Dear Tom and Ray:

I think your column is great. My only complaint is that it's usually too short! Here's my question. Lately, TV, radio and newspaper dealer ads have been pushing something called "program cars." I assume that "program" is a euphemism for "used," but what exactly does it mean? Over the years, I've grown accustomed to "executive," "demo," "fleet," "previously owned," and even "pre-titled," but "program" defies deciphering. Can you define "program car?" Walter

Tom: Sure. A "program car" is a car that has previously appeared on a television program. You know, like Jim Rockford's Firebird.

Ray: Actually, "program cars" are mostly former daily rental cars. The name comes from the term "repurchase program."

Tom: Manufacturers sell lots of cars--at substantial discounts--to companies like Hertz, Avis, and National. In the past, the rental companies would use the cars for six months or so, and then sell them on the used car market.

Ray: But in the early 1990s, when the economy was slow, car dealers started protesting that the sales of these "practically new" cars were competing with their own used car operations, and, in some cases, even their new car sales.

Tom: So the rules were changed a few years ago. And now, the manufacturers buy back almost all of the cars from the rental car companies. Then they auction the cars off to their own dealers, who make the profit selling them as "program" cars. They're also sometimes called "repurchased rental cars."

Ray: And they're a pretty good deal. They're usually about six months old, have 12,000-15,000 miles on them, and because they were serviced by the rental companies, they're often in pretty good shape.

Everybody wants a new car. But from a purely financial point of view, there is no question that buying a used car is always cheaper, even in the long run. To learn more, order Tom and Ray's pamphlet How to Buy a Used Car: Things That Detroit and Tokyo Don't Want You to Know. To order, send (check or money order) to Ruin, P.O. Box 536475, Orlando, FL 32853-6475. You can also order online.

© 1995 by Tom and Ray Magliozzi and Doug Berman Distributed by King Features Syndicate, Inc.

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