Vroom-vroom — Car Dealers Racing to a New Finish Line

by James Hartman

Photo by Shamus Pons

 

With the announcement that the federal government will require a 90-percent improvement in fuel efficiency by 2050, one could almost hear the collective sigh of economists thinking, "Well, as if they don't have it bad enough..." Thing is, you could place every economist in the world end-to-end and they won’t reach a conclusion. And car dealers hereabouts say things are looking pretty good.

"Business last month was great," said Mark Campbell, general sales manager at Bill Hood Ford in Hammond. "We're up about 25 percent year-over-year." "Business is very good," said Adam Bowen, general manager of Rainbow Suzuki Imports in Covington. "Business is picking up" said Kenny Bothner, general sales manager of Eddie Tourelle's Northpark Nissan and Hyundai, also near Covington. "We have taken the turn for the better. From last year at this time to now is just incredible. We've seen the turn in the last three months." Not bad for an industry that a year ago was on the serious skids.

Shifting gears hasn't been easy in an automobile market – or an overall economy – that has proven about as reliable as a Ouija board. "We stayed pretty steady (during the 2008 gas crunch) but we had to adjust to the market," said Bowen. "When gas was $4.50 a gallon, we didn’t carry SUVs." Rainbow also has a seriously diverse inventory, which broadens the scope of its potential customers.

"I sell cars from $12,995 to $100,000," Bowen said, mentioning a list of pre-owned brands from Jaguar to Mercedes – and, of course, new Suzukis. And Rainbow also has a huge Internet presence. "We do a lot of Internet business, so it's all over the country," he said. "We've sold cars all over the world. You'd have a hard time shipping Chevys, but the products we sell get a lot more business that way." That’s certainly one way to keep it balanced and the business flowing.

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Breaking the Bank : Think You Can’t Get a Mortgage?

by James Hartman

Photo by Shamus Pons

 

The news has been grim for years now. Spurred-on by Congress, lenders made loans to people who really couldn't afford to pay them. Then sub-prime mortgages wrecked the banking industry. Then unqualified lenders led to mass foreclosures. The credit market got so tight you could bounce a quarter off of it – if you had a quarter left, or could find a place to borrow one. And all of it led to problems for homebuilders, both large and small, who couldn't make the payments on spec houses and had to shut their doors.

It was a very sad time.

It was also a lot of hooey.

Sub-prime mortgages accounted for only about three percent of all mortgages. Foreclosures spiked, but didn't really "soar." Lenders tightened credit requirements in response to federal regulators who, in the opinions of many, overreacted. The rest...well, the rest pretty much happened as presented. So while the trickle-down problems were real, the impetus wasn’t as cut-and-dried as some would have you think.

So here we are, three (or four, or five) market fluctuations later, with a new President, a new Congress, and a lending industry that either has its hands tied or has put on mittens, depending who you ask.

"There is increased government regulation that is making it more and more difficult for borrowers and buyers," said Matt Faust, president of First Community Bank, headquartered in Hammond. "It's getting more regulated every day. Despite the administration’s efforts to get banks to lend, we are actually being hampered by their own regulations."

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