Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-12-26
RECLAIMED AUTO
SALES ARE LARGE
Many Dealers Make Good
Profits in Handling Ma.
chimes on Trade-InS.
BY J. C. ROYLE.
Special DISPATCH to The Star

NEW YORK, December 26.-Automo-
bile dealers are following the old maxim,
Let the buyer beware" instead of let
ting their customers do it. Reclaimed
car sales have taken such q prominent
position in the automobile trade that
they have meant the difference between
profit and loss in the case of many
dealers in 1929.
There have been some reports cur
rent that only few dealers who han
died a popular make of cheap car made
any money in 1929 and that the greater
number Of the others got on the red
ink side of the ledger. A careful check
in the main trading centers of the
country indicates that this is a de-
cided exaggeration. Thousands of deal
ers have made profits. They have dis
posed OF approximately 100000 new
cars, and their operations have involved
over 2,500,000 used cars. One big ex-
ecutive declared today that If the deal
ers were unable to make profit under
such conditions, they had no place in
the automobile industry.
Too Liberal Allowances.
There is small reason to doubt that
many dealers made far too liberal allow
anceS on trade-inS of used cars taken
as part payment for new machines. But
there would have been little difficulty
about ending the year on the right side
OF the ledger had it not been for the
slump in stocks and bonds, which
checked the demand for new cars with
out stimulating the buying of used cars
to an appreciable extent. One leading
concern declined absolutely to let its
dealers lower the bars when it came to
trade-ins, and those same dealers In
consequence are in excellent position
today.
The public, automobile distributors
say, is a better judge of used car values
than ever before. The old days when
a prospective buyer could be imposed
on by a sprinkle of cork in the gears
and other old-tlme tricks have passed.
The dealer can get now for a used
automobile just about what it is worth,
and If he takes one in for more than
it is worth, he stands to lose accord
ingly. Junk cars will sell at only junk
prices and that is why so many have
found their way into the scrap iron and
steel markets.
Judgment Of Public.
In some instances the public is far
better buyer of used cars than the
dealer whose business it is. The writer
Is personally cognizant of one case
where a customer was allowed $3.50 on
his old car on the purchase price of a
new $4,000 car. The customer knew
his old car thoroughly and its value.
He was fully satisfied that 1t was worth
$3.50. The dealer put it up for sale and
the customer had friend buy it back
for him for $500. He then resold 1t
himself for $500, concluding the trans
actions with q new car worth $1,000
which actually cost him $2,350. OF the
two, dealer and customer, there does
not seem to be much doubt as to which
really belonged in the automobile BUSH
ness.
Many dealers are beginning to "clean
house." They are taking the less sala-
BILE of their used cars and junking
them. thus obtaining some cash and
valuable storage space. Automobile
junkers In some sections are paying
from So to SIS for the worst wrecks and
as high as $40 for better grade junk
machines.
The idea of two cars to family is
being used vigorously by many dealers
who stress the ACCESSIBILITY of purchas-
ing one new car and one used car for
such purposes. For dealers who are
good merchandisers these factors are
bringing an encouraging outlook for
$780, In the best years the industry
has ever known it is estimated that only
some 60 per cent of the dealers wind
up with profit. The percentage will
not be SO high this year, but it will
represent more clearly than. ever the
difference between the good merchan-
diSer and the poor one.
On the Pacific Coast the successful
dealers have maintained a ratio of I%
used cars handled for each new car
sold. The ratio for the country as
whole is placed unofficially at 2 for /.