Bias Against Domestic Cars

It is a tough choice when you're caught in a contradiction like this. Take a stand and make a difficult choice? Ignore it altogether? Or find some cop out response?

In the mean time, I still haven't found a scrap of statistical information supporting any of the reliability verdicts or predictions from the April, 2009 issue. Blind faith is a fascinating phenomenon when it comes to survey results. I mean, like you said, CR is a non- profit, independent organization. They don't even accept advertising. On that basis, does it mean you put complete trust into every independent, non-profit organization? Heck, I coordinate an independent, 501c3 non-proft that accepts no advertising. Funny thing is, nowhere in the articles or IRS requirements is any stipulation of being honest, unbiased, or accurate. I guess it's no surprise how a lot of these charities get money, when there are people that put so much blind faith into them because they assume independent and non- profit also means they are completely trustworthy with no potential for typical human motivations like greed.

We bought Toyotas after decades of buying substandard GM crap. We have not ONE complaint against the Toyotas.

The GMs were crap. Each one had a different, serious, and unwarranted problem. Every freaking one of them.

I damned sure wont acknowledge that because it isnt true. I have had shit with EVERY freaking GM product I owned since the early 80s. Yes, I paid a premium price, and yes I got a car that is not a piece of shit.

Have to agree on the GM. Only one I've owned newer than 1967 was more trouble than any 2 others of any brand. Both old high-miler Toyotas gave excellent service - and that was in the '80s when they rusted. My GM was a '95 3.8 TransSport.

I don't buy new cars. My last 3 Fords have been OK - not stellar in the quality department but much better than the Pontiac. My last several Chryslers have been OK too.

If the Toyotas didn't hold their value so well I'd likely be driving them now, but I buy what I can buy 5 years old for $5000 - $6000 with

100,000km (60,000 miles) on them and Toyotas don't fall into that price range up here even with 300,000 kms.

That may be your opinion but one would suggest that your stop by you local GM, or other domestic dealership, and count all of the so called superior imports you see on their use car lots, that were traded in for a domestic brand.

Obviously not all import buyers believe the import THEY bought was better than a domestic, because they did not by another import.

In addition you can look at the import dealership used car lots and see how many switched brands, as well. ;)

One will see a lot of Toyotas traded in on GM brands

That's the basic problem with Toyotas (and Hondas), they are usually a bad deal to buy used because they retain so much of their value.

Another issue is that new Toyotas are heavily discounted so even a half-conscious buyer can buy a new one for less than what an uninformed buyer can buy a used one for.

I have one acquaintance that works at a Toyota dealership and I asked him why there were so few used Toyotas on the lot and he explained it to me. Most of the used Toyotas are sent to other Ford, GM, and Chrysler dealerships that are owned by the same automotive group. Used Toyotas on a Ford, GM, or Chrysler lot will fetch a higher price than used Toyotas on a Toyota lot. Someone visiting a Toyota lot either knows that they can get their new car for well-under invoice, or is dumb enough to pay MSRP, but they're not going to pay top-dollar for a used Toyota like the visitor to the Ford or GM lot. We actually did buy a used Toyota from the Toyota dealership, one they had had on their lot for six months and were desperate to get rid of so they let it go for what seemed to be a good deal. Of course the problem with a used car is that the bumper to bumper warranty is much shorter so that's the risk you take.

Don't think that the Toyotas or Hondas you see on a Ford, GM, or Chrysler lot were traded in for a new Ford, GM, or Chrysler--in most cases they weren't. The used Ford and GM vehicles are wholesaled out to those used car lots that are usually scattered along auto rows. The Ford and GM dealers make more (per vehicle) selling used Toyotas and Hondas than they make selling new Ford and GM products.

Is this theory of yours valid?

It seems to me that the local new car dealers in my area mostly off load all but the very best trade-ins to either local independent lots or auctions. They only keep the very best trade-ins and many of the used cars for sale at local new car lots are actually cars picked up from rental car auctions. I know the local Ford dealer has a bunch of used Toyotas on the lot, but they all appear to be former rental cars, not cars traded in for new Fords. They were pretty obviously former rental cars. It seems to me that this was an indication that the dealer was buying used Toytoas so he would have something on his lot that Customers wanted to buy. I did not take it as a positive sign at all. In fact, I thought it was sad that a Ford dealer was going out and buying used Toyota rental cars to sell. Of course the local Toyota dealer does this also. I think they are all trying to compete with CarMax - which brings up a whole different line of thought - why do people buy used cars from CarMax. When I was looking at trucks, I could buy a new F150 from the Ford dealer for only a little more than CarMax was asking for a used 1 year old F150 with less equipment. It seemed to me that their "below blue book, no negotiation prices" are just a scam to rope in lazy shoppers.

Last year I trade in my Frontier (in excellent condition) for an F150. The truck was cherry, but they didn't sell it on their lot. It showed up at an independnet lot within a couple of days. This surprised me. The truck was only 3 years old, no blemishes, and less than 80k miles. But it appears they didn't even try to sell it off their lot.

There is industry data available that shows brand loyality. Last time I saw it reported, Honda's was the highest, then Toyota's. This was on a percentage basis, not raw numbers. If you use raw numbers (say the number of GM owners who bought a new GM car), then GM might be able to claim to be the best. However if you do it on a percentage basis (percent of Honda buyer who buy another), I am sure Honda and Toyota do far better than GM.

I have the same problem with this theory as your looking at import used cars on domestic lots theory. I assume most new car dealers, including import dealers, only keep the best trade-ins. I know when I bought the Frontier, the dealer wholesaled the Saturn Vue I traded in on it. Heck, I didn't even want to try to sell that car. And when my Sister bought a Toyota, the dealer told her that they would take her car in trade, but they didn't want it (a 10 year old Honda Civic in poor condition). They offered her so little for it, that she sold it herself (and amazingly had to beat off the buyers).

Ed

You and your friend are full of it, all brands return more in their own store, period. When we traded a domestic on an import in one of our import stores we sold it at our domestic store and visa versa, dummy

We ALWAYS made a higher gross profit on new and used Toyotas in our Toyota stores than our domestic stores because Toyota buyers were convinced they were "better," not because they were better.

If you doubt that dealers earn more on imports, look at the difference in ratio of wholesale to retail in the NADA Guide, for imports and domestics. The dealer earns more on imports because they can trade imports for LESS and sell more of the smoke and mirrors packages to import buyers. We even made more profit in our import stores with our $20 HIGHER shop rates, as well.

Toyota touts retail value, but the Toyota buyer never see that value when they trade on another Toyota. You will NEVER get wholesale for your Toyota trade at a Toyota store.

No viable dealership BUYS used cars, period! New car dealers need to GET ride of their used cars to preserve capital to buy more NEW cars to sell.

If any dealer MUST buy cars for his used car lots, he is not selling enough NEW cars and needs to fire his New Car Sales Manager. The fact is vast majority of new cars sales involve a trade. Well over HALF of used cars sold at a new car dealership involve a trade as well. The dealership does not earn it gross until the last trade has been removed from inventory.

IF they do buy some late model used units on occasion, they buy them from the OWN brand auctions, where only the brand dealer can bid, not general auctions where all brands are sold. We never kept trades longer than two months, except for rare units or extremely low mileage units. If we traded a Toyota or Honda in one of our GM or Ford stores we took it to one of our Toyota or Honda store. The only non-brand cars on our lots were traded on one of our used cars.

Mikey's comments translated:

"GM, GM, rah, rah, rah!

GM, GM, sis boom bah!!!

GM, GM at any cost! Damn the Dexcool, full gaskets ahead!"

Or words to that effect :-)

AKA Mikey can see the back side of his front teeth.

No, his theory is not valid. At least in my town. The local Buick/exPontiac dealer gets a lot of cars at auction and sends a lot of cars there too. He has a minimum that he will handle in terms of age and quality. The rest he takes in trade go to the other local dealers, as you noted.

I was at the Caddy/ex Old dealer in town. He took a Lincoln in trade and called the local Ford dealer.. He sold it over there. He mentioned that they often swap cars amongst themselves as Mikey did point out, a used same model often does sell better at the new car dealership of the same brand.

Same with the Chevy dealer. I know people that have traded at his shop and a few days later the trade would be sitting for sale up the street at the low end dealer's place. Some dealers do very well specializing in the low end 5+ year old stuff that a new franchise won't touch.

I passed the Buick dealer on my way home today. He has a red Lucerne on the lot that he sold twice before. It originally came from the gold tournament a few years ago. He handles a lot of "program" cars. He also says he makes more on them than the new cars.

My grandson also works part time for a Subaru dealer. He takes cars as far as 200 miles and swaps them, both new and used. Most of the used he brings in are from auctions and yes, the majority are Subaru.

Mike used to work for one of the big mega dealers. Some of their policies may be different, but he seems to be unaware of what other small town dealers do every day.

So all of the used cars were traded in? Have you ever heard of an auction? What about all the domestics on Toyota and Honda lots?

If they didn't buy another import, why would they think the import they bought was better than a domestic?

And you can look at any dealer and see how many switched brands. There is a lot of brand switching when people get new cars. IIRC, Toyota owners are the ones most likely to buy another car from the same brand.

Stop it now! How dare you use knowledge and logic to deflate Mike Hunter's words. Seriously, this is a rarity. Usually, his logic is convoluted and false, that he defeats himself. Considering how he shoots off his mouth about auctions and having owned so many dealerships, one would think he knows about what he is talking.

Jeff

So what? That was back in the last millenium.

This is a new millenium. No need to do name-calling in this one, either.

If want to believe that, go ahead.

Ever hear of the auto auction? The domestic dealers keep any imports they get because they know they will sell. The import dealers don't keep the domestic trade-ins because they know they won't sell as easily from their lot.

The 3 biggest GM dealerships locally also own import franchises. One has Hyundai, one has Kia, and the other has both Toyota and Mazda. The one that has Hyundai USED to be the Toyota dealer, and also either owns or once owned the Acura dealer.

Makes it pretty easy to ballance the inventory of used cars to their best advantage without having to redort to the auctions.

ANd I USED to be the service manager at the Toyota dealership between when it was owned by the GM guy that now owns the hyundai store and when it was bought by the other GM guy - for almost ( the first) half of that time span.. Our retention rate was the envy of every dealership around, import or domestic. ( and no, I don't drive a Toyota - as I explained in an earlier post)

Don't find them terribly highly discounted up here in Canada

That's for darn sure.

That's what happens at most Ford dealers. They'll wholesale out used vehicles that really are not that old because they just can't sell them on their own lot. What they want on their own used car lot is Hondas and Toyotas. Either they get them from a dealership within their own dealership group (or at least with the same ownership) or they get them from places like rental car fleets (at least for Toyotas, Hondas are rare in rental fleets).

It's important to understand that those Toyotas and Hondas you see on the Ford or Chevy lot are rarely the trade-ins of unhappy Toyota and Honda owners that traded their cars in for a Ford or Chevy (this happens, but it's extremely rare that a Toyota or Honda owner would trade for a Ford or Chevy.

Mike, that may be the way it works where YOU do/did business - but that is by far not universal

Most new car dealers up here make more money on used cars than new, and sell more good used cars than new cars. They LEASE a lot of new cars.

Those leased cars come back in and are SOLD as used cars. The heaps that come in on trade are either shuffled off to local car lots or wholesalers, sent to the auction, or scrapped, depending how bad they are. The REAL GOOD ones go back on their lots for resale.

MANY dealerships DO buy used cars from the large centralized auctions because their market for used cars is larger than their supply of latemodel trades or lease returns. It is this wholesale auto auction activity that sets the blue-book value for used cars. If there is no demand at the auctions for a particular car, the Kelly Blue Book will reflect that with a low wholesale value.

They also buy from their manufacturer's auctions - lease returns, company vehicles, executive driven vehicles, etc - and with dealer principals owning more than one franchise, they often end up on "competitor's" lots.

If there IS a high demand, it will reflect that with a high wholesale value. In YOUR area a vehicle may sell better or worse than the regional average, so you may have trouble either getting close to book value for a car, or buying one for close to book value.

That's how the "iron" business works.