Motorists opting for smaller vehicles
by Laura CamperThe Times-Georgian
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While new records for gas prices are being set nearly every day, car manufacturers are offering rebates and even subsidies for gas prices to attract consumers into the dealerships to look at sport utility vehicles and large pickup trucks. But local dealers said such marketing aspects aren’t as effective as they once were.

Numerous dealers said that truck and SUV sales are down but that car sales are up as motorists try to economize where they can. Gas mileage is a big concern for consumers, and their vehicle preference has changed, said Bart Smith, general manager of Don-Rich Ford Company in Villa Rica.

“It has swapped from trucks to cars,” Smith said. “We probably have always sold here eight to one trucks over cars. Now it’s probably eight to one cars over trucks.”

The change is a reflection not so much of taste but of necessity, the dealers said. It’s happened before, when gas prices have risen quickly.

Steve Jones, general sales manager for Mike Bell Chevrolet, said that once previous crises were over, prices went down and people traded in their small cars for new SUVs and trucks.

“We’re all Americans,” said Mark Foster, general manager of Walker Cadillac Pontiac Buick GMC on Highway 27 in Carrollton. “We think bigger is better.”

A couple of dealers acknowledged that sales are down slightly but more noticeable is the switch from bigger vehicles to smaller cars and SUVs.

Jeff Haney, manager of Richard Haney Ford off Bankhead Highway in Carrollton, believes the switch to more fuel-efficient models has kept more people buying. It’s been keeping the dealership full of customers, he said.

“If they can’t trade their big SUV, they’ll just buy a smaller car separately because the gas savings will pay for the car,” Haney said. “People still need their big SUVs when they go on vacation, but they may buy a smaller car just for around town.”

Dealers said some people do need the bigger vehicles. Families with three or more children just aren’t comfortable in a small vehicle. That may have people looking for more affordable or more efficient SUVs, they said.

The smaller, more fuel-efficient SUVs still offer the people and cargo room that families demand, but are a little easier to fill at the pump, said Derek Martin, general manager at Scott Evans Nissan. If they’re just driven around town, gas prices aren’t as big a concern.

One change he’s seen that he thinks is in the name of economy is a record number of leases for SUVs. Leases have smaller payments than the standard car loan. But at the end of the lease, the consumer doesn’t own the car. He or she can choose to buy the vehicle at the end of the lease or give the vehicle back to the dealer.

“We’ve done more leasing on the big SUVs over the past month than we’ve ever done,” Martin said. “Because you can get a payment so cheap. If your payments are smaller then you can afford to pay more gas.”

Another tactic is to buy a hybrid vehicle. The hybrid SUVs offer better gas mileage in-town driving because it’s running on electricity. But on the highway, when the engine is running on gasoline, the mileage is the same.

Haney said the hybrids sell as soon as they come in. Unfortunately, the dealership only receives one about every six months.

Mike Bell Chevrolet has hybrids on the lot and there is definitely more interest in them, Jones said.

“It took a while to get them,” he said.

“That’s the way it is with any new product,” said Mike Bell Chevrolet salesman Adam Teal. “Anytime they introduce a new product because of the demand right at the beginning, you have that constraint.”

A more interesting shortage is popping up among small cars like the Aveo, Jones said. Other dealers are requesting them from the Carrollton store and offering money on top of the invoice for them, he said.

The rebates which are meant to entice buyers into purchasing the larger vehicles aren’t necessarily bringing in new customers.

Some dealers believe the rebates may be losing their appeal to the customer because they have been offered for so long, people see them as the norm rather than a special deal.

“I don’t know that they necessarily work because people are accustomed to getting large rebates and incentives,” Martin said. “That’s something that’s been going on for a long time.”

But others say the rebates do make the larger vehicles more affordable to the customer and may make it possible for someone considering a purchase to buy a less efficient vehicle. In that case it may bring in a buyer but probably a consumer who was already going to buy. The bottom line is getting customers what they want.

“If you treat a customer right and you help them find what best suits them and their family and what they’re looking for, they’ll buy a car,” Martin said.

“They way the business works, most medium-sized stores, like we are, are going to sell a very constant volume,” Foster said. “The big stores that are bringing people in from all over, they’re the ones that are going to hurt and that’s who are hurting.”

The local new car dealers consider themselves small to medium dealers.
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