From Chapter Two:
Why You Will Never Get “Enough” for Your Trade-in
. . . No Matter What You Paid for It
“A highly popular or desirable car with limited availability will depreciate more slowly
than a car that is in sufficient supply or less desirable.”
—Charlie Vogelheim
Vice President, Auto Development,
J.D. Power & Associates
Vice President, Auto Development,
J.D. Power & Associates
"...Negative equity is without a doubt the single most prevalent issue in the market today. The second is consumers’ revolving debt, or credit card balances, and the third is overall consumer credit scores (now driven by the housing crisis), in that order. We will never and I mean in my sincerest Massachusetts accent, neh-vah solve the last two problems without remedying the first.
"While watching the legislative hearings and key player interviews regarding the Big Three bailouts, I was vexed by how little attention was paid to this epidemic. Automobile negative equity continues to spread faster than a sneeze on a commercial jet. It cannot be solved by simply negotiating a better deal or purchase price at the dealership. Consumers buying below dealer cost still get nailed. It cannot be solved by some automaker Employee Pricing strategy so in vogue with the domestics. Rebates make the situation even worse, as you will come to see. To the automobile market and the industry as a whole, negative equity is the macro-financial equivalent to H1N1 Influenza. And Congress is off mixing up the wrong vaccine.
"Here is a classic example of a customer in this situation. I could not have done a better job painting this picture if I made the story up myself. With guilt I admit, despite the financial misery involved, it makes me chuckle. If it weren’t so serious, it might be funny. Therefore, I believe I have aptly named her “Jane Dough,” and placed my personal remarks in parentheses:.."
