any solution means that those who buy automobiles will not get as much for their used cars as they have been accustomed to getting. They will, however, more than make this up in other ways. @ s.
 Let's get to the bottom of the situ- ation.
 The only reason the used car is a problem to the automobile dealer is be- cause he has been losing money on his used car business. That means he has been paying more for used cars than he can get for them. The public knows this as we'll as the dealers know it. And the public also knows that no mer- chant can lose money on 50 per cent of the goods he handles and stay in business-unless he makes it up in some other way. - Other ways have been tred-all of them-without success. The price of I the new car has been inflated-and the imitation added to the used car allow ance in an attempt to ''kid' the owner of the used car into thinking that he was getting a high price for it. This is known in trade terms as the trad ing allowance"-condemned by legiti- mate manufacturer and dealer alike Then service has been impaired. Through ignorance of used car values or a poor conception of their oblisa- tions to the customer, some dealers have deliberately cut down their gross earnings by allowing too much for the used car-and made it up by. savings" in other departments of the business. These savings" have to do with in adequate replacement part stocks, waste full methods of handling business, cheap help, poor equipment, etc.
 Still others, seeing the large gross earnings, have lost sight of the net. Selling a $2.0O0 automobile at 20 per cent gross discount they think they make .$40O and, therefore, can easily give $2OO of it to the prospect as an allowance on the used car over and $20O left. When they finally net on profit can be figured, they find that thC puoiilCoS lObt luOutyy anu Iuey quietly pass out of the picture, leaving behind as orphans those who have been foolish enough to buy from that kind :, of a merchant.
 Whatever the reason which influences the individual dealer, the used car has become a problem bcause it is an article of merchandise which has been bought and sold at a loss. ;. But the used car is not only a prob lem for those who sell automobiles. It is a problem for those who buy auto mobiles. The automobile dealer sees the problem because he keeps books. And books show losss. The owner may keep track of his expenses" in connection with operating his automobile, and yet not sense that much of his cost, dis tributed over year, say, is because the used car is a problem.
 Because of the way used cars have been handled millions of owners of automobiles pay more for their motor cars, maintenance and supplies than they should.
 The used car is not only a problem of loss in the used car sales depart ment. It permeates the entire dealer organization from the standpoint of actual money losses. Going still fur ther, it is responsible for an economic loss running into billions of dollars. It