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American Morning

Secondhand Ride

Aired November 04, 2002 - 09:49   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


BILL HEMMER, CNN ANCHOR; If you have some worries that the economy might be keeping you from getting the car you need or you might be thinking of going fair new car because interest rates are so low, we have a consumer adviser today, Clark Howard of WSB Television and Radio, says buying a used car could be the best way to roll. He's here to tell us why. How so? Why now?
CLARK HOWARD, WSB TELEVISION AND RADIO: Unbelievable deals on used cars right now. There are a couple of factors. First, there were a huge number of vehicles leased two and three years ago. Those are coming back into dealer lots. Plus, because of the zero-percent financing, what do people do with their old car? They trade it in. So right now, dealers have, believe it or not, it takes them three months to sell your used car, when it comes and sits on their lot. Huge oversupply.

HEMMER: Now, listen, tell me more about the oversupply, though. Give me an example of how this example plays out?

HOWARD: What happens is you have a double whammy. You have this huge number of used cars, sitting there, plus all the incentives for people to buy new cars. So people have no desire to buy used cars, unless the price drops and the prices of the used cars have dropped so significantly that you can steal a deal. Do you know some used cars now, two years old, are worth only 40 percent of what they were new?

HEMMER: Is that right? Within 24 months.

HOWARD: That's right.

HEMMER: A Dodge Caravan, I'm told, a new Mazda Millennia. Give us an example about new, versus used and how--.

HOWARD: Gigantic decreases in value. If you buy a 2-year-old Caravan, you're going to pay a tiny fraction of what that is new. And this is true with car after car after car, especially, if you're looking at American brands where the zero-percent financing has been so big. You're going to save a ton of dough, looking at those American cars, used instead of new, not what the automakers want you to think about.

HEMMER: I got you. And that's why you're here, to tell us about it.

HOWARD: That's right.

HEMMER: And now, listen, if I want to go out and check on the quality of the car, make sure you don't get a lemon, there's are a couple of places you can go that have been really good for years, actually.

HOWARD: Yes. Well, first thing, I want you to go to Consumer Reports magazine. Go to the library and Look at the April issue of Consumer Reports. They'll tell you which used cars...

HEMMER: April? Why April?

HOWARD: Because that's their annual car-buying guide. They'll tell you which used cars to buy, which ones to avoid. And then I want you to have an independent mechanic check the car out. Once you know the price is fair at Edmunds.com. And you know what else? Pull a car facts report that'll tell you if the car has been in a wreck or anything else like that.

HEMMER: And you can do all that stuff online, too. I've done it myself. It's really good stuff. Tell me about Canada.

HOWARD: Canada. Well, it's a really pretty country up to the north.

HEMMER: That it is, as a matter of fact.

HOWARD: Yes. But they have a much weaker dollar than we do and Canadians don't make as much money and because of NAFTA, you can buy used cars that are legal to drive in the United States and Canada, at a big discount, versus here, but there are a lot of odometer rollback problems with the Canadian cars. You've got to check that odometer. The best way to do that is an independent mechanic, again.

HEMMER: Thanks for checking us out.

HOWARD: Sure.

HEMMER: Clark Howard, good luck on the radio, too.

HOWARD: Thank you very much.

HEMMER: Good syndication working right now.

HOWARD: Yes.

HEMMER: Happy to see it. The guy works hard.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com







Aired November 4, 2002 - 09:49   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BILL HEMMER, CNN ANCHOR; If you have some worries that the economy might be keeping you from getting the car you need or you might be thinking of going fair new car because interest rates are so low, we have a consumer adviser today, Clark Howard of WSB Television and Radio, says buying a used car could be the best way to roll. He's here to tell us why. How so? Why now?
CLARK HOWARD, WSB TELEVISION AND RADIO: Unbelievable deals on used cars right now. There are a couple of factors. First, there were a huge number of vehicles leased two and three years ago. Those are coming back into dealer lots. Plus, because of the zero-percent financing, what do people do with their old car? They trade it in. So right now, dealers have, believe it or not, it takes them three months to sell your used car, when it comes and sits on their lot. Huge oversupply.

HEMMER: Now, listen, tell me more about the oversupply, though. Give me an example of how this example plays out?

HOWARD: What happens is you have a double whammy. You have this huge number of used cars, sitting there, plus all the incentives for people to buy new cars. So people have no desire to buy used cars, unless the price drops and the prices of the used cars have dropped so significantly that you can steal a deal. Do you know some used cars now, two years old, are worth only 40 percent of what they were new?

HEMMER: Is that right? Within 24 months.

HOWARD: That's right.

HEMMER: A Dodge Caravan, I'm told, a new Mazda Millennia. Give us an example about new, versus used and how--.

HOWARD: Gigantic decreases in value. If you buy a 2-year-old Caravan, you're going to pay a tiny fraction of what that is new. And this is true with car after car after car, especially, if you're looking at American brands where the zero-percent financing has been so big. You're going to save a ton of dough, looking at those American cars, used instead of new, not what the automakers want you to think about.

HEMMER: I got you. And that's why you're here, to tell us about it.

HOWARD: That's right.

HEMMER: And now, listen, if I want to go out and check on the quality of the car, make sure you don't get a lemon, there's are a couple of places you can go that have been really good for years, actually.

HOWARD: Yes. Well, first thing, I want you to go to Consumer Reports magazine. Go to the library and Look at the April issue of Consumer Reports. They'll tell you which used cars...

HEMMER: April? Why April?

HOWARD: Because that's their annual car-buying guide. They'll tell you which used cars to buy, which ones to avoid. And then I want you to have an independent mechanic check the car out. Once you know the price is fair at Edmunds.com. And you know what else? Pull a car facts report that'll tell you if the car has been in a wreck or anything else like that.

HEMMER: And you can do all that stuff online, too. I've done it myself. It's really good stuff. Tell me about Canada.

HOWARD: Canada. Well, it's a really pretty country up to the north.

HEMMER: That it is, as a matter of fact.

HOWARD: Yes. But they have a much weaker dollar than we do and Canadians don't make as much money and because of NAFTA, you can buy used cars that are legal to drive in the United States and Canada, at a big discount, versus here, but there are a lot of odometer rollback problems with the Canadian cars. You've got to check that odometer. The best way to do that is an independent mechanic, again.

HEMMER: Thanks for checking us out.

HOWARD: Sure.

HEMMER: Clark Howard, good luck on the radio, too.

HOWARD: Thank you very much.

HEMMER: Good syndication working right now.

HOWARD: Yes.

HEMMER: Happy to see it. The guy works hard.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com