Lot sets record for used car sales

While many automobile dealers are struggling to survive, Edd Kirby Adventure Chevrolet, Chrysler, Jeep is experiencing record sales.

Joe Kirby, owner of the Dalton, Ga., dealership, has turned his attention to used cars, which reached all-time sales highs in April and again in June.

"I've never seen anything like it," he said. "We used to celebrate after (selling) 125 cars and throw a party after 135."

Edd Kirby Adventure sold 200 used cars in April and 220 in June. Mr. Kirby said.

"If we hadn't run out of cars, we would have sold more than that," he said. "When you sell 20 a day, they don't last long."

Mr. Kirby said he is replenishing his inventory as fast as he can, which he termed his biggest challenge.

Paul Taylor, chief economist with the National Automobile Dealer's Association, said Mr. Kirby is not unlike dealerships all across the United States that are focusing on used car sales while the economy remains in a slump.

According to a National Automobile Dealers Association report, average dealership sales are down more than 25 percent nationally.

Mr. Taylor said dealers in the past have sold about 16 new cars for every 12 used cars. The average now is 10 new for every 12 used.

"For some dealers, the ratio can be as high as two new for every 12 used," he said.

Used car sales will remain the best sellers until the credit crunch improves and there is dip in unemployment, which Mr. Taylor expects will peak at more than 10 percent in 2010.

The general state of the economy is highly affected by the stagnant housing market, which also will steer consumers toward used rather than new cars.

"There are 31 states, including Tennessee, seeing an end to the home price decline," Mr. Taylor said. "Chattanooga has better news than most because of the arrival of the VW plant and other enhancements to manufacturing and employment."

Mr. Kirby set his April used car sales record after purchasing about 120 used cars from Prebul Auto Group, which sold the inventory as part of Joe Prebul's bankruptcy proceedings.

He later purchased another 150 cars from Chrysler, which also came from Prebul.

He said the fear of being stuck with the inventory, which is almost double what he generally holds, forced him to price them aggressively.

"Even in such an economy as this, if there is a good buy, people will buy it enthusiastically," he said. "We plan on keeping this up somehow. Our goal by the end of the year is to break June's record -- to hit 300, really."