It’s still hard to get a used car in Alabama: ‘We’re still overly frustrated’ – AL.com | CarTailz

Scotty Colson helps run an inpatient alcoholic recovery program in Birmingham. You spend several months getting sober, working on life skills, finding a job, and starting your own business. Having your own bikes helps with that independence, so the Jimmy Hale Mission charity has an in-house mechanic who repairs donated cars to give away to graduates.

In recent years, people willingly donated old cars to the program. Now, with the high used car prices, the supply has almost completely dried up.

“When they finish our program, they’re free from, they know how to deal with their addiction, and they work towards being free, to have more choices, and transportation gives them more choices,” Colson said.

According to a report by CoPilot, a car shopping app, average used car prices rose to an all-time high of $33,341 last June, $10,046 above normal levels. This corresponds to an increase of 43 percent.

Although used car prices began falling last month after rising thousands of dollars above normal rates, auto loan arrears are at their highest in a decade, according to TransUnion, a consumer credit agency.

Last weekend, a Jimmy Hale gifted a graduate student an older 2003 Maroon Dodge Malibu sedan. It was the first car the program had to give up in over a year. Colson believes people who would otherwise have donated their old clunkers discovered during the pandemic that used cars that were once worth about $3,000 after repairs are now almost at a loss when resold due to shortages in the supply of autochips during the pandemic $5,000 drove used car inventories in the US to a halt

Laith Hunedi, Southside Automotive Group, started his own car sales business in downtown Birmingham after years of helping his father at his ‘Buy Here, Pay Here’ car park in Hoover. He observed first-hand how the auto market completely changed during the pandemic.

“Before the pandemic, we used to be able to drive to one of our local auctions and fill up 20, 30 cars in two, three hours. Now you have to dig really deep,” he said.

He said he doesn’t expect the situation to change dramatically any time soon and that it’s a dire situation for many car buyers who are struggling financially. His phone rings about 25 times a day and people ask if he does no credit check financing, which he doesn’t.

The high cost of buying a car has hit Alabamaans, who work hardest in low-paying jobs.

“I’ve turned away more (customers) in the last six, eight months than I’ve been here in the last four years,” said Ted Black, general manager at Holmes Motors, a Birmingham-based used car dealership of the poor, on an in-house basis – Offers financing.

Lauren Tancock, 34, works at the UAB Scholarship Office. Her husband works in IT and is studying for a degree. In 2021, a tornado destroyed their homes and two cars in Fultondale. They had a toddler at home and needed to replace their vehicles quickly, but the timing was unfortunate for them.

Holmes Motors in Birmingham

In 2020, Tancock bought a used black 2019 Nissan Rogue for $13,000. After the tornado, she wanted to replace it, but didn’t find many options.

“We ended up going to four or five dealerships and saw the same car I had, which was older now, right because we’re talking about nine months later, and had more miles (and) was up like $18,000, $19,000.”

Her husband had a similar experience and was unable to purchase the same amenities he enjoyed in the wrecked car. In the end, he settled on a used vehicle, which has now become a money pit, Tancock said. It has issues with its exhaust, brakes and more.

Molly Britain is a social worker with ELI Thrive, a social services group helping people in the Eastlake area of ​​Birmingham improve their budgeting skills. She said that as the used car market tightened, her customers were exposed to increasingly predatory lending as they were forced to pay ever higher interest rates and selling prices for cars. Buyers have little bargaining power, especially when their credit rating is poor.

“I’ve had clients paying $700 a month for a KIA Soul because it’s the only product available and their credit history isn’t usually in great shape when they first come here,” she said.

At Jimmy Hale, many residents can get good jobs at Mercedes or Tyson, Colson said. These companies have locations far out of town and offer shuttles for a fee to make it easier for employees to get to work. For other jobs where a shuttle isn’t an option, not being able to afford a car has a knock-on effect.

“If they say, ‘We’ll put you on the night shift, then you have a transportation problem. If you can’t get the job, you lose the job. If you lose your job, you lose your home. If you lose your shelter, go back to where you were when you came to us,” Colson said.

AnthonyTaylor

Anthony Taylor was gifted a car by local charity Jimmy Hale Mission

The Eastlake residents that Britain works with typically have jobs in fast food or at petrol stations. Her work is far away from where she lives and not easily accessible by bus. She said a woman spent two hours taking the bus to work at Whole Foods. If she could have driven, it would have taken 15 minutes.

“If they don’t have a car, they can’t come to work. If they can’t come to work, they don’t get paid, so it seems like the compromise is worth it for them,” she said of paying high prices for used cars.

Hunedi said when customers come to him, especially people he’s previously sold cars to, he notices that it’s harder for them to afford a vehicle now.

“I’ve found that it’s much more difficult to afford a car. They have to think about it once, twice, thrice before they pull the trigger,” he said.

The Tancocks, who had lost all their furniture in the Fultondale tornado and were looking for a place to live, were paying so much on their car down payments that it was becoming harder for them to get a mortgage to buy their house replace, especially given the tightness in the housing market at the same time. They ended up buying a house in Gardendale and paid more for it than they intended.

“We’re still extremely frustrated,” Tancock said.

Tancock’s husband is just finishing college and they are considering moving depending on job opportunities. She worries they paid more for their house and cars than they can sell, and that might stop her from leaving.

“We are very concerned about the resale value of everything as the economy appears to be closing down.”

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