Hard Times on the Used-Car Lot, or How to Sell the Sizzle

Frank Gromak’s gaze is toward his driveway and sidewalk, whence all blessings flow.

Along them come the “ups,” the prospective buyers of Gromak’s used cars. But lately, the ups are down.

“In good times, these cars would be gone in two or three weeks,” Gromak says, gesturing to the 30 or so Toyotas, Nissans, Audis and Oldsmobiles on his small used-car lot.

“We sold 30 (in October)--that’s one a day. That’s not really a good month,” he says. “Nowadays, life is only as good as you can make it.”

Gromak says that despite the recession, they’re making it OK at the Costa Mesa Car Co., located for 10 years on Harbor Boulevard. “For a small lot, 25 or 30 cars a month, that’s pretty good for now,” he says. “You’re not going to make a lot of money, but you’re gonna stay in business.”

And staying in business is a significant achievement, says Daniel Minaesian, the other salesman on the lot this day.

“This business ain’t a picnic. People open up a place and lose their shirts. They think it’s easy. The one on the corner changed twice in three years. On Bay Street, twice in two years. Down from there, at least twice in two years.

“They misjudge the market. They depend on their own taste, but it may not be the stuff that’s selling.”

For the first time since World War II, used cars are outselling new ones--but there’s a catch. New-car sales are way down--10.2% below last year’s sub-normal figures. And the increase in used-car sales has been largely in “nearly new” current models such as retired rental cars.

Places like the Costa Mesa Car Co. are trying to adapt to keep in the black. Trouble is, the used-car business long ago boiled down to its basics, Gromak says. There’s not much room for adaptations. “You scale your inventory to what’s selling. I don’t know what else you can do.”

So while there may be a Porsche or Mercedes on the lot, “we concentrate on the $2,000-to-$6,000 range--dependable, good used cars. That’s what’s selling nowadays.”

There is plenty of time to talk it over. It is 3 o’clock on a warm afternoon, and no one is on the lot except the people paid to be there.

Gromak and Minaesian are sitting on an old van seat propped like a sofa under the sales office awning. Around them is the merchandise. An orange Porsche beckons the sporty-minded. A dark Oldsmobile marked Credito Facil suggests “basic transportation.” American flags fly from car antennas, whether Mercury or Mazda.

“Lots of people who need transportation, it’s tougher for them to get financing,” Gromak says. “We have to finance in-house here; we started in July. It does put off the profit for a while. There’s a few lean months until it gets started.

“Most people who can afford something--the ones who have good credit--are holding onto what they have. People who have money aren’t spending it now. People who really need cars, we have to carry them.

“You try to control the risk: as much down as possible and as short as possible--six months, 12 months, 15 months. And you can’t smile until you get all your payments in. We might have that car back on the lot in a month to resell.”

“You try to keep good-looking merchandise,” Gromak says. “You put up balloons and banners, short of sign pollution. You turn on the car emergency flashers. Yeah, someone pulled in because they saw the flashers. They’d never noticed the lot before. You just try to create traffic.”

Nowadays, the lot stays open and the salesmen stay on duty 12 hours a day. Gromak works seven days a week and has taken on the bookkeeping as well to cut costs.

A woman walks up the driveway and begins eyeing a van. Gromak makes the approach and after a few minutes is maneuvering her toward a cheaper car. After five minutes, she walks away.

“It was something she couldn’t afford. She has a down payment but no credit. She’s bringing her husband back later to look at a couple of cars.

“I should have got her name and number and called her,” he says, shaking his head. “Most salesmen hate to do it. They’re not used to doing it, because in good times, when someone left, another one would be coming right in.”

“What worked in car sales isn’t gonna work any more,” says Minaesian. “Dad used to be able to support the family. Now Mom and Dad can’t do it together. New-car dealers started five-year financing. Now people can’t get out from under their old car after three years like they used to.”

A young man walks onto the lot and starts leering at the Porsche. Gromak recognizes him instantly as a browser. “He went right up to the most expensive car on the lot. But you don’t ignore anybody.”

“Just looking,” the youth says, and Gromak retreats to the sofa.

“These lots get in trouble and they run high pressure,” says Minaesian. “People don’t respond to that stuff any more. I been selling cars a lot of years. If you don’t pressure them, they come back.”

“Some people like that--the high pressure and the b.s.,” Gromak says. “You can tell. Some people like the hustle, some people don’t. People buy the salesman, not the product. If they like him, whatever he wants them to buy and points them to, that’s what they buy.”

Fade out, fade in, and it’s nighttime. Sitting on the sofa is a young couple, “a couple of satisfied customers,” Gromak quips. They chugged in driving a dying ’79 Toyota and Minaesian soon has them interested in an ’83 Chevy Citation. They all head out for a test drive.

There is no signature yet, but the car is as good as sold, Gromak says. “They bought the sizzle.”

Eh?

“They bought the salesman. They buy the sizzle, not the steak.”

Gromak has agreed to take their Toyota in trade, even though “the brakes are metal-to-metal and the transmission’s trashed.” The lot man pours cat litter onto a puddle of crankcase oil where the Toyota had paused to die.

“They drove it until they can’t drive it any more. That’s what people are doing nowadays,” Gromak says. “We’ll take it, clean it up, fix the tranny (transmission), and it’ll be OK for $1,500 or $2,000.”

The sale has lifted spirits and reminded all why they haven’t quit this business to go into, say, new-car sales.

On a used-car lot, Minaesian insists, there’s a certain tranquility.

“And people come back for repeat business. But you don’t date customers. Never a date on the first car. I went out with one woman once, but only after the third car.”

The couple drive away in their $1,995, pay-it-off-in-eight-months Citation, and Gromak prepares to shut down.

The books will be easy today: one sale, one solid prospect, one flaky prospect.

“One a day--that’s all I ask for right now,” he says. “That’ll keep us afloat.”