If someone you don't know tries to sell you a used car for $6,000, you don't just smile, say "thank you" and hand over six thousand bucks. You're skeptical. You want to kick the tires, you want to bargain, you might want to have your own mechanic check the car out.

But when it comes to shelling out $600 million to buy a used car company, investors seem to be suspending all skepticism. Welcome to the wonderful world of Urcarco Inc., the latest example of how Wall Street can go bonkers when it sells itself on a "concept stock."

Urcarco, for those of you who aren't trendy, is one of the market's hottest stocks. Urcarco shares, which sold over-the-counter yesterday for $20.37 1/2, have almost tripled since November, when the company sold shares for $7.34 (adjusted for a stock split) in its initial public offering. Counting the 5.75 million shares Urcarco sold last week to raise new cash, the company now has 31.4 million shares outstanding. So a $20 stock price means the market is valuing Urcarco at more than $600 million -- 31.4 million times $20. Not exactly chump change.

What makes Urcarco worth all this money? Certainly not anything visible on the financial statements. The company, based in Fort Worth, operates 17 used car lots in Fort Worth, Houston and Austin, and owned $84 million of its customers' promissory notes as of March 30. Except for Urcarco's delightful stock symbol -- CARS -- there are no hidden assets in this company. No car lots sitting on valuable downtown real estate or atop oil fields or diamond mines. No secret stash of antique used cars.

What you are really paying for here is a concept. To wit, the concept that Urcarco is bringing professional management to the used car business. Or, as the company's supporters say, "to the $40 billion used car business." The idea is that Urcarco will be to used cars what Toys 'R' Us is to toys -- a company that will become the dominant factor in a fragmented business.

Good luck.

All it takes is a cursory look at Urcarco's cash flow numbers to see that the company has a major problem: The more cars it sells, the more cash it loses. This, despite the fact that the more cars it sells, the more money it reports as profit.

Reported profits have risen from $248,000 in the year ended June 30, 1988, to $2.9 million in 1989 to $10.1 million in the nine months ended March 30. At the same time, by my calculations, the company's basic business ran a cash deficit of $4.2 million in 1988, $19 million in 1989 and $48.7 million in the nine months ended March 30.

Urcarco closes its cash gap by borrowing money or selling new shares. In fact, the company is up front about saying that it constantly needs infusions of cash. In documents it issued in May as part of last week's stock sale, Urcarco said its cash shortfall runs from $6 million to $8 million a month. But after I asked the company some detailed questions, such as why debt had risen by $10.2 million in April, the company conceded that $6 million to $10 million a month is now the range.

In other words, last week's stock sale, which produced more than $100 million after investment banker fees and other expenses, will probably carry the company for something less than a year. Without that sale, Urcarco would have been bumping up against its $45 million bank borrowing limit before summer was over.

The disparity between the glowing reported earnings and the insatiable need for cash has attracted short sellers, one of Wall Street's feared predator species. These creatures, who make money if a stock's price falls, borrow shares of the target company and sell them, hoping to ultimately replace the borrowed shares with stock purchased at a cheaper price.

As you might suspect, I looked into Urcarco at the suggestion of short sellers. However, this article is based on my own research and analysis, plus information provided by the company, which answered my questions but didn't want to talk while its stock offering was pending.

To be blunt about it, there is less to Urcarco than meets the eye. This company isn't about selling used cars -- it's about trying to collect money from people who are going to have trouble paying it.

It's obvious that Urcarco, which runs what it calls "we finance" lots, is charging customers more than they would pay elsewhere for the same car -- but elsewhere, the customers wouldn't be able to buy the same car because they lack the down payment and credit standing to buy it.

Urcarco accepts down payments of 5 percent to 15 percent, much less than most other used car dealers demand. Urcarco lends the customer the balance of the purchase price, will finance the insurance and sometimes will even give the customer a 30-day loan for the sales tax. In return for this generosity, Urcarco charges not only high prices, but also the maximum interest rate allowed by the state of Texas, from 18 percent to 24 percent a year.

Forget any question of the morality of selling costly merchandise to marginal buyers -- at least for now. The problem with Urcarco, from an investor's point of view, is that you can't figure out if the company is ahead or behind.

Most used car dealers make sure the down payment covers most or all of their costs, so whatever the dealer collects on buyers' promissory notes is profit. Urcarco pays cash for the cars it buys at wholesale and for its other expenses, but it collects almost no cash when it sells cars. Urcarco's real profit, if any, comes not when it moves the car off the lot, but when it collects on the customer's note. If it collects.

The company argues that it's being financially conservative by assuming that the paper it gets from customers is worth only 82 cents on the dollar. The company implies that this works out to a repossession rate of about 38 percent of the cars it sells. Is that enough? Who knows?

The company says it doesn't know how the value of the cars on which it holds customers' notes compares to the value of the paper.

Urcarco may, in fact, someday become the Toys 'R' Us of used cardom. But until (and unless) that happy day dawns, the cash deficit makes the company vulnerable. If a stock offering can't be completed, if a lender gets nervous or if anything else untoward happens, Urcarco can be in big trouble in almost no time at all. If you want to buy this stock -- or any "concept" stock -- for more than a short-term trade, you had better go out and kick some tires.

Jerry Knight, whose column normally appears here on Tuesdays, is on assignment. Allan Sloan is a columnist for Newsday in New York.