Indeed.
http://www.jdbfacts.com/facts.html
The used car salesman doth protest too much, methinks.
They stay in business by buying cars cheap at auction, fixing minor issues, and selling on a high margin. Haggling is a breeze with these guys, getting a car for 40% less than sticker is easy.
So, Ralph124c, are you going to fill us in on where exactly this micro-effect you’ve observed has occured, and how you’ve managed to avoid straying outside the boundaries of its influence?
Hey, I was gonna use that line!
Lots here (Columbus) as well, although I do see more of the larger ones (30 cars on up).
My take is that these used car lots were pretty marginal businesses-and in MA, you are legally bound to disclose a car’s defects. That put the shady ones out of business.
Ah, that takes me back; when a struggling young pup in L.A. in 1949, I didn’t even have a car, just a motor bike. I needed a second job to try to save some money, so got one at Sleazeball Joe’s as an assistant to his mechanic. As the junkers he bought at auction needed all sorts of attention just to be able to drive them off the lot, we were busy.
He owned three lots, so constantly rotated cars from lot to lot to make them, oh, I don’t know, look “fresh” I guess. Part of my job was to ferry cars among the lots, which was great as could drive all around the city. Lots of fun. Took the streetcar from one lot to the next to pick up another junker.
Once a guy came and wanted a car that desperately needed a ring job, and said if it was done by 5 PM, he’d buy it. The mechanic and I tore the engine apart as fast as we could, trying to make the deadline. Just as we put a new head gasket on, bolted the head down, the guy came in to get it. We both gave a big sigh of relief. I went to pick up a big greasy rag by the car, and when I did, there were all the pushrods laying under it.
Ol’ Joe wasn’t too happy. 
Perhaps we’re being a little rough on the OP. Those tiny little one-person ten-car lots still exist, but they’re mostly located in the older, poorer parts of town around here where there’s an ample market of people who desperately need a cheap car. Out in the suburbs, the large, dealer-affiliated pre-owned car centers tend to dominate.
I suspect zoning plays a part, as much as demongraphics.
I don’t see any shortage of used car lots in Louisiana.
I don’t see the scam-artist type lots that have junk-on-wheels that they’re trying to pass off as a drivable vehicle. I think the advent of CarFax has eliminated that sort of thing.
BTW, CarFax has a warning on any VIN that was registered in southern Louisiana or Mississippi during August of 2005, so a shady dealer would have trouble selling a resurrected Katrina flood car (not to mention it would be pretty hard to cover up that kind of flood damage with all the chemicals and sewage that was in the flood water).
Heck, I bought a lemon only a couple of years ago in your neck of the woods from just such a dealer. Don’t ask me what I was thinking. Anyway, he was on Washington St. in West Newton, only a couple of blocks from the police station.
That makes sense to me. MA isn’t such a big state that this type of dealer couldn’t just move to another state and still market to MA residents. We have no shortage of said dealers here in NC, from service stations with a few beauties for sale to folks who run mini-businesses out of parking lots on weekends only.
There is no demise. They’re in central PA, in suburban Philly, and other areas, as observed.
I think it’s more of an issue with cheap land on that road, all zoned commercial.
The sales tax in MA (the likely buyers if your case was true) is paid at the time of Registration/Titleing, not at the time of the sale (though many dealers will do the DMV work for you in MA), so even if you buy out of state, you have to pay Gov Duval his 5%. In fact, even if you buy it in NH, and register it in NH, if it’s been less than 1 year (I think 1 year, could be 2), and you bring it into MA to register it, you are STILL responsible for the sales tax at the time of the first registration in MA.
This obviously doesn’t apply to other goods, which is why nearly every highway has a major mall right at the border into NH, and every side road has a beer/cigarette store at the line into NH. We’re happy to take the Masshole’s money! 
As to the OP, they are everywhere in New England, with the smaller ones being the most grungy. Plenty of used car mega lots as well, and of course those sections of every dealer with the used cars.
Drive one mile on Rand Road north from Hicks Road and you will pass probably ten of them.
I heard the same warnings: GM bought back (and destroyed) its dealer’s stocks of cars 9that were submerged). I hear that flooded cars a re a time bomb-they continue to rust under the carpets, and eventually these cars will suffer structural failure.
I especially likeJR’s Used Car Corral. If you click on Google Street View on that link, you can see the Elvis manniken and a slot machine on the curb. He also has a white stretch Caddie limo with longhorn steer horn hood ornament.
I think the problems are more to do with mechanical and electronic systems. The body structure is full of drain holes and covered 100% with clearcoat, paint, and ecoat. Rust can’t start. You did indicate you were talking new cars, right? Even for older cars, as long as there’s no pre-existing rust, the structure ought to stay solid.
I was referring more to the used cars that were flooded that someone might try stripping the interior and hosing it out and then putting in a new interior. The sludge that accompanied the floodwater turned into this goo that couldn’t easily be removed. I bought (ok, stole, but it was heading to the crusher when I spotted it) a flood car to pull a few parts off of and there wasn’t much salvageable after it sat for a few months.
There was a dozen new car dealers on I-10 in New Orleans East near Lake Pontchartrain that took on 6 feet of water. All of the new inventory sat there for a few months…when the flood came, the windows broke due to the pressure differential and so they sat and marinated for as long as the water was in…when the water receded, there was a lot of mud. Eventually, car carriers came in and hauled them all away, presumably back to the manufacturer to be destroyed.