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Bidders Could Have Had A V-8

Tribune photo by JULIE BUSCH

In Largo at Your Auction, small four-cylinder cars with good gas mileage, such as this VW Bug, are getting most of the attention.

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By MICHAEL SASSO The Tampa Tribune

Published: May 12, 2008

ST. PETERSBURG - The scene at an auto auction Wednesday might have been unthinkable just a couple of years ago.

As small sedans and compact cars rolled up to the auctioneer's stand, dealers would rush up, pop open the hood and start the bidding. When a big car or pickup rolled up, however, interest waned.

And when a luxurious SUV or an 8-cylinder truck rumbled up, things sometimes got downright ugly. Bidding for the vehicles often was so low for even apparently well-maintained SUVs that the auctioneer sometimes halted the bidding and moved on to another vehicle.

The atmosphere at Your Auction, a weekly auto auction in St. Petersburg, highlights the state of the used car market in the Bay area.

A shifting sales market for cars brought on by soaring gas prices and a soft economy has caused the value of small, fuel-efficient cars and trucks - especially Japanese and Korean ones - to rise. Meanwhile, the value of SUVs and big pickups has tumbled by at least $1,000.

Some owners want to sell their big trucks and SUVs and get into something more fuel-efficient or with a smaller monthly payment. Some large-vehicle owners say they can't sell them on their own and they're unwilling to trade them in for rock-bottom offers from dealers, who have too many trucks and SUVs already.

On the other hand, local car dealers complain that they are forced to pay higher prices for small cars and trucks. That should be good news for customers with small vehicles who can demand more for their trade-ins, said Tom Webb, an economist for Manheim, an auto auction company.

"Absolutely, if you have a mechanically sound vehicle, it has value and you should hold out for a higher trade-in value," Webb said.

Trend Affects New And Used

Demand for large and small vehicles has waffled in recent years as gas prices seesawed, but with gas above $3.50 a gallon and potentially hitting $4, economists and car dealers think people are switching to smaller vehicles for good.

In the past three years, sales of new 4-cylinder vehicles have caught up with sales of new 6-cylinder vehicles, according to research firm J.D. Power & Associates.

Sales of new 4-cylinder vehicles rose to 38.1 percent of all new car sales in the first quarter of this year, up from 28.5 percent of new cars sold in the first quarter of 2005.

In April, 4-cylinder vehicles outsold 6-cylinders 42.5 percent to 37.9 percent.

The shift is less dramatic in the used-car market, but it's still there.

Sales of 4-cylinder vehicles rose to 28.3 percent of all used-vehicle sales in the first quarter of this year, up from 27.5 percent in the same quarter of 2005.

Sales of 4-cylinders continued growing in April, reaching 29.6 percent of all used vehicles. Meanwhile, sales of 6-cylinder vehicles fell to 46.9 percent from 47.3 percent from 2005 to 2008, according to J.D. Power.

Locally, used-car dealers say sales of nearly all makes, models and sizes of cars are flat or down lately because of a weak economy. They also say, though, that sales of compact cars and small Japanese and Korean imports are faring better and driving much of their business.

That's causing many dealers to swap out trucks in favor of more fuel-efficient and less-expensive vehicles.

"Your Kias and your Hyundais are doing really well because they get such good mileage," said Kim Young of Terry's Auto Sales of Largo. She was among the car dealers who showed up at Your Auction on Wednesday.

"Your trucks are going for cheaper than your midsize cars," Young said.

Small vehicles are the only vehicles rising in value nationwide. According to data from ADESA Inc., a national auto auction company, the average wholesale price of a used compact car rose by 3.1 percent in March compared with March 2007.

Every other type of car or truck fell in price, with full-size pickups falling by a hefty 11.3 percent.

For example, a dealer ordinarily might pay $5,000 for a 2000 Toyota Corolla with 70,000 miles, said Mike Valdes, used-car manager for Bill Currie Ford, a Tampa dealership. These days, he said, the same car might fetch $6,000.
SUVs Lose Luster

The shifting sands in the auto market have caused a role reversal for some people trying to sell their cars. SUV owners are finding that no one wants their luxurious vehicles, while compact-car owners are in the driver's seat.

Doug Helfrick of Plant City said he listed his 2007 Honda Civic EX on Craigslist.org recently for $16,750 and sold it within two days for full price. The woman who bought it, Eileen Jacobs of Clearwater, said she wanted a safe, reliable, fuel-efficient car for her 16-year-old son.

Feeling the market's sting, though, is Michelle Barthle, who like a growing number of people owed more on the loan for her Ford Expedition than the SUV was worth. Dealers call this condition being "upside-down" on your car.

Barthle and her husband wanted a newer, more fuel-efficient vehicle, but were unable to sell the Expedition on their own, so they traded it to a dealer for less than they wanted and wound up losing $7,000 on the trade. Barthle and her husband purchased a Hyundai Sante Fe, a smaller, more fuel-efficient SUV than the Expedition.

"I'm hearing dealers that don't even want to trade some of these trucks and SUVs because they don't have anywhere to go with it," said Lynn Love, who operates Love's Auto Sales in Tampa.

In Town 'N Country, Connie Monche, 23, is near desperation as she tries to sell her 1998 Jeep Cherokee. She needs the money so she and her mother can move back to Brooklyn and put down money on an apartment. Until it sells, the two are stuck in the Bay area.

Monche posted the vehicle on Craigslist two weeks ago and has had no luck. Admittedly it's an old vehicle, gets relatively poor gas mileage and has racked up 132,000 miles, but it drives well and she had expected it to sell by now. It's listed for $3,200, but at this point, she admits she's willing to bargain.

Her Craigslist ad shows the frustration.

"OMG!" the ad reads. "Somone please buy my 98 Jeep. I just want to go home and this big red hunk of metal is the only thing keeping me here!!!"

Reporter Michael Sasso can be reached at (813) 259-7865 or msasso@tampatrib.com.

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