The Homa Files

Excerpted from  “Want a Used ‘Econobox’? Better Get in Line”,
WSJ: July 16,2008

The appeal of fuel efficiency is moving beyond the new-car market and creating a run on small used cars. Used economy cars … are now flying off the lots, and prices are rising.  Sustained high gasoline prices are pushing more drivers out of their gas-guzzling SUVs and into what were once called “econoboxes.”  

But because economy models haven’t been big sellers for the past few years, car makers have built relatively few of them. The resulting tight supply and strong demand have driven up prices.

“We find that the big ticket is 30 mpg,” says Norm Olson, sales operations manager for Toyota’s certified used-car business … Buyers are interested “in just about anything with four cylinders’ because those are the cars that will travel more than 30 miles per gallon.

For car shoppers, the run on econoboxes has a downside: Consumers have to pay top dollar for small used cars, even as they get lower trade-in values for their large vehicles. Some buyers may also be deterred by the higher upkeep costs of older cars  …  the average amount spent on a car in the fourth year of its life, according to J.D. Power & Associates, is $398..

Full article

http://online.wsj.com/article/SB121617183225056575.html

Thanks to MSB-MBA alum Jason Bates for the heads-up

Want more from the Homa Files?
 Click link =>  The Homa Files Blog

This entry was posted on July 17, 2008 at 6:17 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.