Hammer Time: And Now For Something Completely Different…

Everyone asks me where the deals are in this business. I tell them, "If you want a great deal, buy a lemon!" They laugh… but I'm not kidding… In my world there are two types of lemons. There are those cars that have an impairment on their title and have already experienced, or may soon undergo, major issues. Lemon law buyback, Salvage, rebuilt/rebuildable, court order… they are all scary words. The trick for the hardcore and fearless car buyer is to find out the meaning behind the words. Sometimes the problem with a lemon law buyback can be nothing more than an issue with a tricky repair way back in years past. Or in the case of an older car with a salvage or rebuilt title, a minor accident that required the replacement of a body panel or two. Many lemons are strictly in name only. The car drove fine then, and continues to drive fine now. Even with the branded title. This 2009 BMW 535i has 45,000 miles and looks absolutely drop dead gorgeous. It offers nearly the same acceleration as a 550i, and far more space than the 335i, which is more sought after in the enthusiast world. To me, if you're a true keeper, all of this is good news. The better news? Perhaps? This vehicle is a lemon law buyback. It happened back in the first year of it's existence and the title will be branded as such until either the end of the time or the moment it's exported. These common 5-series models are not particularly popular in the export market either. So the question now becomes, "What is it worth?" The rough book on this model came down at right around $22,500. With the branded title and the bad history of way back when, it sold for only $17,300 at this morning's auction. There were two other vehicles that I ended up finishing in a firm but profit vaporizing second place. This 2010 Impala LS has the tried and true 3.5 Liter v6 and 28,000 miles. The bidding went all the way down to $9000 and I jumped in at $9100. Once the price hit $10,400, a few hundred below the rough book, that's where it stood. The auction fee probably put it right around $10,650. Then there was a 2010 Honda Insight LX, which I still kind of regret not holding on to the bidding. The unpopular hybrid had some dings and small scuffs, but only 9,700 miles and a perfect Carfax history. Rough book was $12,800. I jumped in at $11,000 and walked off at $11,900. Part of the reason was because we are getting right near the model change and 1 to 2 year old vehicles can take some nasty hits during this time period. The other issue is the vehicle in question.  Unpopular models can be hard to unload and experience has lead me to be more of  a hedger than perhaps I should be in my daily life. I am more willing to bid up a low cost car than a high cost one due to the fact that it's easier to finance on the lower end.  There were a whole lot of second place finishes today and I deeply hate the fact that some potential deals slid right by my eyes. However, the higher end of the used car world can be a tough market. Some folks try to wholesale the inventory and let that be that. But I'm always wanting to retail vehicles like the Impala and the Insight. My overhead is far lower than the new car dealers and I'm still of the persuasion that a good presentation can always beat up a big bowtie or giant H on the front of a building. We'll see. In the meantime, if you folks want to enjoy the sweet lemonade of a killer deal, you often have to throw some lemons into the mix. Branded titles and the unpopular 'retail' car are just two ingredients I try to throw into my personal recipe.   from The Truth About Cars http://www.thetruthaboutcars.com

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