Hammer Time: Buy! Buy Buy!

When do wholesale prices equal retail prices? Think about it for a second. When do the prices of a consumer good become so expensive that there is virtually no markup? Here are a few scenarios that I can come up with… given what I've seen at the auto auctions these days. 1) Extreme shortage of product and too many wholesale buyers. 2) Most everyone buying the product is financing it to sub-prime customers who only care about 'the monthly payment'. 3) You have enough seasonal dealers, overseas buyers, and funny money that the laws of economics no longer apply. Now having said that, I ended up buying five vehicles at one sale recently. My purchases were… 2001 Hyundai Elantra, Silver, 150k: $850 2002 Hyundai Accent, Auto, 120k: $2225 2001 Toyota Solara SE, Cloth, 130k: $4680 1998 Saturn SL2, Base, Stick, 175k: $1150 1992 Toyota Corolla DX, Stick, 178k: $885   Were those purchase prices too high? You never know until after the fact. Cars that look like dealer queens can be riddled with gremlins. While a beaten up old jalopy may still have more life left in it than Keith Richards at an all-night party.  So let's look at the five vehicles and, based on my reasoning (or lack of), make your own determination. The silver Elantra was supposedly an inop at a 'trade-in' auction that averages a bit over 100 vehicles every week.  At this auction the inops are put far away from the rest of the vehicles. Quiet. Secluded. A place where few if any buyers bother to even look at them. What was wrong with it? Couldn't get into third gear. Oh, and the rust. My good god this thing was rusty enough!  We're talking deep shades of flake brown on nearly every part of the undercarriage. I looked at the history and found the owners had more or less sat on it for a year once the clutch started to give out. But it looked… nice. Good enough to have it go through another sale where there would be more than a few people looking at it. The wholesale price should be around $1800 at a good sale with plenty of buyers, and I should find out by this Wednesday whether it goes through. The 2002 Accent has new belts, good fluids, and… an emissions issue. Like most metro areas, Atlanta has thousands of people who are compelled to give up their rides due to an annoying and elusive emissions issue. I almost sold an old  Camry before I got into the auction business because it had failed emissions three times and was running out of repair possibilities. Based on the Carfax history I got before the sale this Accent looked to be no different. That old  Camry only needed a bottle of 'Guaranteed to Pass' and a lot of highway driving.  Old Accents though are known for having cheap catalytic converters . So I will likely have to spend around $150 for a new one. Given that small cars with automatics are the most finance friendly vehicles in today's market, that shouldn't be a bother. So long as it doesn't need something else. The Solara needed a new front grille. $80 on Ebay. The Saturn needed a left front quarter panel. 2nd generation  Saturns have panels that are flexible to a point. But if you hit them too hard they shatter. The right color panel was found for $50 at Salvage Hunter Auto Parts, so I got lucky there. Finally there was a blast from the past. A 1992 Toyota Corolla DX.   Why get a vehicle that old? Let's just say prior owners make all the difference. The prior owner worked at the local university, had the maintenance done at a Toyota dealership, didn't drive very much, and managed to do everything from putting Michelins on the vehicle to keeping the (has to be second) clutch in good shape. The paint was sun burnt to a crisp.  But the interior was fine and surprisingly clean. Back in the pre-recession days $885 was about par for cost. Now it's a steal. I ended up driving the thing to the nastier parts of downtown Atlanta and it  never missed a lick. As for other vehicles? There were some deals and many dog fights. Here's a short list…   2000 Toyota Camry LE, No Roof, Cloth, 94K : $5600 2005 Nissan Quest SE, Loaded, 74k : $8700 2003 Toyota Corolla LE, 200k, Cloth, No Roof, Auto: $5900 2002 Ford Explorer XLT, Auto, Leather, No Roof, 109k: $5300 2011 Hyundai Santa Fe GLS, Frame Damage History, Base Options, 11k: $16,600 1999 Mercedes E320, Loaded, 126k: $5400 2005 Mini Cooper Convertible, Auto & Alloys, 144k: $6200 (came in second on this one) So what was the best deal? Which one do you think will come back to bite me worse than Marv Albert on a blind date? As with all things in the car business, every opinion is worth telling.     from The Truth About Cars http://www.thetruthaboutcars.com

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