High gas prices and worsening economic conditions are slowing new car sales in the Lynchburg area.
Hence the hundreds of cars in the Kmart parking lot along Wards Road — an attempt by a group of local automotive dealers to jump-start the market again.
The Mabry Automotive Group, along with Terry Volkswagen Subaru and Apple Ford, started a three-day sale at Kmart beginning Thursday after months of a down market.
“Just because the market is bad, there’s no reason we can’t sweeten it up a bit,” said C.J. Franzelas, vice president of Mabry Automotive Group.
Franzelas said a number of factors caused the market to idle this year.
Because of high gas prices and financial uncertainty, buyers are “holding on to their money a little tighter,” he said.
Meanwhile, lenders have tightened up credit, asking for larger down payments.
Just like foreclosures are up for the housing market, repossessions are up for banks that lend money for cars.
According to data from the American Bankers Association, about three vehicles per 1,000 car loans were repossessed in the first quarter of 2008, a 12 percent increase from the same time in 2007.
Local statistics for new car registrations reveal how much the market has dropped off.
From January through Sept. 12 this year, only 965 new 2008 model vehicles were registered in the city of Lynchburg.
That’s a 26 percent drop from the 1,306 new 2007 models registered in the same time frame last year.
Franzelas said his business’ sales are off by about 30 percent.
For about seven years, he organized a multi-dealer sale at River Ridge mall, but last year he stopped because it became harder to organize. This year, the drop in sales motivated him to try again.
He also invited food vendors, a credit union and an insurance company to the sale.
Late Wednesday night, Franzelas was directing traffic in the Kmart parking lot, getting the cars in place and ready to sell.
He said there are signs the automobile market might be rebounding. Car values at auctions he attends have started to go back up.
He sees light at the end of the tunnel, but probably sometime after the presidential election.
“I’m very confident that this will turn around in the next five months,” he said.
Email
Facebook
Google
Twitter
Favorites
More
Advertisement