You might want to buy a used car while they’re cheap – but not just because they’re cheap.
And cheap they are.
Because of unprecedented desperation tactics to sell new cars – including under-bid incentives, cash back offers and “free money” loans at zero or nearly zero interest. Which the car companies have had to resort to during the past year in order to fluff up wilting sales (and sales are wilting regardless).
When you make new cars so attractive – so cheap – to buy, what happens is that used cars become even cheaper to buy.
It is hard to sell, as a for-instance, a $17,000 three-year-old Camry when you can buy a brand new one for around $22k out the door – especially when the payments on the new car are lower because the interest on the loan is less and because the payment on the new car can be stretched out over six or seven years, while the loan on a used car is shorter in duration – because of the lesser value and faster depreciation of the used car.
So. . .
But it’s not just it’s a great time to buy a used car as far as the deal you’ll get.
It’s a smart move because of the hassle you’ll avoid.
Maybe not right away, but down the road – probably just after the warranty coverage expires.
What’s happened is we’ve crossed a kind of engineering Rubicon. It has happened over the past two or three years – and there is probably no turning back. Not unless regulatory reasonableness returns – and that doesn’t look likely. If anything, it is likely to become less and less reasonable.
The car companies have had to resort to design and engineering measures just as desperate and extreme as the financial measures they are resorting to in order to fluff up sales. But in the case of the design and engineering measures, it is to placate federal regulatory ayatollahs, who continue to demand – among other things – that new vehicles achieve ever-higher fuel economy – and lower “greenhouse emissions” – irrespective of the cost involved.
It is why, next year, BMW will append a four cylinder/hybrid drivetrain to all 5 Series sedans – and eliminate the six cylinder/non-hybrid versions.
It is why every new-design car has a direct injected (DXI, or GDI) engine rather than a port fuel injected engine. Automatic Stop/Start systems are pretty much standard equipment – which you can’t cross off the options list.
The latest automatic transmissions have eight – or even ten – speeds. Turbochargers – sometimes two of them – are the new In Thing.
Bodies are being made out of aluminum rather than steel.
And of course, there is “autonomous” driving technology – cars that semi-steer and park themselves, accelerate and brake on their own.
None of these things materially improves the performance – or even the economy – of the vehicle in a way that’s meaningful to the owner.
A car with DI and and eight-speed transmission might give you a 3-4 MPG uptick – on paper – vs. the same basic vehicle without these technologies.
That’s not nothing, of course.
But ir doesn’t cost nothing, either.
Not much is said about the fact that the car costs more to buy because it has these technologies. You “save on gas” – by spending more on the car. The same logic used to peddle hybrids.
It’s interesting that this other side of the equation is almost never discussed. And that the ayatollahs who smite us with their regulatory fatwas – so seemingly concerned about how much we’re spending on gas – never seem much concerned about how much we’re spending to cover the cost of their fatwas.
Up front – and down the road.