Evening star., 1950-12-04
Auto Sales Here
Are Hard Hit by
Credit Curbs
One Dealer Reports
rs Pct. Cut in Both
Used and New Cors
By WiIIiom A. MiIIen

survey today shows automobile
have been hit hard.
One automobile man said tn
new and used car business ha
BEEN cut Is per cent in recen
months. Others familiar with tn
automotiye field say used-ca
buying here is down as much a
SO per cent. Some dealers hav
trimmed the cost of 1850 models
with new ones due shortly.
But there has been no genera
slash in used-car prices nor ar
new cars backing up" on th
dealers yet, they say.
Regulation w is blamed TO
putting some used-car dealers ou
of business in the Washington
area. Now, the business is "ver!
spotty."
Time Cut to Is Months.
The regulation, effective Sep
tember 18, permitted debt to b.
paid up in 81 months, but OF
October 16, this was cut to IL
months.
Civilian automobile production
may be cut soon in view OF ma
tional defense needs and this Is
a definite factor in the whole sit
uation. A one-third cash pay
ment down is required on all cars
now.
A joint Senate House commit
tee on Wednesday, under the
craftsmanship of Senator May
bank, Democrat, of South Caro-
lima, is slated to inquire into COM
plants against Regulation w by
automobile men all over the Ma
ton. This is the watchdog
economic committee.
Bernard Margolius, counsel fol
the National Capital Used Cal
Dealers Association, had this te
say:
Regulation w has had a very
serious effect upon the business
of the used car dealer in this area
When it was originally put into
force in September, the cut-back
in sales was quite apparent. When
short time thereafter credit con-
trolls were made even more strin-
gent and a 15-month limitation
placed on all sales of automobiles,
used car sales dipped to a point
seriously threatening the existence
Of many dealers.
Some Claim Losses.
Many dealers now complain
Of operating at loss with their
capital frozen in unstable mer-
chandise.
Extreme credit restrictions
placed on luxury items such as
televisions and radios, perhaps
may be warranted by present
world conditions, but the limita-
ton imposed on automobiles
which now cannot be properly
classed as "luxury"-is unfair to
the average workingman, who in
many cases depends upon his au-
tomobile in connection with his
livelihood"
William H. Emerson, president
of the Washington Automotive
Trade Association, declared: Reg
ulation w has taken a lot of
people out Of the market, because
they could not stand the high
monthly payments. The effect on
used cars is much more severe
than on new cars, for more people
pay cash for the new cars.
More Severe in West.
In the past week there has been
some "war scare buying" attrib-
uted to the Chinese push in Korea
Mr.. Emerson asserted the effects
of Regulation w are more severe
on the West Coast and Southwest
than in the East.
Edward Cashell, general man.
ager of H. B. Leary, jr. & Bros,
Chrysler and Plymouth dealers
said Regulation w has hurt very
materially"
One large Chevrolet dealer said
that Regulation w has not yet
noticeably affected his firm be-
cause there has been a lot of buy
ing for cash.
A large Ford dealer declared
Regulation w has "hit us right
between the eyes" and that it has
caused sales to drop off 40 per
cent.
Competition Keener.
He pointed out there are more
cars available to sell because OF
better production now. This makes
for keener competition.
Those familiar with the auto.
mobile field say the ordinary
practice for those with limited
funds is to start out with usec
car. Then they use this as a STEP
ping stone to a new car. But with
Regulation w in force, payment
on a used car is high. One usee
the illustration of a used car cost.
ing 5000. Unless one can make &
down payment of $500 or $500 the
monthly payments will be high
Payments that used to be $4(
to $50 month have now SCARED
to $50 to 500 monthly, automobile
men say. For most people that il
prohibitive. This situation has hi
the car dealers hard.
Christmas Buying a Factor.
Admittedly the car market has
been hit also by the Christmas
shopping season, the weather ane
the fact that installment buying
to beat Regulation w before il
became effective resulted in some
going in over their heads in credit
buying of many articles. This
left little or nothing for auto
mobiles.
The other side of the case was
presented by a spokesman for a
Cadillac dealer in this area. He