restricted access 4. Used Cars: Undermining the New Marketplace
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c h a p t e r f o u r Used Cars Undermining the New Marketplace People referred to early automobiles as horseless carriages because that is what they resembled physically, but culturally and economically they functioned more like horses than carriages. The ongoing rhetorical trope that compares used-car dealers to horse traders, which is employed by everybody from Nobel laureates to folklorists, expresses a cultural memory based on a historical reality : for the first forty years of the twentieth century, used cars functioned as horseless horses in the male community.1 The sale of used cars to and by newcar dealers prevented the full integration of new cars into the standard singleprice marketplace. The flexible pricing that used-car trade-ins in effect imposed on new-car sales emerged in tandem with the commercial production of automobiles and continued unabated into the age of the Internet. All attempts to make posted prices the real prices that cars sold for foundered on the horsetrading culture that characterized used-car sales. A 1910 cartoonist showed two farmers on the main street of a small northern town swapping cars the same way they would have traded horses a couple of years earlier. One is offering to trade his car and to throw in a hardly used plow to boot. Meanwhile, the usual gaggle of men and boys assembles to enjoy the show.2 It is obvious that neither of the men in the cartoon is a car dealer and that neither car is new. By removing the scene from the retail environment, the cartoonist was able to emphasize the horse/car parallel, still unexpected enough in 1910 to be considered funny. The humor in equating cars with horses persisted until the World War II era because there continued to be a population of men who were familiar with horses and horse-trading culture. (See fig. 2.) In 1939 a Kansas City Ford dealer ran a large advertisement with a picture of a horse and the bold headline, “Big ‘Hoss’ Swappin’!” The text urged readers to “bring in your old ‘nag’ and swap for one of these registered thoroughbreds .”3 By putting “nag” in quotes, the dealer was signaling that the whole offer was a marketing metaphor. Until just about the date of that ad, however, horse-trading language had not been merely metaphorical. As soon as they were widely available, cars became another commodity to be exchanged in the informal world of rural men’s swapping, while horses became barter that could be traded for cars and tractors.4 In rural areas, horse trade-ins were so common until World War II that farm equipment dealers often became both swap centers and sales barns for the animals they took in trade.5 The expectation that dealers would accept horses as partial payment for motor vehicles, and the willingness of dealers to accede to that demand, established a basis in reality for calling car price negotiations “horse trading,” making it more than a linguistic anachronism like “dialing” a push-button telephone. If we think of used-car sellers using horse-trader categories, there was (and continues to be) a reasonable parallel among three groups. First, new-car dealers who resell used cars they took in trade were similar to the barn traders who, as established businesses, were under a certain amount of social pressure to conduct themselves in an ethical manner. Second, independent used-car dealers unaffiliated with a factory franchise were analogous to the road traders of the horse world. Their inventory was of poorer quality, and their business standards were more flexible than those of larger dealers. Finally, there were the private person-to-person sellers of used cars. From a broad retail perspective, new-car dealers were the most unusual category of used-car sellers because they incorporated elements of bargaining into the sale of new manufactured goods. They did this both by reluctantly bargaining over the price of new cars and by more enthusiastically haggling over the price of the trade-in. Before World War II, when most dealers and buyers at least paid lip service to the advertised list price, new-car discounts were often given in the form of “over-allowances,” in which the dealer paid more for the used car than he could sell it for. 64 Horse Trading in the Age of Cars A dealer who gave an over-allowance might not have to sell it for less than he paid because...