Evening star., 1948-11-11
Automobiles
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declared that is a matter of opin-
ion maintaining that the prewar
practice of liberal trade-in allow
ances was an unsound one.
Cites Higher Operating Cost.
THE committee" he declared,
"also seems to have overlooked the
fact that dealers operating costs
have doubled since before the war"
Mr.. Baker said the association rep
resents about 95 per cent of all new
car dealers in this area. He added,
however, that the association docs
not control the policies of its men,
bers."
A. L. Sinclair, president of
Haley's, Inc, and second vice pres
ident of the Automotive Trade As
sociation, said: I'VE have never
loaded cars with accessories" He.
said he was speaking as a private
dealer, and not for the association.
It's unfortunate all dealers are
being tarred with the same brush,
he said. I'VE welcome publication
of our records. We measure up
we'll"
Allowances Called Fair.
Allowances by his firm on used
cars as trade-ins are fair and rea-
sonable," said Mr.. Sinclair When
they are resold by us, We go by the
principles set up by OPA-a 20 per
cent markup."
Mr.. Macy's statement yesterday
gave figures. For instance, it said
trade-ins had been undervalued by
dealers here on the average of at
least $500 for each car. It was esti-
mated, on the basis of the commit
tee investigation, he said, that this
practice cost buyers here more than
$2OOO,000.
Mr.. Macy said the committee fig
ured on the basis that neW-car pur-
chaSers do not want at least half of
the extra accessories offered them
on cars. 1t estimated that during
the first seven months of 1948, buy /
ers here paid for about $2.4O0, 900
worth of such accessories they did
not want.
Taken together, the figures claim
that buyers here lost a total of
about $400O,000.
John T. M. Reddan, chief counsel
of the committee, today amplif1ed
the report with more details.
Some complaints, he said, show
that the cost of extra accessories /,
ran as high as 26 per cent of the
purchase price.
A new complaint was registered
yesterday by buyer who told him
the dealer had insisted on $700
worth Of new accessories. More new
complaints today insisted the COM
mittees estimates of loss to buyers
were too low, he said.
A committee aide said publica-
ton of the committees statement
had brought in a flock" of mail and
telephone calls, mostly from buyers |
During the investigation, Mr.. Red
dan declared, the staff looked into
the sales of $4,000 automobiles. Many
more actual transactions were in
volved, he added, because some cars
undoubtedly were SOLD more than
once.
Some dealers were found to have
made every effort to deal fairly and
honestly with the public. They did
quiring turn-in of an old car for a
new one, nor would they add more
accessories than the public wanted |
Some of these dealers, Mr.. Red
dan said, also were making "rea-
sonable markups" on the resale of
the used cars taken as tradeins on
new ones.
Markups Average 43 Pct.
On the other hand, the commit
tee counsel declared, the average
markup on tradeins offered for sale
was found to be 43 per cent over
the price the dealer paid the GUS
toner, with many markups much !
higher.
One dealer in this area, for in
stance, was found to have been
marking up the prices of lis trade
ins for resale at 1902 per cent A
few markups were discovered to
have been as high as 500 per cent.
Committee counsel said markups
up to 20 per cent, or even 25 per
cent, are considered reasonable" to-
take care of repairs and other nee
essary work.
The subcommittee hearings next
week are to hear a large group of
witnesses. The hearings will open
at 10 am. Monday in the House
Public Works Committee room in
the new House Office Building.
Mr.. Reddan said the witnesses
name swill be made public Sunday.
The committee may look into other
practices of dealers here, Mr.. Reddan
predicted. One of these may be the
contract many dealers require when
selling a new car. These contracts.
he said, provide that if the buyer
wants to resell his car, he must
offer it first to the dealer, within
six months. The dealer would paw
him 80 per cent of the new-car
cost.
1--WE want to find out what these
repossessed cars sell for the second
time " he Said