Running on empty

AS THE LIGHTS go out on gas pumps all over rural Canada, it may come to this:

Somewhere in the Haliburton backwoods there lives a man who needs a full tank of fuel just to keep his full-sized pickup gassed up – half a tank to get to the nearest pumps and the other half to get the truck back home.

That’s a preposterous scenario that becomes more plausible with each closing. A stranger driving the 135 kilometres from Cardiff to the Atherley side of Orillia would see only one gas station along the way, at Irondale.

If she knew the territory, she’d know that there were pumps only a few hundred yards up Highway 35 at Norland, but that’s it. Otherwise, she’s out of luck, running on empty.

Once, in my memory, there was gas at Gooderham and Tory Hill and Kinmount, then west from Norland at Uphill and Head Lake and Sebright. All gone now; only are the Irondale General Store and the right-hand turn at Norland remain.

The story is much the same on Highway 35, where there used to be pumps at Moore Lake and Miners Bay, Halls Lake and Pine Springs.

Kinmount folks who once bought their staples at the local grocery, pass right by a bigger supermarket on their way to the pumps in some other village. If you happen to be a retail hub, as Minden is, you just shrug your shoulders and say thank goodness for Canadian Tire.

It’s happening all across the country. According to a report by MJ Ervin and Associates, the number of gas bars in Canada declined from 20,360 in 1989 to 12,710 in 2010.

The pattern is the same closer to home. In our own county and in the City of Kawartha Lakes, 14 of 65 gas stations vanished between 2007 and 2011.

Bureaucracies, both private and public, make sound business decisions in the name of efficiency and modernity. Schools, bank branches, gas stations, all disappear, yank the heart right out of village life.

One thing bureaucracies can count on is that little newspapers, like this one, lack the resources to explain the forces that threaten their communities. Certainly, it’s beyond my understanding.

Change sneaks up on us until, say, Lucky Taylor shuts down the last pumps in Kinmount. A village wrings its hands and then moves on. Once Kinmount had four service stations. Now it has none.

Service stations. There’s a clue in those words. In my childhood, pumps stood in front of auto-repair shops. Technology and new-car warranties shut down the old village garages. In 2010, only eight per cent of gas retailers had service bays.

That’s according to MJ Ervin’s National Retail Petroleum Site Census for 2010. That report says that in 2010, when the average pump price was $1.03, the retailer’s margin was 6.8 cents.

Margin is the difference between wholesale and retail. That margin must cover the retailer’s mortgage, wages, taxes, insurance, light, heat – all the costs of doing business.

In 2010, about half of gasoline retailers were independent, as Lucky Taylor was. Independents have so little leverage that Lucky says his margin was somewhere between two cents and less than zero.

Some perspective: Let’s suppose one of those disappeared gas stations along the road to Atherley sold two million litres a year, more than usual for a rural outlet, and managed to keep its margin as high as two cents.

That works out to a gross margin of $40,000 a year, which must cover all the costs of doing business. One of those costs is the $500,000 Taylor says it would take to install new, double-walled tanks to meet provincial standards.

A decision to keep down prices by not accepting credit cards kept Lucky Taylor’s Kinmount station very busy, but, even for him, the numbers stopped making sense.

Assume he somehow kept his margin as high as two cents. Just to pay down the principal on his new storage, he’d have to fill up the empty tank in my little Toyota pickup truck 14 times an hour.

Add a modest wage to the calculation and you raise the ante to 25 hourly fillups. That’s on an unlikely two-cent margin. Throw in the interest on the storage-tank debt and all of your other ordinary costs and you’re out of business.

Fifty-five miles on an empty tank. Irondale to Atherley.

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Extended Car Warranty: Used Car Dealers to Benefit

ACCRINGTON, England, March 21, 2012 /PRNewswire via COMTEX/ –
According to the Warranty Group, car dealers are finding that there is much more attention being paid to older, less popular second hand and used cars, quite simply because they are being backed with an extended used car warranty.

The company applauded the idea 12 months ago and they are saying that it has been a wise move from the second hand car dealers. The Sales and Marketing Director, Ian Simpson agreed that it was a good idea and a good way to forward.

He said that the buying power of second hand car buyers has somewhat ‘diminished’ over the last few years as stock levels lower and prices rise and so far in 2012 this trend seems to have accelerated. It’s because of factors like these that there are so many second hand cars that are being backed with car warranties.

Talking about car warranties, Mr. Simpson said he believes that a stronger car warranty helps give the people who are buying a car some kind of ‘financial safety net’. Essentially for those buyers who are wary about the history of the car they’re buying but they can also be vital for dealers.

This is something that Mr. Simpson thinks could be in place for a while yet. Speaking about it, he said: “Customers have now been looking for a higher and higher level of protection against unexpected costs for some years.

“It is a trend that shows no signs of abating and, alongside a general new car market move towards longer warranties, means that customers now desire a very comprehensive level of used car warranty cover.”

If you have a used car and you’re looking to buy a warranty for it then you should have a shop around and check out Warrantywise to see what they can offer you. Not only do they offer a wide range of different warranties, they also offer good value for money.

Media Contact Details

Scott Baxter
Warrantywise
Clayton-le-Moors
UK
+44(0)800-169-7880
Email: info@warrantywise.co.uk

SOURCE Warrantywise

Copyright (C) 2012 PR Newswire. All rights reserved

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Sunset CPOs

If you know which cars are slated for a remodel or going away forever you have a huge advantage when bargaining for a CPO car. And if a car brand dies altogether, as recently happened with Pontiac and Saturn, your advantage is even greater.

Generally, when a generation is at the end of its life cycle, there is a sell-down of the outgoing model, said Edmunds.com analyst Joe Spina. This is sometimes necessary if there is excess inventory due to overproduction or because demand drops in anticipation of the new model. During the sell-down, prices on new vehicles drop and that can put downward pressure on used prices [for that same model].

A large number of makes are being discontinued in the US after the 2011 or 2012 model year, including the Cadillac STS and DTS; the Dodge Caliber, Dakota and Nitro; the Chevy HHR crossover; the Mitsubishi Eclipse and Endeavor; the Honda Element; the Mazda RX-8; the Buick Lucerne; the Ford Ranger pickup; the Volvo S40 and V50; and the Jeep Compass and Patriot.

Some of these vehicles are still available new at Southern California dealerships as the stock is run down, while others have already disappeared from new-car showrooms. But all are currently available as certified pre-owned vehicles.

Cadillac offers a good (if unscientific) example of the difference in CPO prices between models that will live to see another day and those that are being discontinued. The MSRP on a new 2011 STS sedan is just over $47,000, but CPO versions of the same car have been going for $29,000 to $34,000 at Southland dealerships. Thats a 28% to 38% drop off from brand new. Southern California CPO prices for the 2011 Cadillac CTS-V sedan which is not being discontinued are averaging less than 10% drop-off from MSRP.

Such dramatic price differences may not be the norm for all models, but its a good bet that buyers can snag deals on vehicles that are soon driving off into the sunset.

Spina suggests that CPO shoppers thoroughly research both their target vehicle and its brand-new counterpart before arriving at the dealership: Know the MSRP, the Edmunds True Market Value which will be less than MSRP on the model being sold down deduct consumer and dealer incentives, and consider the cost of financing because interest rates are generally better for newer vehicles.

Going to the dealership armed with this sort of information can give the buyer more leverage in negotiating. Conversely, if the information seems to work in the dealers favor, the consumer can avoid those conversations.

Buying a model that is going to be discontinued or substantially revamped may not be the right move for everyone. Jack R. Nerad, executive editorial director of the Kelley Blue Book website, suggests some soul searching before making this decision.

First, know what is important to you, Nerad said. If you are simply seeking transportation, it shouldnt matter to you if the vehicle you are about to buy will be succeeded by a newer version, especially if you plan to drive that vehicle for an extended period of time.

If you like to stay more current, you should avoid vehicles about to go through a major change. But if you dont care that the model will look a bit dated, you might find that an opportunity [exists] to get that vehicle at a discount versus what the market would have asked for it in other circumstances.

As Nerad suggests, its important to figure out how long you may be driving your CPO.

Buying a model that [is no longer] being built can save you lots of money, because discontinued models tend to have low resale value, Spina said. Thats great when youre buying a used car but not if you ever want to sell it.

Before jumping on a CPO make or model thats no longer made, buyers should also make sure they will be able to get it serviced. Some discontinued models share components with cars that are still in production. For example, a discontinued Saturn Aura can often be serviced with Chevy Malibu parts.

Getting parts and service for a used car in that situation would be no big deal, Spina said. But if the discontinued model is rare, or doesnt share parts with other cars, getting it serviced will be difficult.

Also determine how the warranty differs on both new and CPO models of the same car. Warranties are often based on the in-service date when the vehicle was originally sold as new. If its resold again while still under warranty and the warranty is transferable the CPO vehicle still has great value when resold, Spina said.

Joe Yogerst, Custom Publishing Writer

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