On a recent Friday morning, my neighbor was in her driveway, scuttling around her big cream-colored Subaru Ascent SUV. Doors were flung open, contents pulled out and boxed, surfaces wiped. She then climbed into the driver's seat and backed into the street.
This surprised me, as several of us were supposed to walk to the nearby Rockwater Marina for an outdoor yoga class taught by another neighbor. One of the attendees texted our missing member, who had been enthusiastic about attending. "Sorry, can't make it," she reported. "Something's come up."
A couple of hours later, she pulled back into her driveway--not in her big SUV, with three rows of seats, but in a smaller, sleeker, sportier Subaru Outback, which fit nicely into the space that the bigger vehicle nearly straddled.
My neighbors know that nothing in our pocket neighborhood happens without mention.
"How do you like your new ride?" I asked her. She loves it, she said, adding that the dealer had contacted her, not the other way around. "They said my [big] car was in high demand," and they'd like to have it in their inventory, while she could drive off the lot with the smaller Outback. "I said sure," which preceded the sudden Friday morning departure, important enough to skip yoga practice.
In a rare moment of grace, I didn't ask her if there was any money involved in the exchange -- from her to the dealer, or from the dealer to her.
Another friend tells me that every time he takes his car, also a Subaru and still under warranty, to the dealership for service, he gets a similar offer to buy back his ride. "Looking around the nearly empty lot, I can see why," he says.
Sparsely populated used-car lots are mostly a result of the global microchip shortage. "The chip fiasco wreaked havoc on the auto industry, causing sweeping production delays and reduced inventory," reports cars.com. "In turn, dealers are willing to pony up more cash to buy used cars and fill empty lots.
"Cars.com data shows that new-car inventory dropped more than 15 percent between February and April. When new-vehicle prices rise and inventory falls, shoppers go to plan B and opt for used cars. Consequently, used-car inventory fell and prices skyrocketed as demand showed no signs of slowing down."
Demand for a specific vehicle type impacts the value of a used car. Pickups and large SUVs are hot right now. With all the pent-up demand from the pandemic, prices are elevated across the board. That's why these so-called buy-back offers are proliferating.
Here's some advice from the website MotorBiscuit:
"While the offers made [by dealers] might seem too good to be true, the dealers are not flat-out lying to you. You just need to read the fine print and understand what it is that they are offering.
"For example, if they offer for you to trade in your current car for a new one with a special financing rate or possibly a heavy discount, you might not get both at the same time. Typically, you have to choose between saving money now (on the cost of the car) or saving money later (saving on interest).
"A new car deal can work just as much for the dealer as it does for you, and you might actually be able to get into a new car lease, or possibly a new loan with better interest, for around what you're paying for your current car, This works especially well if the newer model of your car is a redesigned version with new tech and styling."
In the wake of my friends' experiences, I wasn't surprised when, upon taking action concerning a recall notice for my two-year-old compact coupe, the following email showed up:
Karen,
We see that you have an appointment scheduled to visit our service department. The purpose of this email is to let you know that, based on the current estimated equity position in your present vehicle, we believe you can trade your 2020 vehicle for a newer vehicle with little to no money down, and potentially keep your current or previous payment of $206. Your new payment may be even lower!
To participate in this unique program, please reply to this email to schedule a VIP Appointment with your Vehicle Exchange Coordinator.
A VIP appointment? I might have been more impressed if the dealership had bothered to check on the status of my monthly payment; I'd paid off the balance within three months of getting the car, having financed it only because the sales rep knocked $500 off the price of the car if I did so.
And the dealership is probably are unaware that my car has a manual transmission (it took me months to track one down), which severely limits its circle of used-car customers; Carmax reported in 2020 that only 2.4 percent of shoppers want manuals.
At least the buyer wouldn't have to worry about the car being stolen.
The recall concerns a defect that may require replacing the engine, which would pretty much turn back the clock on my 2020 vehicle, which has barely 7,500 miles on the odometer (the car spends most of its time parked in front of my house, and I ride my bike to and from work).
Still, I might take advantage of that VIP appointment. The dealership may feel inclined to give me a brand-new top-of-the-line hybrid Ionique in return for my hot little hatch.
Karen Martin is senior editor of Perspective.
kmartin@arkansasonline.com