Car buyers holding back

Posted May 28, 2009, at 8:39 p.m.
Last modified Jan. 30, 2011, at 12:18 p.m.

LINCOLN, Maine — David Hansen needs a new car.

His 2002 Toyota Echo is tough and dependable, but an accident left it with a dinged-up skin and it has 99,599 miles on it, enough to make costly major-parts replacements a looming reality. David Jr. is also 13.

He will need his own vehicle soon, and his father confessed to a serious yen for a pickup truck, something to haul stuff around in, like one of those nice Toyota Tacomas.

But the 33-year-old store clerk and Chester resident won’t be buying anytime soon.

“A new Tacoma with no extras costs just about $17,000. That’s way too pricey,” Hansen said Thursday, “and it’s a bad time to buy, with all the dealerships and manufacturers going under.

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“And with the banks, you can’t get financing. They say it’s easy to get a loan, but it isn’t. They aren’t lending any money,” Hansen added, saying that his recent attempt to secure a loan to buy a motorcycle failed despite his father co-signing the application.

Hansen isn’t the only would-be car buyer holding back.

According to statistics released Thursday by the Maine Secretary of State’s Office, comparisons between monthly new and used motor vehicle title applications over the last five months show declines of 31 percent and 16 percent, respectively, as compared to the same five-month period in 2007-08.

In March 2008, 5,824 new- and 16,279 used-car applications were received, while 3,871 new- and 13,318 used-vehicle applications came in to the state in March 2009. That represents declines of 34 percent and 18 percent, respectively. Statistics for April 2008 and 2009 comparisons are not yet available.

“I don’t think there is a whole lot of surprise in that, given the overall trends in the economy,” Deputy Secretary of State John T. Smith said. “Really, it’s probably just a reflection of the economy.”

Access Auto of Lincoln co-owner Bill Noonan agreed that the market is tighter for new- and used-car sellers. His used-car dealership sold 40 cars a month last year but averages about 28 units now, he said.

Noonan blamed the lack of new-car sales for the decrease in used-car sales. With buyers holding back on new cars, the used-car market has been stripped bare and prices for decent used vehicles are soaring, he said.

“Used-car auctions that used to have 400 vehicles are down to about 280 now, and the ones that are there have more than 100,000 miles on them,” Noonan said. “New cars are just not getting sold, and I can’t figure it out, because some of the rebate deals they [new-car dealerships] offer are just fantastic.”

Noonan saw a 2005 Nissan Titan pickup truck with 65,000 miles on it sell for $13,500 at the Port City Auto Auction in Richmond on Thursday. “That’s a retail price,” he said.

The credit crunch is also squeezing the market. People who had a credit score of 500 used to get a deal at an affordable rate but are getting shut out now, Noonan said.

“Now if you don’t have a credit score of 650 they won’t even look at you,” he said.

But Paul Nantkes, manager of North Country Auto Sales of Lincoln, said his used-car dealership and North Country’s operations in Presque Isle and Houlton have done steady and strong sales. His Lincoln dealership has seen a 25 percent sales increase since it opened in October, he said.

Nantkes warned, however, that “special financing” dealers — sellers who offer their own loans and interest rates — are really making a killing by preying upon buyers who cannot get better credit.

“They will sell a car worth $3,000 for $12,000,” he said. “That’s how they do it.”

Besides concerns over manufacturer stability, would-be car buyers are also holding back now because of worries about another gas crunch, Noonan said.

“A lot of people who jumped to small cars the last time the prices went up were kicking themselves that they didn’t buy pickup trucks when the prices went down again,” he said.

nsambides@bangordailynews.net

794-8215

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