Second-Hand Code

Up to last week when John Citizen decided to buy a new car, he would ask his dealer what allowance he would get on his old one. Armed with an offer, he would shop around among other dealers in the same price range until he got a higher bid. Back he would march to the first dealer, who, hating to lose a new-car sale, would be likely to boost his first offer. If John Citizen were shrewd, he could play one dealer off against another until he got an allowance far higher than his old car would ever bring in the second-hand market.

To each & every automobile dealer in the U. S. last week went a fat little pocket manual to put a stop to this competitive method of price cutting. As an appendage of the automobile dealers' code under NRA, the manual listed the maximum trade-in allowance on every make and model of car. No dealer could offer a customer more without violating the code. risking punishment. The prices listed were compiled from nation-wide second-hand sales by the National Automobile Dealers Association, which issues its Official Used Car Guide on prices each month.

The U. S. is divided into 20 trade areas, and each has its own Official Guide. Used-car prices vary widely because of local preferences for makes and types. Transportation costs, added to the f. o. b. price. also influence the second-hand market. Thus the listed prices are actual market values in each area. In compiling the Official Guide each month the lowest 20% of reported sales are eliminated to keep the averages from being weighed down by forced or junk sales.

But no dealer may allow a customer the full price listed in the guide. He must deduct a charge for handling and reconditioning, ranging from 5% to 15% depending upon the age of the car. The official guide price of a Ford cabriolet, 1930 model, in the New York area is $210. The mandatory deduction (15%) fixes the maximum allowance to a customer at $178.50. Other Guide prices in District No. 2 (five passenger sedans, 1930 models): Buick 30-57, $425; Chevrolet, $195; Chrysler 70, $300; Franklin, $700; Hudson Greater 8, $265; La Salle $575; Nash 480, $375; Packard 7-26, $600; Studebaker 8-FC, $365.

When a dealer subscribes to the Official Guide he promises not to divulge its listed prices for publication. The N. A. D. A. wants to give its members a chance to work off their trade-ins at a price higher than the average listed. But last week almost any dealer would tell a customer the listed price on a certain model on request. In the long run used car prices were expected to stabilize close to what consumers are sure to learn is the average in their trade areas.

The consumer may not get so large an allowance under the code but he will at least get the benefit of strict provisions against misrepresentations. The unhappy buyer of a "doped" car can go straight to the district code Administrator with his tale of a tampered speedometer, sawdust in the gears, ground cork in the differential.

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