Clunkers & Creampuffs

Chapter 19: Everybody Drives (1960s to 1980s)

Near-Universal Reliance on Autos in 1960s and '70s

by James M. Flammang

Without the used car, the dream of private
transportation for virtually everyone would
never have been more than fantasy. Imports,
like this Swedish Volvo PV544, took longer
to break into used-car market.

By the start of the 1970s decade, the dream of a car for practically everyone seemed to be almost a reality. Despite only a 26-percent rise in new-car sales from 1955 to 1966, the number of autos in use grew by 57 percent. Between 1954 and 1965, the number of multi-car households rose from 4.2 to 11.8 million. By the end of the Sixties, almost 106 million Americans had a driver's license – 12 million more than in 1964.

New-car sales by franchised dealers set a record in 1965 and again in the following year, then peaked at nearly 9.8 million in 1973. Used-car sales also were running strong. In fact, they continued to account for much of the hefty growth in American motoring. Through the Sixties decade, the number of used cars purchased annually never fell below 11 million.

Statistics, as before, were elusive and shaky for a couple of reasons, and shouldn't be taken as gospel. Most importantly, it's always been impossible to count private sales accurately. Nobody could say for sure how many used cars were sold in a given year, and for what price. During the 1970s, for instance, private sales were estimated at somewhere between 12 and 38 million per year. That's quite a spread to consider, for anyone attempting to make judgments on the used-car market. In addition, not all used-car dealers were fully transparent about their business operations and sales figures. Not all of them belonged to relevant trade associations, either. Even the total number of active dealers was hazy.

A new breed of consumer had been developing. He or she wanted value and economy, whether buying a new or used vehicle. As one Buick dealer put it in 1959, people used to "want to brag about how expensive their car was; now they want to brag about how cheaply they bought a car."

After years of proposals and opinions about the automobile business from governmental and trade organizations, several relevant laws were passed. First came the Truth in Lending Law, in 1969. Applying solely to new vehicles, it required financing sources to state cost, loan terms, and conditions of credit approval in a uniform manner, so details could be compared.

Three years later, the federal government passed an odometer law, with the goal of finally bringing those rollbacks to a halt. It didn't make as much difference as hoped, and rollbacks continued to be a problem until the mid-1980s, when a law with more teeth went into effect.

Up to the mid-1970s, the Federal Trade Commission had not been particularly active in the used-car trade, participating in only a handful of legal cases. Prior to 1960, they'd dealt with only one (in 1924). In 1960, the FTC participated in five cases about credit and guarantees. In the late 1960s, the agency obtained consent agreements from four dealers regarding the use of bait-and-switch ads and the like.

Then, in 1975, the FTC issued a Staff Report on the Used Motor Vehicle Industry. Presenting a rundown on problems and practices, the report revealed that the used-car trade continued to be riddled with abuses. Furthermore, it was not strictly or uniformly regulated, except by local ordinances in certain areas.

In terms of appearance reconditioning, for instance, investigators discovered a "startling" contrast between cars that had such work done and those that did not. Automakers participated by providing their dealers with aids for appearance conditioning. Covering up known defects in a used vehicle was a significant issue. Joy Browne, author of The Used Car Game: A Sociology of the Bargain, asserted that dealerships in low-income, largely Black urban areas (referred to as "ghetto dealers" at that time) were the worst offenders for keeping silent about known flaws. Browne also declared that private sellers were typically the most accurate in their descriptions of a vehicle for sale. (Not everyone necessarily agreed.)

FTC Recommendations included:
• Dealers should undertake a 26-part inspection and provide a disclosure statement.
• Defective safety-related parts should be repaired or replaced.
• Dealers should provide a 30-day/1000-mile mandatory warranty on safety-related parts.
• Prior owners of a car should be disclosed, along with its price.

Despite its series of recommendations, which were clearly needed, the agency had no legal power to compel auto dealers to comply.

The 1973-74 gas crisis, which occurred almost concurrently with the 1973-75 recession economy, produced radical changes in the market for big gas guzzlers. Impacting both new and used vehicles, it would persist into the early Eighties. Later in the 1970s, American automakers initiated a flurry of downsized models, which persisted into the Eighties.

Meanwhile, growing interest in new compact and subcompact cars also led to high prices for those models on the used-car market. Many used cars were now purchased as second (even third) cars for the suburban family. At decade's end, used cars remained strong, with some 18.5 million sold, compared to just 10.3 million new models.

Into the Eighties ...

Used-car sales continue to grow in early 1980s and beyond

The early 1980s period is well known as a period of severe, persistent inflation. In 1967, the Consumer Price Index was set at 100 (the baseline used by the federal government for its CPI comparisons), rising to 133 in 1973. By 1983, the CPI hit a whopping 297.4, meaning that the average cost of commodities had more than doubled in a decade. (Used cars had been included in the CPI since 1953.)

Eighties inflation had quite an impact on the used-car market. Prices of what would eventually be termed "pre-owned" cars were rising sharply, horrifying some shoppers who bought used cars regularly. The average used-car price rose from $3,602 in 1979 to $4,218 in 1981, then to $4,902 in 1983. That average reached $5,406 in 1984.

Used cars generally outsold new ones by a traditional 3-to-2 ratio. In 1982, however, a Hertz study calculated that the used/new ratio had been 2-to-1 (twice as many used cars sold as new ones), if not more.

As usual, published figures for used-car sales were based on results from franchised new-car dealers, and did not include sales from independent used-car dealers, or conducted between private parties. Private sales still constituted a hefty portion of the used-car market. In 1983, according to one study, 46.3 percent of used cars were sold by new-car dealerships and 14 percent by independent (used-car-only) dealers. Almost 40 percent were private sales, with no dealer involved.

Another source estimated private sales in 1984 at an eye-opening 51.3 percent. In that year, 28 percent of used-car buyers had never signed on the dotted line for a new one (down from 35 percent in 1983). Overall, 17.3 million used cars were sold in 1983, dipping to 16.8 million in '84.

By the 1980s, even government agencies were buying used vehicles. Ownership of a new car did not seem to be as much of a status symbol as it used to be, which worried industry economists.

In 1982, three-fourths of heads of American households said a used car (not purchased new) was their primary vehicle. Average family income at that time was $30,087 for used-car buyers, versus $39,860 for new-car purchasers. In 1983, that average income reached $33,051 for used-car buyers, and $47,567 for those driving home a new model.

Compared to previous decades, cars were getting older in the 1980s. In 1979, according to one source, the average used car was only 2.9 years old, with 29,000 miles on its odometer, and priced above $3,600. Two years later, average age rose to 3.7 years, reaching 4.8 years in 1983 before dipping to 4.5 years in '84. At that point, the average new car was possessed by its initial owner for 5.1 years (up from only 3.6 years in 1979).

"We're selling life expectancy," declared the former president of the National Independent Automobile Dealers Association in 1981.

Under a 1984 New York law, a used-car dealer was obligated to provide a 60-day warranty on a car with 36,000 miles or less on its odometer, and a 30-day warranty if over 36,000 miles. No warranty was required for cars priced under $1,500. Elsewhere in the country, warranties were still far from commonplace.

The Truth in Mileage Act wouldn't be passed until 1986. Meanwhile, rolling back odometers was still going strong. So was title "laundering," taking advantage of the fact that state laws regarding automobile titles varied considerably. Laundering of titles let nefarious operators sell cars that were stolen or were burdened with dubious credentials and ownership history.

"Detailing" also took place frequently. Not just the kind of random touch-up work that might give a dull-looking, unclean but properly-documented vehicle a fresh sheen, but procedures intended to cover up body flaws as quickly and cheaply as possible. Whether on the legitimate market or the illicit corner, detailing experts had plenty of new products and techniques that could be applied to conceal unwanted blemishes as well as more flagrant visual defects.

Stickers revealing known defects on a used car were not yet required. Because so many vehicles on car lots were marked "as is," such stickers weren't really relevant anyway.

According to CBS News in 1985, about 89,000 used-car lots were operating throughout the country. To make those cars available, 130 auction companies handled 3 million used cars yearly.

Cars for Poor and Low-Income Families

Even when inflation began to ease as the mid-1980s approached, income disparity between white-collar workers, factory toilers, and impoverished families was widening. The minimum wage had not increased since 1981, when it was raised to $3.35 per hour, and it would remain at that figure until 1990. Plenty of Americans were working for low wages, yet many of them needed a car to get to their jobs. Despite the relaxing of inflation, automobile prices remained high.

Regardless, plenty of poor folks managed to own vehicles, and clunkers still made up a sizable portion of the motoring picture. All the years of junking drives and other attempts to eradicate jalopies hadn't made much of a dent in the fleet of deteriorated vehicles. Safety remained a concern at the lower end of the used-car market; but for the most part, the number of cars in rough shape dwindled only in those cities or states with rigorous safety inspections.

Automobiles were changing substantially, starting with the downsizing that began in the latter years of the Seventies decade. At the same time, tightened regulations about emissions and fuel economy impaired performance and, to an extent, operating ease.

Cars manufactured in the early/mid 1970s remained popular into the '80s, due in part to their larger dimensions, less-constricted engines, and comparative mechanical/electronic simplicity. Resurgence of interest in style and performance during the early Eighties affected both the new- and used-car market. Sporty models gained attention from prospective vehicle buyers to a degree that surprised – indeed, shocked – some observers and analysts. Even though cars had grown smaller and more fuel-efficient, style, luxury and comfort might still be the more psychological, emotional factors that sealed the deal to the modern, reasonably well-off, customer.

Clunkerites weren't so enthralled by the smaller 1980s models, partly because of their increased complexity. Repairs were thought to be (and generally were) more expensive. Furthermore, they might have been highly efficient when new, but not so much when they began to age and weaken.

Research Note: Most research for Clunkers & Creampuffs was done in 1983, by the author and his wife, at libraries and other information sources in Detroit and its surrounding area. That research was intended to result in a book on used car history, with the same title; but that book was never published.

Click here for Overview: Casual History of the Used Car

Click here for Chapter 1: Early Days - Rich Men's Playthings, Poor Men's Dreams

Click here for Chapter 2: Ford's Model T and the Masses

Click here for Chapter 3: Production and Prosperity

Click here for Chapter 4: "Easy" Payments

Click here for Chapter 5: Family Cars and Family Life

Click here for Chapter 6: Five-Dollar Flivvers

Click here for Chapter 7: Rise and Fall of the Used Car

Click here for Chapter 8: Saturation and Salesmanship

Click here for Chapter 9: A Global Blowout

Click here for Chapter 10: Selling in Hard Times

Click here for Chapter 11: Wheels for the Workingman

Click here for Chapter 11: Okies, Nomads, and Jalopies

Click here for Chapter 13: Motoring in Wartime

Click here for Chapter 14: The Postwar Boom

Click here for Chapter 15: Chromium Fantasies

Click here for Chapter 16: Dealers Face Image Problem

Click here for Chapter 17: Wheels for the Fifties Workingman

Click here for Chapter 18: Teens, Rods, and Clunkers

Click here for Chapter 20: Personal History of Clunker Ownership

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