Buying and selling cars for profit really is a TRUE recession proof business. In fact, if you choose to buy and sell automobiles for profit, you will be participating in one of the few businesses that can honestly be called recession proof…and here is why…
- New autos now cost as much as a house used to and of course this only increases the demand for used cars.
- Except in rare cases, an automobile is NOT an investment and more and more savvy consumers are aware of how shockingly high the percentages are for new auto depreciation. How about 20% to as much as 40% the first year – 15% the second year – 13% in the third year – and 12% in the fourth year!
- Unless they are very wealthy, parents are always more willing to buy a used car for their child’s first car.
- When the economy is going well and interest rates are low, car buyers tend to buy new cars…but there will always be a market for used automobiles.
- When the economy is in recession, most people hold off on new auto purchases or they buy a used vehicle instead.
Can you see now why buying and selling cars for profit is and will continue to be one of the few true recession proof businesses?
More and more developing nations are seeking “first world” status, and as of 1997, there were 600 million vehicles in the world and that figure is expected to double by the year 2030!
Manheim Used Car Auctions recently reported that the net profit for used vehicles (for large car dealerships) was an average of $230.00 per car and the average net profit for new vehicles was a negative $14.00.
So has it come to the point where mega car dealerships with their insanely high overhead are using new cars as loss leaders in order to sell their used cars?
New car dealers also make lots of money from added on fee’s (like points on the financing, etc.) and any up-sells they can entice the consumer into buying, but still, all big new car lots push their used car inventory because they are keenly aware that buying and selling cars for profit is a huge money maker for them.