Used Car Dealer Says Customers Asking For Payment Plans On $2,500 Cars Can’t Afford To Trade In Either, While His $1,500 Camry Was Gone The Same Day

Brandon runs a small used car lot that sells nothing above $5,000, and he says the number one question he hears every single morning has nothing to do with horsepower or mileage. It is, “Do you finance? I don’t have $2,500 sitting in my bank account.”

A long row of parked cars inside a large dealership building.

Even for a beater priced at $2,500 or $3,000, he says, shoppers are asking for an easy payment plan because coming up with that much cash has gotten hard. He shared his view from behind the desk on the YouTube channel @RealCarDealer, and it is not a cheerful one.

A $1,500 Camry With 300,000 Miles Was Gone Within Hours

The lot was busy the morning he filmed. Brandon says three or four test drives were already out before 11:00, and he caps it at four cars at a time so his small crew can keep up.

One of the new arrivals was a Toyota Camry priced at $1,500. He says he had about $1,300 in it and was not trying to make money, since he bought it mostly to show people how a four-cylinder Camry with 300,000 miles can still drive great. Within about four hours of the stickers going on, the first person to drive it bought it.

The quick sales kept coming. A Nissan Sentra went for $2,500 after he put roughly $1,400 into it, a $1,100 profit, and he says it sold within a day or two of being posted. He adds that this Sentra has a regular transmission rather than a CVT, which he says he avoids at auction.

Owners Cannot Trade In Because They Cannot Afford The Next Car

Here is where Brandon says the real squeeze begins. His lot buys its cars from new car dealerships, and those cars show up when somebody trades in an old Camry for a brand new one.

Right now, he says, those owners cannot swing the upgrade, so they hang onto the older car instead. “They’re keeping these older cars that I need to have here at my car dealership,” he explains, and that makes it harder every week to find the $5,000-and-under cars his customers want.

In his words, the cure is simple even if it is not easy. New cars have to be bought, old cars have to be traded in, and those trade-ins have to make their way to the auction where he shops. Until that chain of sales gets moving, he says, his lot is just surviving instead of thriving.

He Says He Has Been Cash Flow Negative For Seven Months

Then Brandon turns the camera on his own books. He says his business has been cash flow negative for the last seven months and that, if he kept going the way he was, it would go under.

His first move was to drop paid advertising. He says he was spending $5,000 a month across Carfax, CarGurus and OfferUp, and cutting all of it saves that money. He admits that could backfire by slowing sales, but he says advertising was the easiest lever to pull.

The next step was harder. He says he had to let some staff go, which he calls one of the hardest things a small business owner will ever do.

The numbers he shares are blunt. His monthly running costs have been around $47,000 to $48,000, not counting paychecks for him and his wife. After the cuts finish rolling off in about a month, he expects to land in the mid-$30,000s, around $36,000 to $37,000. He says that would shrink his break-even point from about 50 cars a month to about 40, and in all he figures he has trimmed $10,000 to $12,000 from monthly costs.

Gas Prices Left A Tahoe Sitting While Minivans Flew Off The Lot

Brandon says the pump price is shaping what sells. He points to a Tahoe near the front of the lot that he has marked down three or four times, selling it for just about what he has in it, and it still will not move.

Meanwhile, he says he has sold six or seven vans since that Tahoe went up for sale. When gas is expensive, families look for something easier on fuel than a third-row SUV, and he says calls for minivans come in all the time.

So he priced a 2013 Dodge Grand Caravan at $3,000 with about $1,400 into it, expecting it to go quickly. He put a 2013 Subaru Outback at $4,500 with $3,000 invested, and a 2007 Honda Pilot at $3,500 with $2,300 in it. Toyota, Lexus and Honda vehicles are among his best sellers, he says, and a nicer Subaru usually brings the top of his price range.

Not every car goes that smoothly. A 2014 Ford Edge sold for $3,000 against $1,910 invested, a $1,090 profit. Another car that had been marked down again and again, from $3,000 to $2,500 to $2,000, finally left at $1,800 and $2,000 out the door with $1,650 in it. Brandon says he was just glad to see it gone.

Why He Says Selling Is Not The Problem, Buying Is

With 30 or 40 cars on the hill, Brandon says he can sell about 10 a week and break even. His trouble, as he puts it, is “being able to freaking buy cars.”

He blames high gas prices, rising everyday costs and recent inflation numbers for making people save money for needs instead of wants. And he says nobody needs a brand new car, so fewer people buy them and fewer used cars reach the auction.

He expects the next five or six months, at least until tax time, to be about survival and covering the monthly bills. He adds that he is worried and stressed about it, and he jokes that his face shows it.

What Buyers Can Take From A Small Dealer’s Lot

Whether you are shopping or thinking of selling, Brandon’s account offers a few practical lessons for anyone who needs a car in this market.

Cheap cars move quickly. The cars Brandon described sold within hours or days, so have your cash or financing ready before you go look.
Think about fuel costs. He says families are gravitating toward minivans and smaller SUVs, so a big three-row SUV may sit longer and give you room to haggle.
Look at the transmission. He says a regular transmission is a different animal from a CVT, so check which one a car has before you buy.
Do the math on a trade. If you are thinking of trading up, remember the cost of the next car, not just the value of the old one.

The last lesson may be the simplest one. Cars that are cheap to buy and run forever, like a 300,000-mile Camry, are exactly what a lot of people are reaching for right now.

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