The Truth About Cars » Used Cars http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Sat, 04 Jul 2015 15:51:01 +0000 en-US hourly 1 http://wordpress.org/?v=4.2.2 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars editors@ttac.com editors@ttac.com (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars » Used Cars http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com Used Tesla Values Could Be a Bubble Waiting to Burst http://www.thetruthaboutcars.com/2015/07/used-tesla-values-could-be-a-bubble-waiting-to-burst/ http://www.thetruthaboutcars.com/2015/07/used-tesla-values-could-be-a-bubble-waiting-to-burst/#comments Wed, 01 Jul 2015 17:00:57 +0000 http://www.thetruthaboutcars.com/?p=1104801 The National Automobile Dealers Association new electric vehicle retention list released last week has a tasty little tidbit in its roundup of value retention rates. Tesla’s Model S, which topped the 3-year value retention rate list for EVs in the new list, also sported a better value rate for most cars on a similar list released last year for all […]

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Tesla Model S Center Stage

The National Automobile Dealers Association new electric vehicle retention list released last week has a tasty little tidbit in its roundup of value retention rates.

Tesla’s Model S, which topped the 3-year value retention rate list for EVs in the new list, also sported a better value rate for most cars on a similar list released last year for all segments, including mid-size luxury cars. That includes BMW.

But the news may not be all good, all the time.

According to the most recent NADA study, Tesla’s Model S retains 57.2 percent of its original value after three years based on dealer trade-in values. That figure is tops among mid-size luxury sedans, including BMW’s 5-series, in a study conducted last year.

Also noted in the 2015 study, there is a significant cliff after three years when most EV manufacturers’ powertrain warranties expire, meaning there’s good chance that the Model S’s value plummets after that.

The 2014 study by NADA (which examined all segments – including EVs) was comprised of only the Chevrolet Volt and Nissan Leaf — the only two cars that had been on the market for three years by the time the study was conducted. The Volt and Leaf retained 41.6 percent and 38.2 percent of their values respectively, due partly to price drops from their manufacturers and increasing competition in the segment. The 2015 study had worse news for Volts and Leafs on trade-in: those values dropped to 31.3 and 25.3 percent respectively.

As Tesla prepares to release their Model X, there’s no doubt quite a few Model S owners will be looking to replace their sedans. This could trigger a market saturated with Model S’s (or is it “Models S”?) at or nearing the end of their warranty lives — and it’ll likely have legitimate competition in the near future as well, further driving down retained values.

Tesla Model X Teaser

It’s no secret that Tesla has no significant cash flow, hasn’t turned a profit for more than one fiscal quarter in five years, and probably won’t have a cash-positive year until 2020.

That all could mean the bottom falling out for Tesla Model S values soon. Or not.

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TTAC At The Movies: “Slasher” http://www.thetruthaboutcars.com/2015/05/ttac-movies-slasher-2/ http://www.thetruthaboutcars.com/2015/05/ttac-movies-slasher-2/#comments Tue, 12 May 2015 14:00:17 +0000 http://www.thetruthaboutcars.com/?p=936714 Movie director John Landis is probably best known for his 1978 comedy classic Animal House. I am such a fan of it that I recently made a pilgrimage to the Dexter Lake Club, the Oregon roadhouse used in the film where the frat boys partied during their road trip in a black suicide-door 1964 Lincoln Continental. (“Do […]

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Slasher Courtesy docurama.com

Movie director John Landis is probably best known for his 1978 comedy classic Animal House. I am such a fan of it that I recently made a pilgrimage to the Dexter Lake Club, the Oregon roadhouse used in the film where the frat boys partied during their road trip in a black suicide-door 1964 Lincoln Continental. (“Do you mind if we dance wif yo dates?”)

To folks in the retail automobile business Landis is better known for his lesser-known 2004 Independent Film Channel documentary Slasher, a movie that represents the most authentic cinematic depiction ever about selling cars. In the world of fictional flicks about the car business, there have been few hits but several great individual scenes. The 1980 movie Used Cars immortalized the line,”50 bucks never killed anybody!” Who can forget Robert De Niro tossing a couple out of the Audi showroom in the 2002 film, Analyze That? Even though it was about swamp land salesmen, the 1992 picture Glengarry Glen Ross could have been about car salespeople and their sales managers; its highlight: Alec Baldwin’s dead-on sales meeting speech (NSFW).

Slasher betters all these as it is 100% non-scripted reality. I was reminded of the doc after reading Bark M.’s piece about the dealership who would run customers’ credit and then hand them a color-coded balloon so salespeople would know their level of creditworthiness. You will see a real-life variation of that tactic in this brilliant and often hilarious documentary.

The film follows Michael Bennett, a traveling used car sales specialist who sells his “slasher sale” services to desperate dealers for $4,000 per day. Bennett is a mixture of Cal Worthington, Cooter Brown, and Professor Harold Hill. Rarely without a beer or cigarette in his hand, he may be the most hyper on-screen presence in history.

We tag along with Bennett to a Toyota store on the wrong side of Memphis in need of moving fifty aged used cars in one weekend. Bennett’s shtick embraces every stereotype of car dealer sales events: double the number of balloons on the lot, hire sexy girls (“Slashettes”) as greeters, give away prizes, bury the airwaves with what the dealer’s sales manager called “the single most obnoxious radio commercial,” and – most importantly – offer autos for as low as $88. That is the total price, not a payment, on two chosen turds.

Dressed in a cheap tuxedo, the wiry Bennett bounces from car to car slashing prices previously marked up 100% or so, easy to do with 5 to 10-year-old used cars. One lucky couple chose a green 1995 Hyundai Accent marked at $888 and Bennett cut it to the magic $88. The car spewed blue smoke as the happy customers sputtered off the lot.

Many moments of this picture are painfully accurate. The look on the salespeople’s faces as Bennett held the kickoff sales meeting said, “Why was our owner such a sucker to hire this guy?” The film puts a clock on one couple as they go through the promised “fast, no negotiation” process and we learn it took 2 hours and 12 minutes to close their deal.

Slasher 2 Courtesy docurama.com

On the second day of the sale, the $88 cars are gone and the floor traffic literally stopped. Bennett and the “Slashettes” head out into the street to flag down motorists. I do not know if Landis planned this but the movie nearly slows to a halt at this point, which is exactly the feeling you get as a car salesperson when nobody is coming through the door.

Bennett’s energy is what drives this movie. We follow him at night as he crawls through the pubs and strip clubs of Memphis. The picture becomes a character study of this flawed man, an individual with too many years in the car business but with nowhere else to go.

Landis has always had a fine touch with the music he chooses for his movies. In Slasher, the soundtrack is entirely from artists of Stax, the legendary Memphis recording studio. When Otis Redding sang “Shake” as Bennett closed deals or wailed “Fa-Fa-Fa-Fa-Fa (Sad Song)” as it became apparent the sale was a flop, the songs fit the scenes perfectly.

The documentary was filmed in 2004 and one would think  these type of sales events would be in the past as manufacturers crack down on dealers with low customer satisfaction scores and ones hurting their hollowed “brand.” A quick search of youtube will show you otherwise.

Slasher is available through amazon.com or just watch this eight-minute “Making Of” feature and you will get the drift.

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Buick Regal Tops Among Those Traded-In After One Year Of Ownership http://www.thetruthaboutcars.com/2015/05/buick-regal-tops-among-traded-one-year-ownership/ http://www.thetruthaboutcars.com/2015/05/buick-regal-tops-among-traded-one-year-ownership/#comments Wed, 06 May 2015 19:00:08 +0000 http://www.thetruthaboutcars.com/?p=1062954 In a hurry to trade your new Buick Regal for something else? You’re not alone, as the sedan joins a handful of models traded-in after a year of ownership. Per a report by iSeeCars.com, 2.7 percent of vehicles bought new end up on the used lot after being on the road for one year, Forbes […]

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2014 Buick Regal GS AWD Exterior-003

In a hurry to trade your new Buick Regal for something else? You’re not alone, as the sedan joins a handful of models traded-in after a year of ownership.

Per a report by iSeeCars.com, 2.7 percent of vehicles bought new end up on the used lot after being on the road for one year, Forbes reports, with trade-in rates as high as 11 percent for a specific model.

The models brought back to the sales lot run the gamut, from $18,000 subcompacts to $45,000 luxury sedans. The Regal tops the list with 10.7 percent of owners exchanging their keys after a year, the Chevrolet Sonic takes second with 8.9 percent, and the BMW X1 at a close third with 7.8 percent. The Dodge Charger, Mercedes-Benz C-Class sedan, Chevrolet Cruze and Nissan Frontier also make the list.

As for why the sudden change of heart, quality or the perception of quality played a key role; the aforementioned models were rated poorly by owners surveyed in J.D. Power’s 2014 U.S. Initial Quality Survey. ISeeCars.com CEO Phong Ly says those issues usually involve technology, such as connected-vehicle systems, voice command, and Bluetooth connection, and aren’t so much “problems” as they are difficulties with said technologies.

Those looking for a deal on those models will likely be happy with what they find on the used lot, though. The 2014 Regal with average mileage comes with a price tag 32.2 percent less than new, while the C-Class and Charger lost 31.0 percent and 28.4 percent in new-car value after a year, respectively.

[Photo credit: Alex L. Dykes/The Truth About Cars]

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Question Of The Day: Should I Blow My Tax Refund On This http://www.thetruthaboutcars.com/2015/03/question-day-blow-tax-refund/ http://www.thetruthaboutcars.com/2015/03/question-day-blow-tax-refund/#comments Tue, 24 Mar 2015 13:30:15 +0000 http://www.thetruthaboutcars.com/?p=1027945 So, let me be clear: I have a very good, brand new car. I have no real need for a second car, no place to park a second car and no desire to take on a project. But god damn it, I want this. The car in question is a 2003 BMW 325xi Touring. It […]

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So, let me be clear: I have a very good, brand new car. I have no real need for a second car, no place to park a second car and no desire to take on a project. But god damn it, I want this.

The car in question is a 2003 BMW 325xi Touring. It has a clean CarProof (Canadian version of a CarFax) and it’s a manual. On the other hand, it has 328,000 km (203,000 miles), and since it’s an auction, you don’t exactly have time to contemplate whether this is a good idea or not.

But, I’ve always wanted a BMW manual wagon, and I have a decent tax return on the way. What do you say, B&B?

 

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NHTSA To Congress: Pull Recalled Used, Rental Vehicles Off The Road http://www.thetruthaboutcars.com/2015/02/nhtsa-congress-pull-recalled-used-rental-vehicles-off-road/ http://www.thetruthaboutcars.com/2015/02/nhtsa-congress-pull-recalled-used-rental-vehicles-off-road/#comments Mon, 23 Feb 2015 13:00:53 +0000 http://www.thetruthaboutcars.com/?p=1006322 The next vehicle the TTAC Zaibatsu or the B&B rent could be safer if Congress heeds the call of the National Highway Traffic Safety Administration. AutoGuide reports the NHTSA is calling upon Congress to pass legislation that would bar rental companies and used-car dealerships from renting or selling any vehicle under recall without first being […]

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Rental Car Corridor - SeaTac International Airport

The next vehicle the TTAC Zaibatsu or the B&B rent could be safer if Congress heeds the call of the National Highway Traffic Safety Administration.

AutoGuide reports the NHTSA is calling upon Congress to pass legislation that would bar rental companies and used-car dealerships from renting or selling any vehicle under recall without first being repaired; current legislation only asks of such things for new vehicles prior to sale.

Transportation Secretary Anthony Foxx said that “requiring rental car agencies and used car dealers to fix defective vehicles before renting is a common-sense solution” that would improve road safety. Foxx adds that Congress should follow the lead of both safety advocates and the rental-car industry in taking a stand on the issue.

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A Sordid History Of Unicorns http://www.thetruthaboutcars.com/2015/01/sordid-history-unicorns/ http://www.thetruthaboutcars.com/2015/01/sordid-history-unicorns/#comments Fri, 16 Jan 2015 19:01:37 +0000 http://www.thetruthaboutcars.com/?p=984633 Please welcome Fil Cvetkovic to TTAC. Fil owns a manufacturing firm involved in automotive, aircraft and other industries – and has a long history with owning, repairing and giving up on obscure project cars. Fil will be reporting on used vehicle auctions, and likely picking up new projects for the ame time. Being the new […]

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Please welcome Fil Cvetkovic to TTAC. Fil owns a manufacturing firm involved in automotive, aircraft and other industries – and has a long history with owning, repairing and giving up on obscure project cars. Fil will be reporting on used vehicle auctions, and likely picking up new projects for the ame time.

Being the new kid on the block at TTAC, I figured an appropriate place to start would be introducing myself. My name is Filip Cvetkovic, but many know me as Fil or… “Phil with an F.” More importantly, I have more or less dedicated my entire life to the pursuit of unicorns. No, not the mythical creature, I’m talking about the cars that are made of unobtanium. As of this moment, at the ripe young age of 25, I’ve owned 96 cars. Many of which were never even available to Canadians.

I grew up in a family with a general interest in cars, but nothing like the insanity bordering on obsession that has enveloped my life. My mother has always kept an expansive library and at 3 years old, I found the only book about cars, and over the following days spent every moment possible glossing through it until she finally tired of all the drool and crayon markings, and put it on the highest shelf. Looking through the book over two decades later, it’s clear that I was most enamored with the “pagoda roof” Mercedes-Benz 280SL. That passion never faded.

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2006 was the year that I got my license, and with it, a Buick Grand National. Before anyone accuses me of being a spoiled brat, I should add that I inherited the car. My father passed away in 2001, and left the GN to me. He was the original owner, buying it new in November of 1986 and it had just a touch over 60,000 miles when I got it. I did my due diligence and had it towed in for a new battery and full service, then it was time for me to hit the roads.

The day I got it back from the mechanic, I picked up two friends and went for subs. Then went to an empty parking lot and did lots of donuts. Was it a good car for a 17 year old kid, filled with testosterone and bad ideas to get his hands on? Absolutely not. Did I wrap it around a pole? No, not yet at least.

By the end of that summer and 1000 miles of shenanigans later, it was time for me to find a sensible winter vehicle. With no intention of driving the GN into December, I acquired myself a print copy of Auto Trader and went on the hunt.

As any car guy does, I spent days leafing through the magazine obsessing over every last detail, until I found the car for me. This time, a metallic emerald green(a colour only available for the last year) ’92 Lincoln Mark VII with tan leather. It had 302 cubic inches of fox-body rear driven glory, in a mature-sensible shell. I went to see it that night, made a low ball offer that the owner accepted and left a deposit. When I called the owner the next day to arrange pick up, he told me somebody gave him his full asking price later that night and I could pick up my deposit at any time.

I hadn’t quite gotten the hang of car buying yet, a skill that I’ve managed to somewhat perfect over the last ninety something cars. With October almost over, I made a desperate call to our family mechanic and he told me he had a ’92 Oldsmobile Cutlass. Sight unseen, I agreed to buy it. All I knew at that point was that it was burgundy and wrong wheel drive. But when I came to pick it up a day later, I was pleasantly surprised to find out it was an “International Series”. For those not in the know about obscure early 90s General Motors trim levels, this was the cream of the crop. It had an oem CD player, sunroof and best of all, GMs famous 178 way adjustable leather seats. Not to mention silly globe badges everywhere.

The real surprise came under the hood. Where I expected an anaemic multi-port fuel injected 60 degree V6, there was an LQ1. We’re talking the high-revving, 215hp 3.4 Twin-Dual Cam motor that was hated by Goodwrench techs everywhere for it’s 13 hour timing-belt replacement and 4 hour alternator replacement. So the perfect car for me to learn how to wrench, right?

I fell in love with it immediately, and I know what you’re thinking, this was a result of it being my first car that I purchased with my own money. But I really don’t think it was that simple. Rather, it was the idiosyncratic nature of that black-magic powered, redheaded step-child of an engine combined with a trim package that consisted of gadgets that worked when they wanted… and lots of globe badges. Who knew a W-Body could have that much character? The car quickly asserted it’s dominance over me. It started when it pleased, idling perfectly when at shops, stalling at lights when not. It was an angry old misfit of a machine made from parts unknown.

Quickly I learned what appealed to me and this is where things got progressively worse. The only way I can describe the following several years is a bad case of mad-car disease. Scanning craigslist and Kijiji, soon I found another International Series which I used for parts to keep mine going. I slept on a friends couch the day I brought it home. Apparently normal people don’t buy cars to have spare parts for their own.

If that’s the case, I don’t want to be normal.

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From there, it was a 5 speed ’89 Cavalier Z24. Then a pearl ’98 Oldsmobile Aurora, with the rare Autobahn package. When that blew it’s head gasket, in typical Northstar fashion, the next logical progression was buying a ’99 Cadillac STS with a Northstar, right? Then my girlfriend at the time needed a car, so I bought a supercharged ’03 Grand Prix GTP. It incurred a few bumps and bruises over the years but she learned quickly and took excellent care of it. Although I didn’t always enjoy having to hear about the car acting funny.

The following summer, I bought a Dark Green Grey Metallic ’96 Impala SS, which I later traded for a white/grey ’92 GMC Typhoon #1805. After I sold the Typhoon, I bought a ’98 Regal GS and installed an aftermarket turbo kit. You’re probably thinking, didn’t the GS come factory supercharged? Correct, but with an NA intake manifold, turbo and front mount intercooler I managed to pull 310whp out of the car. I know I seem like a total GM fan boy, but in this time frame I also owned a ’96 Mystic Cobra and ’90 Taurus SHO for a few months respectively.

Then when I finished school it was time to buy something responsible. I bought an ’07 F150 XLT Crew Cab. The following summer, I installed a Magnusson twin-screw supercharger on it. It had a liquid-to-air intercooler and 44lb fuel injectors, and even with a dyno tune I was averaging 12mpg out of the already thirsty 5.4L 3V triton. And now I had to run premium gasoline. So much for responsible.

Being forced to find a more efficient daily driver, I found what became known to my friends and I as “beater GN.” It was a tired 87 GN with 180,000 miles, T-roofs were silicone shut, it had rust bubbles up the a-pillar and around both rear wheel wells but completely solid underneath and ran mint. With my other GN more or less a garage queen, it was an invigorating experience to get to drive one daily and despite it’s condition, still received compliments and thumbs up wherever I went.

Cruising down Ohio back roads returning from the Buick Performance Nationals in a Grand National was truly special. Telling my then girlfriend that the windows were down to feel the warm breeze, when truly I just didn’t have to listen to wind noise and rattling from the t-roofs that way. Being asked by the border officer to give it some gas when pulling away. Finally getting home at 1am and wishing I was still behind the wheel. There is something that unicorns bring to the table that “normal people cars” don’t.

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After that summer I sold the supercharged F150 and beater GN and bought a ’12 F150 XTR Crew Cab with the 5.0L, a decision I regret to this day. I’ve since gotten rid of it and vowed never to buy a normal car again. I understand the appeal to the most, but I just can’t drive normal. These days I daily a ’00 Volvo V70R and have an ’87 Mitsubishi Starion, ’97 Volvo 850 AWD turbo, ’96 Impala SS and my Grand National in the garage.

So from here on out I look forward to providing you with regular Craigslist/Kijiji and Auction car reviews, highlighting the most obtuse cars, that only weirdos like you and I will appreciate. And I’ll probably end up buying them.

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Quote Of The Day: The Golden Fleece http://www.thetruthaboutcars.com/2015/01/quote-day-golden-fleece/ http://www.thetruthaboutcars.com/2015/01/quote-day-golden-fleece/#comments Thu, 08 Jan 2015 22:23:46 +0000 http://www.thetruthaboutcars.com/?p=974194 Today’s Quote of the Day actually comes from someone I know, with a used car question. “this guy im sleeping with wants to sell me 05 caliber 125k [77,000 miles] for $6k. Good deal?”  You don’t need to be a North Georgia used car salesman to know that this is a deal that delivers a 5-6x […]

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Today’s Quote of the Day actually comes from someone I know, with a used car question.

“this guy im sleeping with wants to sell me 05 caliber 125k [77,000 miles] for $6k. Good deal?” 

You don’t need to be a North Georgia used car salesman to know that this is a deal that delivers a 5-6x ROI on your $1,000 Manheim Special Caliber.

As it turns out, the gentleman selling the Caliber has no less than four lots and drives an Aston Martin and a late model Gallardo. Clearly, I’m in the wrong business.

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That Green Car: Winning And Losing At Your Own Auction http://www.thetruthaboutcars.com/2014/09/green-car-winning-losing-auction/ http://www.thetruthaboutcars.com/2014/09/green-car-winning-losing-auction/#comments Fri, 05 Sep 2014 18:27:13 +0000 http://www.thetruthaboutcars.com/?p=906721 Jack Baruth has a very thoughtful post on selling his green stick, apparently an Audi. (See No Fixed Above: Stick it to ’em.) Here I delve into his logic as a devil’s advocate. A key observation throughout his post is that most (newish) used cars move through dealerships, and for many there is an auction […]

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Jack Baruth has a very thoughtful post on selling his green stick, apparently an Audi. (See No Fixed Above: Stick it to ’em.) Here I delve into his logic as a devil’s advocate.

A key observation throughout his post is that most (newish) used cars move through dealerships, and for many there is an auction through a Mannheim or Adesa in between the trade-in and the used car lot. The same is true in Japan: the graphic above is of a car auction in Osaka, though on-site buyers sit at computers with a huge display of the two virtual “lanes” with no audible action. (For more see my post on a June 2014 visit at Auto Auctions, Japanese Style.)

1. Now you and I may want a stand-out color, but I think if Jack talked to marketing people, this blandness comes from careful study of what color choices consumers make – not from dealers and auctions. After all, there remain regional differences in color preferences across the US, and particularly for high-end cars there’s a significant bespoke demand. Dealers only see a small and potentially unrepresentative slice of the market. Furthermore, color decisions have to be made well before the start of production, long before dealers get a chance to order. Things can and do go wrong in paint shops (I’ve been through BMW Spartanburg with PPG as guide, gloating over a problem their rival BASF was having). Things get tested in advance. Color choices must be made on a predictive basis.

As it happens, there’s a good history of the professionization of colorists, of how such predictions are made: Regina Lee Blaszczyk’s book, The Color Revolution, MIT 2012. She spoke at the Business History Conference a few years back at the Hagley Museum outside Wilmington; DuPont was central to mass-market cars being available in color, and their museum has some wonderful examples. Be warned, though: a lot of her book is about the fashion industry and about the technical side of developing color systems and color cards, and on experimental psychology with color perception, and not just the impact of wartime camouflage experts bringing their skills to Earl Harley’s design studios where they could play with DuPont’s new Duco paints.

2. Back to used cars. I think Jack argues that the variance of niche markets is high. Jack was fortunate in that he got a “high” draw, finding that match with someone else who really wanted a stick shift in a green package. High variance means that when you may have the opposite experience when you try to sell your pink Cadillac – wasn’t that a Mary Kay cosmetics thing? – and you may get a bad draw. Indeed, the only pink Caddy I know is used purely for its decorative value, such as that is, parked outside the Pink Cadillac cafe in Fancy Hill, Virginia. That use surely reflects a low market value, not a high one – be warned!

3. Jack is very correct in noting that dealerships need to turn their inventory. What he fails to point out is that he personally bore the same costs. So let’s detail those:

  • Jack surely continued to insure his car,
  • he accumulated (pro-rated) property tax and paid various annual registration fees,
  • he lost the use of the part of his garage in which it sat,
  • he lost the opportunity of having that new drive he wanted today rather than months from now,
  • he continued to face the slow but inexorable depreciation from which all cars suffer, and
  • he had to personally put in time first marketing his car and then acting as his own salesman.

Now personally Jack may have had fun being a used car salesman, and playing with Craigslist and similar services, so those weren’t costs, they were benefits. Would that be true for you? Particularly if it takes 6 months to sell your Pink Cadillac? And if you can’t sell your old wheels immediately, the other costs add up: the longer you wait, the lower the net price you are actually charging.

A dealer sitting on an inventory of 200 cars can’t ignore such costs. You shouldn’t ignore them either, and you may not be so lucky in making a good match.

4. Indeed, I suspect the buyer of Jack’s car must have had money to burn: if you are lusting after a lime green car, why would you tell the seller that? Instead you’ll make a lowball bid: when markets are thin, the buy-sell (ask-offer) spread is high. You can find a bargain if you’re patient as a buyer, and are good at bluffing when you’re holding a losing hand. You can lose a lot if you’re impatient as a seller, and not a good horse trader.

5. Conclusion: Jack offered one anecdote of coming out well in a thin market. Here’s mine of doing not so well, shopping for a vehicle with niche specs on a Chevy Cruze early this year.

Sticks aren’t popular, and for a daily drive in DC they were less popular than dealers had hoped – I know why, having made a day trip from the mountains of Virginia into stop-and-go traffic in my Cruze. My guess is that the dealer may well have accepted them as part of their allotment (standard factory “push” marketing, where dealers must accept unpopular combinations of features). So even though we made it clear that a stick was what we wanted, we also made it clear that we weren’t going to hang around if they tried to get a premium from us. We got what appeared to be a very good price, I spent quite a bit of internet time checking things out. Our hand was weakened a little when we didn’t want black, not many in inventory, but we were OK with a couple different colors [green and blue but not dark blue] and there were enough around. So we didn’t have to give back anything at that point.

When we went to pick up the vehicle and saw the actual interior, it was clear from our faces that it was no go. Black. Not just black, but some sort of textured “cloth” surface. And all the cars they had were that same black. All our negotiating power disappeared: instead of getting a better price than with an automatic, we ended up handing back a chunk of the margin, though we still paid less that what any of the other dealers we visited asked for. (They had to make a dealer trade, so out of pocket costs may have eaten up that difference.)

So thin markets are thin markets, patience and negotiating skills matter.  But those niche cars are out there. You don’t have to pay to be bland, but it does carry risk.

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Used Car Prices Set For A Decline: ALG http://www.thetruthaboutcars.com/2014/08/used-car-prices-set-decline-alg/ http://www.thetruthaboutcars.com/2014/08/used-car-prices-set-decline-alg/#comments Tue, 05 Aug 2014 18:59:13 +0000 http://www.thetruthaboutcars.com/?p=882226 The current shortage of used cars, along with record prices for second-hand vehicles, is likely to come to an end, according to ALG. According to ALG, June 2014 marked the lowest level of used vehicle supply, with both Cash for Clunkers (which took an estimated 700,000 vehicles off the road), as well as low new […]

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The current shortage of used cars, along with record prices for second-hand vehicles, is likely to come to an end, according to ALG.

According to ALG, June 2014 marked the lowest level of used vehicle supply, with both Cash for Clunkers (which took an estimated 700,000 vehicles off the road), as well as low new vehicle sales from 2008-2012 making used cars a scarce commodity.

But with rising sales over the past two years, a new pool of trade-ins, as well as vehicles coming off short 24 and 36 month leases should mean a broader supply of used cars.  Currently, the lack of new car sales in 2009 is affecting used car inventory levels today, but ALG’s forecasts predict an upswing occurring in 2016.

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Crapwagon Outtake: The Island Of Misfit Brands http://www.thetruthaboutcars.com/2014/06/crapwagon-outtake-the-island-of-misfit-brands/ http://www.thetruthaboutcars.com/2014/06/crapwagon-outtake-the-island-of-misfit-brands/#comments Mon, 23 Jun 2014 14:58:11 +0000 http://www.thetruthaboutcars.com/?p=850186 Daihatsu’s American foray lasted just four short years, from 1988-1992. Roughly ten Daihatsu cars are still for sale – not bad, considering they probably didn’t sell many more than that in total. Ok, that’s an exaggeration. Daihatsu apparently sold 50,000 cars over a four year span, with 200 retail outlets and a marketing pitch that […]

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Daihatsu’s American foray lasted just four short years, from 1988-1992. Roughly ten Daihatsu cars are still for sale – not bad, considering they probably didn’t sell many more than that in total.

Ok, that’s an exaggeration. Daihatsu apparently sold 50,000 cars over a four year span, with 200 retail outlets and a marketing pitch that hinged on “BMW-like quality” at rock bottom prices. Given that Daihatsu exited the US market some time before my 4th birthday, I have no idea whether any of this is true or not. B&B, please fill me in here.

What I do know is that you can buy a Daihatsu Rocky for about $4000. This example has just 106,000 miles on it, and is one of a now-extinct breed of three-door, BOF SUVs that aren’t made by Jeep. But waitthere’s more.

If you’re looking for something a bit more car-like, there are a number of three-cylinder Daihatsu Charades available, in varying states of crapiness. The lone sedan offering is looking a little oxidized, while this black hatch looks nice and clean, although the “salvage title” is a little scary. This white example promises 40 em pee gees, while this one sneaks in under the $500 LeMons threshold.

Thanks to Max (@2fast2finkel) for finding the Daihatsu Rocky

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Hammer Time: Memories of Metros http://www.thetruthaboutcars.com/2014/05/hammer-time-memories-of-metros/ http://www.thetruthaboutcars.com/2014/05/hammer-time-memories-of-metros/#comments Fri, 30 May 2014 04:01:59 +0000 http://www.thetruthaboutcars.com/?p=834201 There it stood, right next to the Michael Jordan Wheaties display. A brand-new 1992 yellow Geo Metro convertible. Price Chopper, a local New York supermarket chain (think Pathmark or Albertson’s on crack) was opening up a brand new location in Saratoga Springs. The Metro would be the perfect vehicle for upstate New York’s salty roads […]

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There it stood, right next to the Michael Jordan Wheaties display.

A brand-new 1992 yellow Geo Metro convertible.

Price Chopper, a local New York supermarket chain (think Pathmark or Albertson’s on crack) was opening up a brand new location in Saratoga Springs.

The Metro would be the perfect vehicle for upstate New York’s salty roads and wickedly cold weather for one irrefutable reason. It was free… after tax, tag and title.  The only thing I had to do was figure out how to win it.

So I got busy. 150 entries a day for 3 full months. 13,000 in all. The day came for the drawing, and I won!

25 pounds of free meat. To make matters worse, I was a vegetarian at the time.

So what did I do? I got a friend’s cooler. Put in 25 pounds of filet mignon, and took a three and a half hour drive home to impress my dad.

He was impressed. Sadly, it would take me another 10 years before another Geo Metro would enter my life.

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The first was a burgundy 1997 four door automatic. I bought what was arguably the shittiest of all Metros for $2000 back in 2002, and sold it for $4000. Doubled my money. Even the paint flaking on the roof and the trunklid didn’t detract from the mythical promise of exceptional fuel economy.

Unbeknownst to the buyers of these loveless shitboxes, the automatic version of the Metro drained the MPG numbers by at least 7 mpg. The powertrain was like a rubber band that gave you more resistance as you tried to stretch it out. If you drove it around town and wanted to keep up with traffic, the four-door three speed automatic got only about 30 mpg combined.

I would later find out that a a Tercel could beat it in real world driving. A far heavier and better engineered Civic could match it. Even the almost as cheap Chevy Cavalier could keep up with the Metro in terms of real world fuel economy. Once I sold that Metro, I thanked the good Lord for separating me from this piece of mobile tupperware and proceeded to focus more on W124’s, rear-wheel drive Volvos, and anything made by Subaru.

I called those nicer models the “wanna-be’s”. As in folks who wanted a Lexus or a BMW, but couldn’t afford their price premium in the used car market, would wind up buying one of these three models instead. I bought plenty of other vehicles as well. But chances are, if there was a well-kept trade-in at the auction that matched one of these three models, I would buy it. New car dealers only cared about financing the new and late model vehicles back then. Older cars were a no-no nadir. So it was relatively easy to find good ones to resell.

As time went on, I began to see those Metros regularly hit the $500 to $1000 mark at the auctions. Quality sold, and the Metro wasn’t it. Nobody wanted them until very late 05′ when Hurricane Katrina hit.

Then things started to get a bit weird at the auctions. I would see Metros matching the prices of Volvos that were not much older and infinitely more deserving of a buyer’s attention. Contrary to the frequent eulogizing of cheap defunct cars, I had zero love for the Metro. It was a deathtrap that anyone who cared about their well-being would stay the hell away from.

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Then I found a Metro with good seats. It was called the Suzuki Swift. A 5-speed hatchback with a 4 cylinder engine, the Swift was surprisingly fun and for $600, as cheap as the average repair for a newer Volvo. My wife loved it. My mom thought I was an irresponsible father, and after an interminable delay in market interest, I was finally able to unload it for $1500.

Why the hell did I like that thing? I had two kids and a stay at home mom to think about. Not some ancient tin can of a car.

Well, it got worse, because within three months, I would buy two more Metros.

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The first was a 1996 3-cylinder hatchback. White. 90k miles.  $500 plus a $50 sale fee.

It was a steal of a deal. I eventually replaced the wheels and sold it for $2800. Then, I struck fool’s gold with a  first generation Geo Metro at an impound lot auction in South Atlanta.

Imagine 27 dents, 37 dings, and three shades of green.

Imagine 27 dents, 37 dings, and three shades of green.

It was a snot rag. Three shades of green and inexplicably worth my time. The driver seat had virtually disintegrated and yet, there was an immaculate one on top of the back seat along with a driver side mirror. It was a salvage vehicle that was wrecked way back when it was worth something.

188,000 miles. Rebuilt title from Alabama. I bought it, running, for $125. I figured why the hell not.

Well, no A/C in Georgia and a slim chance for profit for starters.  I wasn’t about to put it up at my retail lot. So I drove it around the neighborhood for a bit.

It ran fine. Perfect. After replacing the driver seat and tossing the old one in a nearby dumpster, I decided to sell it at the one place that could give me a price premium for unique crappy cars.

Ebay.

Old Peugeots at the auctions? Ebay.

A Volvo 780 bought for $90. A nine-year old Subaru Impreza with nothing but primer for paint that I bought for $76.25 out the door? Both ended up on Ebay.

Low-mileage Crown Vics, Colony Parks, Mark VIIIs and 1st gen Priuses with body damage. All I had to do was buy them, take 24 pictures, and write up a glorious soliloquy of pithy summations worthy of an Ebay audience. They brought strong money.

I would buy, sell, and meet the new owner at Atlanta’s Hartsfield Airport with a free Starbucks in my hand. I averaged about 150 deals a year during the mid-2000’s and about a third of them were on Ebay.

This car held onto my conscious thoughts like a fungus. One day, I decided to do a financial spreadsheet. Like a lot of former financial analysts, I suffered from this nasty little OCD-like tendency to put anything that required a long-term mathematical answer into a spread sheet.

This time, I pitted the Metro against a 2001 Yamaha XC125 and did the math to figure out which one would be cheaper in the long run if you maximized their passenger count. Long story short, the two trained monkeys riding a scooter wouldn’t match the five Pygmys that would be stuck in the Metro.

Now that I figured out the Fantasyland part of my life, I decided to sell the Metro. My first law back then, which I still abide by now, is to never fall in love with a car.

10 days later, the Metro sold for all of $700. This is where things got weird. The very next day, the buyer drove 6 hours from western Tennessee down to Atlanta to meet me. He was one tough looking, intimidating, son of a gun.

Sunglasses, tattoos, one of my friends remarked that he had the smell of shit and spit. I said one word, “Hi.”, and for the next hour, all I did was listen to a really nice guy tell me about every single Metro he has ever bought while staring at my reflection on his sunglasses. This guy was made for this car. I pocketed the $700 and decided that I had made a match in small car heaven.

All these memories came back to me this evening for one reason.

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The new Mitsubishi Mirage. I have yet to drive it. But the Mirage is probably the first car whose parsimonious pedigree harkens back to that nearly forgotten world of basic cheap cars in the United States.

In today’s world, where a basic economy car comes with over 100 horsepower, 15 inch aluminum wheels, and 10 airbags, the Mirage strikes me as something that is worthy of the old Metro’s econobox heritage.

So count me in as one guy who is willing to cheer for a contender that is a pure pretender.  I look forward to buying them real cheap when 2020 comes around. Who knows? By then the Mitsubishi Mirage may replace the Geo Metro as the penurious used car of choice for the modern day tightwad.

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Hammer Time: PT Cruiser? http://www.thetruthaboutcars.com/2014/05/hammer-time-pt-cruiser/ http://www.thetruthaboutcars.com/2014/05/hammer-time-pt-cruiser/#comments Mon, 19 May 2014 21:45:06 +0000 http://www.thetruthaboutcars.com/?p=461266 $11,800. That was the asking price for a 2008 Chrysler PT Cruiser down at my local Chrysler dealer back in June 2008. Throw in a $1500 rebate or the “Refuel America” $2.99 per gallon guarantee into the equation, and you may have ended-up with a pre-tax, tag, title price right around $10,300. Not bad. Not […]

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$11,800.

That was the asking price for a 2008 Chrysler PT Cruiser down at my local Chrysler dealer back in June 2008. Throw in a $1500 rebate or the “Refuel America” $2.99 per gallon guarantee into the equation, and you may have ended-up with a pre-tax, tag, title price right around $10,300.

Not bad. Not bad at all.

Then again, was it? There are a lot of long-term factors to consider when approaching any of the less popular new cars that are in their last years of production. Not all will be a good deal.  But you may be surprised. Join me now as we journey down the PT-shaped rabbit hole.

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If you’re not an enthusiast, and simply wanted a ‘keeper’ car, that $10k Cruiser may have been a great deal in 08′. Even with the abysmal gas mileage and the pointless towel rack in front of the passenger seat.

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Folks who don’t drive very much… hmmm… Let’s say that folks who frankly don’t give a damn about cars at all were the target du jour for most Cruisers that went out the door. It was a styling statement in a cheap car world that ranged from plasticized SUV wanna-be (Dodge Caliber) to automotive androgyny (Toyota Yaris).

PT Cruisers of the time typically came in two packages. Blah boring basic and turbo/convertible kinda interesting. This is a nuance that shouldn’t be missed. Sometimes you can find a nugget of used car goodness within an ocean of a model generation’s ennui.

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The right engine. The right trim package. The right seats. Pretty soon you are going from a strip model to a street hooner.

So what to buy?

As a long-term dealer and enthusiast let me cut one big choice out of your lineup.

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The entry level model. You like driving? Forget it. Don’t even bother. When you see an old PT Cruiser that has a low number in bold, and think to yourself, “Hey, that looks like a good deal!”, pretend like you just ordered a sundae and all you got was the ice cream.

Look at that sad little melting scoop of ice cream. It’s store brand surplus without the real whipped cream, the sweet maraschino cherry, sprinkles, nuts, caramel and whatever other trimmings you long for.

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Was it worth what you paid? Think about that. Most Sunday advertisements are selling you nothing more than cheap ice cream at a premium. Back in 2008, the real cost for the PT Cruiser came from getting that new car sweet tooth for a car that simply didn’t compare with a nice used Saturn Aura. Today, that same basic late model PT Cruiser car is a poor substitute for a 10 year old Nissan Altima.

Let’s also think about the old value quotient of hitting em’ where they ain’t. A Camry SE, an Accord coupe with a V6 and stick, and even the Malibu SS all have one thing in common.

They are usually too much money in the real world of buying cars. Most folks try to opt for the champagne popular car at the beer budget unpopular car price. In a perverse twist, many of these cars will handily outsell their less enthusiast oriented brothers and sisters.

You want value? Get the cheap wrapper with the nice stuff inside of it. The ‘old’ new car that was well-designed and given the great powertrain of a few years ago. The used car that you buy for the joy of driving instead of the brand or name that came with it.

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If you consider that to be a PT Cruiser, well, all the power to you. They certainly sell cheap.

 

 

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New Or Used? : The Most Reliable Car In The USA Is A …. http://www.thetruthaboutcars.com/2014/04/new-or-used-the-most-reliable-car-in-the-usa-is-a/ http://www.thetruthaboutcars.com/2014/04/new-or-used-the-most-reliable-car-in-the-usa-is-a/#comments Thu, 24 Apr 2014 14:42:56 +0000 http://www.thetruthaboutcars.com/?p=809362   Hi Steve, What would be the most reliable car I can purchase for about $7000-8000? And what would be the upper limit on mileage that I would even consider? Steve writes: I grew up in the food import business. So to me, the answer to this question is a lot like asking my Dad, […]

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coconut

Hi Steve,

What would be the most reliable car I can purchase for about $7000-8000? And what would be the upper limit on mileage that I would even consider?

Steve writes:

I grew up in the food import business. So to me, the answer to this question is a lot like asking my Dad, “What is the best cake I can get for $70?”

He would probably tell you that it depends on your ingredients, your cooking methods, your recipe, and what parts of the ingredients matter to you the most.

The ingredients when it comes to a used car is… the prior owner.

Like a pitcher in baseball who has an overwhelming influence over the outcome of the game, the prior owner’s maintenance habits and driving style has the greatest impact on the longevity of the vehicle when you’re shopping at this lower price range.

The cooking methods are… your own driving style and maintenance regimen. The way you cook those ingredients once you get them determines a lot of that long-term reliability.

My father’s Lincolns were rarely driven hard, and he took fantastic care of his cars. My mom was a rolling hurricane who routinely beat her cars to an inch of their metallic being. Some cars can easily handle the obscenity that is a person shifting from reverse to drive while in motion (Crown Vics come to mind), while other cars would likely be recycled into Chinese washing machines within five years (Chevy Aveo).

You need to be honest about the type of driver you are, the type of driving you do, and the types of wear you have commonly seen in your past vehicles. A diesel is often better for mountainous highways than an older hybrid, and a Lincoln Town Car will likely be a better fit for potholed streets than a Mitsubishi Lancer.

The recipe is usually… the manufacturer.  The ways you get to enjoy it depends on the way they built it.

Cars have their own unique manufacturing tolerances and varying quality levels built into their 180,000+ parts. Honda makes wonderful manual transmissions. Toyota is a world-class manufacturer of hybrids. GM and Ford make highly reliable full-sized trucks and SUVs, and BMW along with Porsche have offered sports cars that were truly the best in the business. The manufacturer that offers the best match for your automotive tastes will impact your reliability because, you will likely be willing to invest in the best parts if that car offers what you consider to be the optimal driving experience.

Does it sound like I’m evading your questions? Well, let me toss around the ingredients that matter to you the most then and give you a solid answer.

If cars to you are like water… no taste is the best taste… and you drive about 50 to 60 miles per hour on flat, boring, mundane roads, then find yourself a 2007 Toyota Corolla. Get a low mileage version with a 5-speed that was driven by a prior owner who knew how to handle a stick. 07′ was the last year of that particular generation and historically, vehicles that are later in their model runs tend to have fewer issues.

If cars are a matter of sport and passion, I have an incredibly weak spot in my heart for second generation Miatas. A low mileage version owned by a Miata enthusiast is a helluva deal. Here in the southern US, an 03 or 04 with around 60k miles would sell for around $7000. I also like the Honda S2000 and the BMW Z4. Those will have higher miles than the Miata, and the Z4 in particular may not match the Miata for reliability alone. But those two models may offer certain ingredients that are more appealing to you.

Finally, if you’re looking for that same automotive luxury and richness as a five layer coconut cake filled with Godiva chocolate flakes, and coconut that was flown directly from the Polynesian Island of Tofoa, the sad news is there are no reliable $7000 Rolls-Royces or Bentleys. However a 2001 Infiniti Q45 is a frequently overlooked luxury model that I would keep a keen eye on if I had $7000 to spend on a ‘rich’ car. One with less than 100k miles, if you can find it, would be a fantastic deal.

Oh well, gotta go and exercise. My morning cake came from an article I wrote a couple of days ago and I now have to remove all the calories that are stuck in my big fat head.

 

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Hammer Time: Might As Well Go For A Soda http://www.thetruthaboutcars.com/2014/04/hammer-time-might-as-well-go-for-a-soda/ http://www.thetruthaboutcars.com/2014/04/hammer-time-might-as-well-go-for-a-soda/#comments Thu, 10 Apr 2014 14:56:11 +0000 http://www.thetruthaboutcars.com/?p=793313 “Steve, what car should I buy?” “Well, if I give you the real answer, you’ll roll your eyes and buy what you want anyway.” “No really. I’m open to new ideas.” “Okay then! Buy a 2012 Malibu. Buy a Buick Park Avenue. Buy a Dodge Raider or buy a Suzuki Equator.” “Ummm… are you sure […]

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Click here to view the embedded video.

“Steve, what car should I buy?”

“Well, if I give you the real answer, you’ll roll your eyes and buy what you want anyway.”

“No really. I’m open to new ideas.”

“Okay then! Buy a 2012 Malibu. Buy a Buick Park Avenue. Buy a Dodge Raider or buy a Suzuki Equator.”

“Ummm… are you sure about that?”

“Hell no! Now go buy me a soda and buy yourself a Camry!”

A lot of enthusiasts give grief to the mainstream publications in this business. Sometimes I kinda don’t get why because to be brutally blunt, the “best car”  is usually firmly planted in the third row of most folk’s priorities when it comes to buying their next car.

For all the manufacturers desires to offer power, performance and utility together in one great vehicle, most of the general public just doesn’t care.

They usually want a brand first. Looks second. Then there’s fuel economy, safety, perceived quality… and a long, long list of excuses to get away from the less popular alternatives.

The best new car is rarely the best selling car in this business. There are Mazdas that I love which have a snowballs chance in hell of taking on the Toyotas and Chevys. Even if they do a far better job of checking off most consumer’s real world priorities, it’s a moot point and an inevitable outcome.

If Volvo came out with a breakthrough product, I seriously doubt that most shoppers of prestige brands would even remotely consider it. Never mind that there are plenty of reputable sources out there that can help dispel those myths as to which models now offer the best bang for the buck. Volvo no longer ranks in the pantheons of marketplace leaders. Case closed.

Even when mainstream publication have the gall to endorse an Oldsmobile or a Suzuki over a Camry or an Accord, the result of that neighborly advice is that people just won’t take it.

Why? People are brand loyal, and they are bias loyal.

Click here to view the embedded video.

That Ford station wagon that killed Aunt Edna’s dog 35 years ago?  Well, that just means Detroit cars are pure crap. Never mind that carsurvey, TrueDelta, and even the long-term reliability index I am co-developing have disproved a lot of those myths.

Cadillac can’t ever match a Mercedes. Mercedes isn’t as good as a Lexus. Lexus isn’t as good as a BMW. On and on through the merry go round of biases and BS until you can’t help but SAAB at the futility of recommending a great car at a steal of a price.

Kizashi! What? Exactly. It’s a great car if you play around with a stickshift version. You say you’re an enthusiast… but then when I recommend a stick version, you look at me like I’m from Mars.

The truth is that enthusiast cars don’t sell. The best cars for pure driving enjoyment, don’t sell. The Miata has been shucked in the low 10k range of annual sales for a long time now. Mustangs? An ungodly sales decline. There are some who blame these types of things on demographics or the police state. But I have a third theory.

American tastes increasingly resemble the American interstate. There is a sameness and sadness to the menu which is dictating that the best cars are psychologically unaccessible. Nobody wants to get off the straight and dull road that leads to the Camcrods, the Cor-antr-ics and the American badged truck.

Are all those models good? Well, yeah. But good seldom equals love. You want love? Go tear down a bias and rediscover why a great car is worthy buying.

Don’t forget the radar detector.

P.S. :  Feel free to share your thoughts below on great cars that have missed that elusive mark of mainstream acceptance over the years. I am going to be spending most of today getting a bonded title for a 21 year old Cadillac limousine. I will need intensive comic relief thanks to the interminable tortures that come with taking care of that type of title issue at the DMV. So please, feel free to share your stories and insights. I can always be reached directly at steve.lang@thetruthaboutcars.com .

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New Or Used? : More Troubles With Old GM http://www.thetruthaboutcars.com/2014/04/new-or-used-more-troubles-with-old-gm/ http://www.thetruthaboutcars.com/2014/04/new-or-used-more-troubles-with-old-gm/#comments Tue, 08 Apr 2014 13:42:10 +0000 http://www.thetruthaboutcars.com/?p=790249 A reader writes:  I have a 2007 Pontiac G6 coupe which, up until last fall, had been a pretty decent car. Then, in October, I had to replace a clutch and a flywheel ($1,700).  While the clutch was being fixed the driver’s side window stopped working and is now propped shut with wooden blocks.  Within […]

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rogerhuyseen
A reader writes: 
I have a 2007 Pontiac G6 coupe which, up until last fall, had been a pretty decent car.
Then, in October, I had to replace a clutch and a flywheel ($1,700).  While the clutch was being fixed the driver’s side window stopped working and is now propped shut with wooden blocks.  Within a week the check engine light came on.  Friend who works at a GM dealership checked it (no charge) and determined it needed a air temp sensor.  The OnStar report also indicates that the ABS and Stabilitrack is not working and requires attention.  Then, about a week ago the key fobs and trunk release stopped working.  At first I thought it was ironic that so many things could go wrong at once, but now I wonder if all these problems are interrelated and somehow result from some kind of electrical bug.
Do you have any input on whether this could be the case and how expensive a fix could be?
In addition to these problems, the car also requires a ball joint, a tie rod end, and 4 new tires by spring (I have winters on it now).  This takes me to my second question, which is whether it is worth fixing this car or cutting my losses and buying something new.
I am really not keen on having another car payment, but if I do buy another car I would be looking for something used in the $10,000 to $15,000 range.  Because I live in Canada and have been experiencing the winter from hell, I would be looking for all-wheel-drive and would prefer a manual transmission.  This seems to leave the only options as BMW, Audi, and Subaru.  The only problem with those are the fear of ghastly expensive repair bills, particularly with the Germans, and especially considering these cars, at that price range, will have in the range of 125,000-200,000km on them.
So, the questions are, should I dump the G6 now and move on to something else?  Am I crazy for even considering the above-mentioned cars?  Are there other options available?
Steve Says
Your car is suffering from an acute case of Roger Smith syndrome.
This is a chronic disorder that is attributable to a bacteria known as planned obsolescence. All cars have it to varying degrees. However, certain defunct GM models that only existed to placate a bloated bureaucracy of bean counters are now the poster children of this disorder.
How do you cure your car?  By taking the current issues to an independent mechanic who is well regarded, and pay for those repairs. Window regulators, ball joints, tie-rod ends, ABS Sensors, all of these have shorter lives in a harsh environment. None of this is fatal for your Pontiac unless you are compelled to pay the new car dealer premium for fixing them all.
I would spend the $2000 (my rough estimate) since the car will likely sell for that much less with a propped up window, the ABS issue and the needed suspension work. If you just hate the car and want to go back to that merry-go-round of new car payments, that’s fine as well. But I am a card carrying member of the “fix-it” union, and your car is still worth far more alive than dead.
So fix it. Consider a nice seat or stereo upgrade at a local auto recycling center or Ebay. Give it a good detail, and pretend like it just came off the showroom floor. Because you know what? More than 99% of the good within this once new vehicle is still there.
You just have to bail it out… and remove those few parts that are old GM.

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New Or Used : To Fleet? Or Not To Fleet? http://www.thetruthaboutcars.com/2014/04/new-or-used-to-fleet-or-not-to-fleet/ http://www.thetruthaboutcars.com/2014/04/new-or-used-to-fleet-or-not-to-fleet/#comments Fri, 04 Apr 2014 15:10:34 +0000 http://www.thetruthaboutcars.com/?p=787681 Hi Steve, I really enjoy your articles.  Thank you. I have a question about fleet cars.  I was driving to a meeting in one of the fleet cars my employer has.  Nothing special, a late model Ford Fusion .  And I was thinking is this a better deal to buy when they get rid of […]

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golfcarts
Hi Steve,

I really enjoy your articles.  Thank you.

I have a question about fleet cars.  I was driving to a meeting in one of the fleet cars my employer has.  Nothing special, a late model Ford Fusion .  And I was thinking is this a better deal to buy when they get rid of it than another used car?  Then I realized that people who use a car that doesn’t belong to them trash it. So I thought, “No way!”

Then I realized that the same people who don’t take care of it, aren’t the same people who maintain it.  So are fleet cars a better deal then non fleet on the market? After giving them a good cleaning does it not matter one way or the other all other things being the same?

There is an age old saying that applies here, “It’s not the horse. It’s the rider.”

If you have ever seen a horse trained, or experienced a long scenic horseback ride with someone who had never been a horse before, you’ll get the gist of this saying real quick. Folks who use natural horsemanship techniques to train their horses are usually able to give their horses a better life. As it relates to cars, just change two words and you’ll have the core of what differentiates a good life for a used car from a bad one.

It’s not the car. It’s the driver.

The daily driver is going to have a far greater impact on the long-term quality and longevity of a vehicle than the manufacturer. So let me cut to the chase and ask you the two salient questions that apply to your particular situation.

Do you know who drove this vehicle? Or how they drove it?

If you don’t know, then either try to find out or accept the fact that there is more risk to the long-term ownership equation. The deal may offset those possible expenses.

What has always shocked me over the years is that most consumers are willing to throw thousands of dollars into the wind without first taking a car to have it independently inspected. I look at everything before I buy, as did my grandfather who came from a long line of successful cattle traders. My advice is to get that vehicle looked at by someone who has wiser eyes when it comes to cars. A fleet vehicle may have a good maintenance regimen but that doesn’t mean it will be a sound purchase.

 

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Hammer Time: Portrait Of A Misdemeanor http://www.thetruthaboutcars.com/2014/03/hammer-time-portrait-of-a-misdemeanor/ http://www.thetruthaboutcars.com/2014/03/hammer-time-portrait-of-a-misdemeanor/#comments Thu, 27 Mar 2014 04:20:21 +0000 http://www.thetruthaboutcars.com/?p=760409 6:30 P.M. on a Sunday evening… and three more vehicles just pulled up to my car lot. You may think that’s a good thing, and it would be if people didn’t park all over the place. One person parks in one direction. The guy coming from the west parks right in front of that guy, […]

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lot1

6:30 P.M. on a Sunday evening… and three more vehicles just pulled up to my car lot.

You may think that’s a good thing, and it would be if people didn’t park all over the place.

One person parks in one direction. The guy coming from the west parks right in front of that guy, and so forth. This happens in infinite combination until the process of getting people in an out becomes a personal pantomime of moving and motioning cars. At certain times of the day my work becomes comparable to the late Marcel Marceau.

I knew I had to do something about it. However, I didn’t expect that something to become the enabler of my 11 year old son’s criminal history.

The day started innocently enough. Every Sunday afternoon, my family and I will always do three things.

We eat plenty of samples while shopping for our groceries.

We take long walks with the dogs.

And finally, we do something semi-athletic.

It can be throwing around a frisbee. Shooting hoops. Or on this particular afternoon, playing around with a slightly deflated football which is easier for young kids to throw and hold.

This is the weekly low-cost version of our family’s very own preventative health care plan. This time we drove off in a 1983 Mercedes 300D, and headed to a nice parking spot in the periphery of Deliverance country. A small town. No nearby shops.

You would think that the place would only host a few local biking diehards and that rare Georgia family willing to do an outdoor activity.

Well, the park was completely packed to the gills. Everyone and their dog was out either walking or riding bikes. Just as the 70’s era brought out the fitness craze in the West Coast, the 70’s temperatures resulted in a turnout of outdoor enthusiasts that was more like California and less like… well… Georgia.

So we got out and I did the football thing with my son. A game of catch. Some basic football plays. I threw, he ran. He threw, I jogged. The world was sunny and beautiful.

After about 45 minutes of this we decided to take a break and get some water. This is when the world started to become complicated.

The first water fountain we went to was broken. No water. No chance. So we started walking down the trail to find another one.

 

lot6

Now when I say trail, I really mean a bicyclist’s paradise. The Silver Comet Trail is one of the few things done right in my neck of the woods. Smooth flat ground. Plenty of shade. Everyone follows the rules, and the scenery changes enough to make your car-free ride interesting whether you go north or south.

However if you’re a walker, like the two of us, every minute or so a small fleet of bikes is going to go right past you. After a while you start hearing, “On the left!” so much that you think everyone is trying to pinpoint your personal politics. So after a mile of walking and finding yet another water fountain that didn’t work, we decided to go on an actual dirt trail that was parallel to the Silver Comet.

This area turned out to be a local dumping ground. Every few hundred feet there were some old couches, a kid’s play set, and an endless onslaught of empty barrels.

Then we found this…

lot2

Now when we found this sign, it was encrusted in a nice sized mud hill with about a third of it submerged in the Georgia clay. Stop symbol. Arrow. No words. It resembled the perfect illiterate version of the words, “Please Stop Here!” So naturally, we kicked off the remaining mud, lifted it out, and put it in the back of the old Benz.

It fit perfectly. After finding finding a working water fountain near the fire station, we went off to the nearby Home Depot to straighten out that little bottom arrow portion.

We may as well have been pissing in the wind. If the nearby outdoor places were packed, the Home Depot was swarmed. After about 10 minutes of finding nobody, I took it upon myself to use a nearby clamp to get the bottom portion straightened out a bit. After a few Herculean tight turns, the sign was a bit more straight, but not much.

So the two of us went off to the lot and that’s where the proverbial dim bulb went off in my big head, “Why don’t you use the car to flatten that portion of the sign out?” So that’s what we did. My son kept his future Eagle Scout eyes glued to the lower portion of the sign as I positioned the rear right tire of the Mercedes just so on the flat ground. The first try was a little off. The second try… perfect.

I was planning on letting the thing set overnight and then coming back this afternoon when, lo and behold, a large Latino family came by wanting to test drive some minivans. Interest in minivans in north Georgia is about akin to interest in the New York Mets in the same locale. I had three of them sitting at my lot since late 2013. So naturally, I gave them all the time they needed.

15 minutes turned into 30 minutes, which eventually turned into an hour’s worth of combined testing on all three vehicles. They asked questions in English, I answered in Spanish, and pretty soon the combined Spanglish resulted in a nice late afternoon conversation. It turned out they had bought a minivan from me three years ago, and although I didn’t remember them, I did remember the vehicle because when it comes to used minivans these days, nobody willingly buys the damn things anymore.

My son came up to me and reminded me about the sign, and I asked them for a bit of help. So we used some leftover wire and hung the thing up.

lot5

No worries. All was good until I came home and shared my recent find on Facebook.

One Guy – “That’s government property!”

Me – “That’s abandoned government property…”

Some Guy Named Frank – “Let me tell you about the time when I used a traffic sign like that to hide some rust and a few joints in an old MG. I nearly got sentenced to five years in prison for said deeds!”

One Other Guy Not Named Frank – “Screw the sign… tell me about the 300D.”

Yet Another Guy – “Abandoned or not, it’s still government property. You don’t know who abandoned it. Basically, it could be possession of stolen property.”

Me – “Given that the government sells these things as scrap metal to the general public, I am not too concerned about it.”

Fellow Writer – “… and a mere 24 hours later, he found himself in Guantanamo Bay, rocking the electric waterboard.

“Where is our Steven?” asked the editors of TTAC, Yahoo and R&T, “for he owes us many a story”.

“There never was a Steven”, said the man from the Georgia Dept of Highway Signs and Counterterrorism, as he squared his mirrored Raybans and gestured toward the ceiling with his Glock. “Ya feel me?”

lot7

The ex-urbs of the Atlanta happened to have been neutron bombed during the sub-prime crisis. So to be blunt, a lot of signs, poles and concrete sewer fittings are still out there at this point. But did I make a mistake? Will recycling a piece of metal for a useful purpose land me into Georgia’s  version of Sing-Sing prison?

I would be willing to take the risk… if it weren’t for the fact that most of my customers are still ignoring the sign. My next plan is to buy up a line of deer heads and put them up on the fence with the words, “Park Here Deers!”

Any other ideas?

 

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Hammer Time: Don’t Buy With Your Eyes! http://www.thetruthaboutcars.com/2014/03/hammer-time-dont-buy-with-your-eyes/ http://www.thetruthaboutcars.com/2014/03/hammer-time-dont-buy-with-your-eyes/#comments Wed, 26 Mar 2014 18:04:26 +0000 http://www.thetruthaboutcars.com/?p=781577 People buy with their eyes in this business. Always have and always will. I don’t care if you are a pseudo-sophisticated Yuppie wanna-be who thinks that Subaru is a value brand, (It’s not. They cater to the Costco crowd.) Or an impoverished mother of five who is taking her $6000 tax check and blowing it […]

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Click here to view the embedded video.

People buy with their eyes in this business. Always have and always will.

I don’t care if you are a pseudo-sophisticated Yuppie wanna-be who thinks that Subaru is a value brand, (It’s not. They cater to the Costco crowd.) Or an impoverished mother of five who is taking her $6000 tax check and blowing it on the Cadillac of minivans.

Image completely rules this business. New or used. As much as I would love to sell old sturdy wagons and functional minivans that will last for another seven years, my customers want the modern-day crossover. The SUV that hypothetically gets great mileage if you read the window sticker upside down. A compact with an impossible to find leather interior, and of course, the upscale ride with the nice big wheels.

The first test of whether a car sells in this business comes down to a simple question.

“How much is it worth?”

That question is not answered by the window sticker. It’s figured out by the eyes, the hands, the ears, and all the senses within your body when you touch, see, and even smell that vehicle.

New or old? Doesn’t matter.

The reason why the Mazda 2 and the Honda Insight haven’t sold a lick, while the Mazda 3 and the Honda Accord are still wildly popular, is because those first two cars have completely flunked that test for most of the buying public.

Doors, steering wheels, and dashboards. Most cars are psychologically sold within the first twenty seconds of sitting in a car, looking at your surroundings, taking it all in, and turning the key. Your facial expressions and implicit behaviors tell the whole story. If you sit in a vehicle that feels and looks cheap, it doesn’t sell. Not enough sound insulation? Buttons and knobs that have the tactile qualities of a dog’s rubber-bone chew toy? Those are the things that quickly submarine the sales potential of a car well before the dealer tries to four-square you into a higher price.

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The same dynamics take place on the wholesale level. At the wholesale auto auctions, where your trade-in’s, off-lease and repossessed vehicles get sold to the highest bidder, it’s the look of a vehicle that creates the market demand.

You want a premium price at an auction? It has to look clean and front line ready. Interiors need to be cleaned out and deodorized. The wheels need to be shiny, and there is one more missing ingredient that 99% of my fellow dealers miss when they come to sell at the sales.

Click here to view the embedded video.

A well-paid auctioneer and ringman.

You want the premium price? Tip them well. The guy who uses  his powers of persuasion to buy with a microphone, and the guy on the floor with him, are no different than the salespeople on the showroom floor trying to shuck off leftover Cruzes and Silverados.

Click here to view the embedded video.

Incentives create sales. And unlike the commission based salesman at the new car stores, auctioneers and ringmen get paid a flat fee by the auction. Which means that when I come on the block and sell my inventory I always tip them.

Typically I give $20 to each one if it’s a smaller run of ten or fewer vehicles. Larger runs get $50 and a particularly successful one gets $100. As an auto auctioneer and ringman in my earlier days, I lived the importance of getting good tips and back in the late 90’s and early-2000’s, your tips often exceeded what the auctions paid you. These days tipping is scarce, which frankly gives me even more incentive to do it.

I had a small run of six cars two Tuesdays ago which was a rolling representation of how important clean cars and well-paid staff are to any organization.

99CV

A 1999 plain-jane beige Lincoln town Car with 211,000 miles was bought for all of $425 late last year from a title pawn. This was crusher money (the market price for junkyard bound vehicles) and with the interior driver’s door panel smashed to hell and five months of sitting around with dirt and debris, it wasn’t worth much of anything to the pawn company. The body was perfect. However long-term neglect can make even the nicest of vehicles looking like junkyard relics.

I took my Snap-On battery box, started it up, and bought it. From there I hired a detailer who works for Carmax $70 to do a good thorough clean-up on the Crown Vic, topped off the fluids, and had a driver take it to the auction for $25.

It sold for $1800 less the $125 auction fee. Two guys who never bothered to open the door on this thing got into a dogfight and the auction staff, composed of a World Champion ringman and a sharp competitive bid-caller, squeezed every single penny possible from that thing.

Most of my other vehicles fell into the same pattern. Even my mistakes from 2013. A 2004 Pontiac Grand Prix GTP that was bought for $3200 and tripped a transmission code only after I had driven it for a week sold for $3800. A Kermit-the-frog green Rodeo with a knocking engine that blew up after the absent minded customer forgot to put the oil cap back on it went for $900. A Y2K red VW Golf four door with low miles, but a tranny that couldn’t stay in overdrive had been bought for $2155. Another mistake that does happen in the course of buying lots of vehicles where, in essence, you are sometimes playing the percentages between good cars and bad cars. I made a few hundred selling it that day. If I hadn’t tipped my auctioneer and ringman I have no doubt it would have sold for at least $500 less.

ls400

What didn’t sell? A 94′ Lexus LS400 that I had bought for $900 plus a $120 auction fee way back in late 2012. That one had been bought without a serpentine belt and to be frank, I got lucky on it. It has been financed twice and even though I did not want it back, the brief owners had employment issues. Not even four months of grace each time could keep this vehicle away from the lot. So I drive it to and fro these days, and since I rarely have time to clean it, I was expecting a low price at the sale.

I wasn’t disappointed.

I no-saled it with a bid price of $1450. Much less than the crappy Lincoln. Enough to break even on a pure purchase basis. But not enough to pay for the set of new tires I bought for it that usually go for $600 a pop, and the Lexus still has plenty of life left. A clean one at this time of year will usually sell wholesale for at least $2000.

That’s how the cookie crumbles in the car business. Homework and good work lead to the higher returns. But what about you? Has there been a vehicle you bought with your eyes instead of your head? How were you able to finally get out of that never-ending expense?

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Toyota Dominates Consumer Reports Used Car Recommendations http://www.thetruthaboutcars.com/2014/03/toyota-dominates-consumer-reports-used-car-recommendations/ http://www.thetruthaboutcars.com/2014/03/toyota-dominates-consumer-reports-used-car-recommendations/#comments Tue, 18 Mar 2014 13:07:02 +0000 http://www.thetruthaboutcars.com/?p=774913 Several Toyota models dominated this year’s Consumer Reports list of used car recommendations, with 11 out of 28 overall belonging to the automaker’s Scion, Lexus and namesake brands. Automotive News reports the 2011-2012 Camry and 2010-2011 Camry Hybrid among the best sedans between $15,000 and $20,000, while the 2006-2007 Lexus RX shares the same pricing […]

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2014 Toyota Camry

Several Toyota models dominated this year’s Consumer Reports list of used car recommendations, with 11 out of 28 overall belonging to the automaker’s Scion, Lexus and namesake brands.

Automotive News reports the 2011-2012 Camry and 2010-2011 Camry Hybrid among the best sedans between $15,000 and $20,000, while the 2006-2007 Lexus RX shares the same pricing space with the non-turbo 2009-2010 Subaru Forester. The 2004-2007 Prius, 2004-2006 Scion xB and the Pontiac Vibe/Toyota Matrix twins all took the $10,000 or less small car category, while the 2008-2009 Highlander Hybrid, 2011 Avalon and 2006 Lexus LS took their respective segment spots for vehicles between $20,000 and $25,000.

Overall, all but three of the 28 recommended used cars were made in Japan or South Korea; the 2011-2012 Lincoln MKZ, 2012 Ford Fusion Hybrid and the aforementioned Pontiac Vibe were the only domestics to make the recommendation list.

Consumer Reports also unveiled their “worst of the worst” used car picks, where all but six were made by the Detroit Three, including the Chevrolet Cruze 1.8-liter and Impala, the Chrysler/Dodge trio of minivans, and the orphaned Saturn Outlook and Relay. BMW, Mercedes-Benz, Volkswagen and MINI make up the remainder of the 21 picks to avoid.

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Should You Sell Your Car At Carmax? http://www.thetruthaboutcars.com/2014/03/should-you-sell-your-car-at-carmax/ http://www.thetruthaboutcars.com/2014/03/should-you-sell-your-car-at-carmax/#comments Fri, 07 Mar 2014 10:00:14 +0000 http://www.thetruthaboutcars.com/?p=766585 100,000 miles? 200,000 miles? 300,000 miles? Everyone has a certain point with their daily driver when they would rather see money back in their pocket, instead of seeing more money fall out of their pocket. Time marches on. That old clunker loses it’s endearing qualities and then, what do you do? Well, the answer depends […]

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carmax

100,000 miles?

200,000 miles?

300,000 miles?

Everyone has a certain point with their daily driver when they would rather see money back in their pocket, instead of seeing more money fall out of their pocket.

Time marches on. That old clunker loses it’s endearing qualities and then, what do you do?

Well, the answer depends a lot on what type of vehicle you’re trying to sell… which is why I’m introducing Carmax’s wholesale operations into this write-up.

carmaxa

A lot of us are already familiar with Carmax’s retail operation.

No-haggle pricing. No hard sells or bait-and-switch tactics. The foundation for what made Saturn such a successful new car brand back in the 1990’s has been refined, improved and eclipsed by Carmax.

Like em’ or hate em’, Carmax is now the official used car Goliath of the auto industry.

carmax2

This article from Automotive News does a great job of highlighting the retail side of their success. Carmax is now twice the size of second-place Autonation, and larger than the third, fourth, and fifth place automotive retailers combined. If Carmax manages to stay on track with a forecasted 500,000 units sold for 2014, and maintains their $2,150 in net profit per unit, they will likely eclipse over a billion dollars in profits… just with their retail operations.

That first billion is the one everyone here is already familiar with. However it’s the other side of their business, the wholesale side, that’s proven to be the more consistent money-maker during good times and bad.

This is how it works.

carmax3

You are tired of your car. More times than not, it has some type of problem that is either expensive or elusive. You have probably spent a fair penny trying to solve that issue, and even if you succeeded, you are weary of having to deal with yet another one down the road.

Enter Carmax. Have you ever noticed how much money Carmax spends on radio advertising? That little 30 second spiel about bringing your car in and getting treated right is more than just a hokey way of trying to get you in their door.

It’s arbitrage, with a churn that now numbers close to 7,000 vehicles.

Every… single.. week…

carmax4

Carmax inspects your vehicle. Appraises it’s value. Successfully buys it (or at least plants the seed for further business), and then they does something that is unique to automotive retailers.

They have weekly auctions for all of these vehicles. Wholesale auctions frequented by dealers who sometimes travel long distances to buy the very same cars that you are tired of driving.

carmax5

On average, a Carmax auction gets more eyeballs per vehicle basis anyone else. An auction with 100 vehicles will often have more than 100 dealers who are ready to bid up and buy all those vehicles.

It’s a free market, and because Carmax eliminates uncertainty by disclosing major defects to this dealer audience, they get a premium return for much of what they sell.

If the engine or transmission has mechanical issues. If there is frame damage or a salvage title, Carmax will disclose that issue in writing to all dealers before the sale.

carmax6

Even if it’s a $500 vehicle, you can dispute the vehicle if there was a major defect that wasn’t disclosed. I’ve done it successfully in the past many times and so have thousands of dealers who attend their sales. No system is perfect. But Carmax’s selling policy is designed to eliminate those uncertainties and provide disclosure with both the high end car, and the beater car.

That’s where you, the public, comes into the mix. Because Carmax can get the premium return along with a seller fee of about $165 for each vehicle sold, Carmax can pay more for certain cars than other dealers.

What types? In my experiences, Carmax tends to offer a solid edge to consumers in three distinct areas.

1) The unpopular car with expensive mechanical issues.

2) The Craigslist nightmare car.

3) The “I need money right now!” car.

carmax7

You may notice that these are the first two types are cars that few public individuals want to buy in the first place. That five year old Chevy Aveo with a bad automatic transmission, and a 25 year old Honda that looks like it got into a fight and lost, will have one thing in common.

They will both be lowballed by the general public. Once you put that Aveo online for $3000, someone will offer you $1500 over the phone and then not show up.

carmax7

That 1990 Honda Accord which has been driven 356,168 miles? Someone’s kid or an aspiring scammer is going to light up your cell phone with a never-ending torrent of stupid pointless questions.

“Is your car a diesel?” says the guy who doesn’t understand that the letters g-a-s do not equate to d-i-e-s-e-l.

“Is there anything wrong with it?” “Is it an automatic?” “What’s the least you’ll take for it?” “Can you drive it to my place?” “Um… Give me your address!”

It’s this moron brigade that helps Carmax make hundreds of millions of dollars. By giving you the opportunity to not deal with them, and giving dealers the opportunity to capitalize on your automotive misery.

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There’s also a more lucrative side for those dealers that visit these auctions. That Aveo I mentioned earlier? It can be bought for $2300. Then it will be fixed with a cheap tranny found through car-part.com, and then financed at $500 down and $260 a month for 36 months.

The sub-prime side of the car market can help a dealer more than double his money over the course of a few years. Not risk-free mind you, but the Carmax auctions provide them with a golden opportunity to buy 20 or 30 low-priced vehicles a week that actually come with mechanical disclosures.

Once you know what you’re buying and have the means to it marketable,  your risk of failure goes down substantially. This, along with the push of immediate competition, motivates dealers to pay more money for your impaired vehicle.

Nobody else does this when it comes to cheap older cars.

The creation of a free market with thousands of used vehicles, and fair disclosures, will likely net Carmax well over $300 million in profits by the end of this fiscal year.

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The average unit garners a little less than $900 in profit. Subtract Carmax’s seller fee of about $200, and you’re looking at only about a $700 spread on average between what Carmax will offer you, and what a large free market will pay for your vehicle.

Is that a better return than you will find on Craigslist, Autotrader, or a nearby car dealer? In some cases, without a doubt. The greater the uncertainty about the value of a product, the less an unknowledgeable person (or greedy person) will offer for it.

Personally, I would test out all of these avenues. If Carmax offers the best price, take it.

That is unless you live in northwest Georgia. In which case the address to my dealership is…

 

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Boom, Bust, And The New Car Lust http://www.thetruthaboutcars.com/2014/02/boom-bust-and-the-new-car-lust/ http://www.thetruthaboutcars.com/2014/02/boom-bust-and-the-new-car-lust/#comments Tue, 25 Feb 2014 13:00:31 +0000 http://www.thetruthaboutcars.com/?p=753561 6:30 P.M. and three more cars just pulled up to my place… on a Monday… Have I just bought a McDonald’s franchise? Not quite. This is the start of what we call “tax season” in the used car business. A time when tens of millions of Americans who live paycheck to paycheck get a nice […]

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6:30 P.M. and three more cars just pulled up to my place… on a Monday…

Have I just bought a McDonald’s franchise? Not quite. This is the start of what we call “tax season” in the used car business.

A time when tens of millions of Americans who live paycheck to paycheck get a nice four figure lump sum from Uncle Sam and his favorite sub-prime debt dealers.

This money will typically be gone within 72 hours. Cars, electronics, and (cough! cough!) indebted personal obligations will be re-distributed to impersonate economic growth.

None of this matters for me right now because my brand new customers, with tax refunds in hand, are looking at three older cars.

The respective ages of these low money down rides?

17.. a red 1997 Honda Civic EX with 130k miles.

18… a gold 1996 Nissan Sentra with 135k miles.

And 19, a white 1995 Pontiac Bonneville SSE with 160k miles.

Two year notes for three cars that are old enough to have been driven daily when I was young.

Should all this age scare me? No. Not at all. I’ve financed hundreds of teenage and twenty-something cars over the last several years, and with the average age of a vehicle in the United States slowly creeping towards the twelve year mark, I’m not even sweating it anymore.

So long as I find the right owners, these cars don’t break. At least not in a terminal sense.

The ones who should be sweating it are the manufacturers. Why? Because they overproduced at a torrid pace from the early-2000’s to late 08′, and now that many of these defunct brands and models are headed towards their middle-age, they’re getting depreciated to kingdom come.

Yet they still run fine. Even until recent times this longevity had not been the usual case.

Ten years ago the average old jalopy on the road was usually a rolling piece of junk that drank gas, smoked oil, and hung out with the bad boys. I saw these cars all days long at the auctions and sold  tens of thousands of them as a ringman, auctioneer, and remarketing manager for an auto finance company.  The wholesale auctions were full of em’ back then, and I still remember getting headaches from all the carbon monoxide and other deadly substances that permeated the air. When it came to older cars, there were far too few manufacturers of quality vehicles. Older Benzes, Toyotas and Hondas were able to handle the long haul. American trucks and gas guzzling body on frame land yachts were pretty good as well. Those were the sweet spots for those wanting car owners who couldn’t do it themselves. Everything else offered a lot more misses than hits.

Now, the average old car… is the family car. The extra car that rarely gets driven. Or even your own car.

It was more than likely designed at a time when lean manufacturing had already become predominant, OBDII diagnostics had become a universal standard, and fuel injection had become a given. Even the recent defunct brands. The Pontiacs, Oldsmobiles, and Mercurys of today are light years ahead of the malaise era inspired, quantity driven metal of yore that rightfully deserved to be recycled into Chinese washing machines.

Your current daily driver, old it may be,  is still going to last you for a while. And when it does decide to spit out a part, chances are you can find a cheap replacement for it online or at an auto recycling center. The labor to replace it may no longer be cheap, and your older ride may not have the same tolerance for neglect and abuse than it did when new. But if you drive like everyone else on the road, chances are it’s going to last you well past 200,000 miles, or even 15+ years if you live in a non-rust climate.

We can go on about defunct brands and models that are now overpopulating the used car market thanks to the corporate accounting games of not too long ago. We can even venture forth to the less political causes of what will likely become a golden era for cheap transportation if you keep your eyes sharp on good product. This is in large part thanks to the research engineering advances of the last 15 years, and the amazing convergence of suppliers, standards and even platforms within our industry.

But there is one factor that seems to trump all the others in today’s used car market. Money.

In my world that is running a car dealership, the new car is now matching the eight year old used car when it comes to the monthly payment.

How? Here’s how.

It’s the difference between a two year note for an $8500 eight year old used car at 14%, and an eight year note on a $30,000 new car at 5.9%. The financial difference between those two cars, pre-tax, tag, and bogus add-on fees, is $408.11 a month for the used car, and $392.78 for the new car. You read that right. The monthly payment is now often less for the average new car than it is for the average used car. A lot of consumers who are already used to having a car payment don’t mind paying for a longer period if it means getting a newer vehicle.

Now that automakers and major banks are delving deeper into sub-prime loans, even deeper than they did back in late 2007, used cars are becoming increasingly unmarketable.

The millions of  orphaned brands and models with little to no marketing cache are going to help this process advance far faster than you may realize. In fact, many of the largest used car retailers will no longer buy any orphaned brands because they sit at the lot for far longer periods of time than ever before. A lot of declining brands such as Volvo, Mitsubishi and Lincoln are also on that same walking plank of consumer obscurity that leads to an ocean’s worth of cheap inventory.

No overproduced, over-leased or unpopular used car can compete on a level playing field with a new car equivalent that has the better brand name on the front of it. That is unless you’re one one of those customers willing to pay cash one time for an older product.

If that cash customer is you, these next few years will offer a far better bang for the buck when it comes to buying used cars.  Once the bad decisions of 2007 and 2009 are removed from the credit histories of consumers who had bad luck back in the day, you will see many of these customers ditch their old rides and buy whatever new car they can find which offers a lower payment, a nicer ride, and better cash flow. At least for right now.

I predict that a lot of these cars will contain technologies that will be far too expensive to fix and repair in the coming years. However, by then I’m sure that the manufacturers will be offering ultra-high mileage, aluminum bodied works of wonder with advanced CVT transmissions and software that will enable electric motors to become a worthy alternative to the internal combustion engine.

Meanwhile, someone out there will still be driving an old Honda Insight. New car smell be damned.

 

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Hammer Time: Hey Taxi! http://www.thetruthaboutcars.com/2014/02/hammer-time-hey-taxi/ http://www.thetruthaboutcars.com/2014/02/hammer-time-hey-taxi/#comments Tue, 18 Feb 2014 12:00:56 +0000 http://www.thetruthaboutcars.com/?p=743489 Georgia is now seriously weighing in House Bill 907 which opponents have dubbed the, “Taxi Monopoly Protection Act.” It would effectively outlaw ride sharing services like Uber and Lyft. While also making cab companies victims of the usurious fees that they are required to pay to remain in business. My solution to all this would […]

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Georgia is now seriously weighing in House Bill 907 which opponents have dubbed the, “Taxi Monopoly Protection Act.”

It would effectively outlaw ride sharing services like Uber and Lyft. While also making cab companies victims of the usurious fees that they are required to pay to remain in business.

My solution to all this would be politically tone deaf and probably DOA in GA. My special interest is simply a personal one. I want to see better ideas work for the general public.

So here’s my deep dive into the rabbit hole that is government balancing one man’s freedom with another man’s fears.

 

The nuts and bolts of using your own personal property to transport other folks shouldn’t take much. If I were king governor of Georgia, this would be the way I would do it.

1) Don’t require taxi cab companies to pay for medallions and other mandated fees that serve no purpose other than inflicting financial harm on these businesses.

2) Do require that anyone who wishes to operate a taxi business (which Lyft and Uber are in practice) pay the insurance required to operate those businesses. If these companies want to pay for it themselves, that’s fine as well. But I believe this should be where the level ground should exist, and your insurance company should automatically be notified if you decide to operate this type of business.

3) Anyone who wants to sign up to be a taxi driver should have their license automatically run through the DDS web site every time their services are used to ensure that they still have a valid license. The way it is structured now, drivers can have their history gone through one time, and are okay thereafter.

This is the type of solution that makes no one 100% happy.But yet, it represents the fact that we need to let the government become an enabler of free enterprise. Instead of a perpetual conduit for special interests. It also represents the fact that there are some minor sticky issues that would need to be ironed out should this remote possibility ever come to pass.

The first has to do with handicapped folks.

It cost a lot more money to convert a new vehicle into a handicap accessible one. Since the costs of serving this population is far higher (to the tune of several thousands of dollars per vehicle), should handicapped customers pay more for these transportation services? Or should there be some sort of assistance, somewhere, to subsidize it?

The second issue has to do with vehicle inspections.

Should they exist? And if so, who should pay for it?

The quality of transport requires more than cheapness and minimal standards. Precious few of you are willing to spend a lot of money being transported in a 22 year old Corolla with no a/c (in Georgia), bald tires, and the smell of body odor permeating your nasal passages. Should owner reviews and corporate follow-up handle these issues? Or should there be some type of government standards that prevent the public from bad service?

Finally, what about the children?

Should there be certain child seats that must be required usage on these vehicles? I am sometimes tempted to go back to a 1970’s styled, “Put the kids in the back of the wagon!”. However the young human body is especially fragile, and I think that either the parent or the company should provide kids with adequate protection. So pick one, pick none,  or pick both.

Adults with needs, cars with needs, and kids with needs. The current bill sponsored by 5 Republicans and 1 Democrat doesn’t even pretend to serve their interests. But let’s say we live in a fictional world where the special interests on both sides are mere midgets compared with the general welfare and collective powers of the electorate. Let’s be kings instead of pawns today and try to solve the world’s problems one used car ride at a time.

How would you solve it?

 

 

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New or Used? : Should I Salvage My Shady Tree? http://www.thetruthaboutcars.com/2014/02/new-or-used-should-i-salvage-my-shady-tree/ http://www.thetruthaboutcars.com/2014/02/new-or-used-should-i-salvage-my-shady-tree/#comments Wed, 12 Feb 2014 20:01:15 +0000 http://www.thetruthaboutcars.com/?p=740305   When I peruse the websites of some of my local yards, it seems like some of these cars have very little damage but some insurance adjuster has written them off based on whatever metric the company uses. I’m an experienced shadetree mechanic and it seems like getting a 3-4 year old car for 30% […]

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When I peruse the websites of some of my local yards, it seems like some of these cars have very little damage but some insurance adjuster has written them off based on whatever metric the company uses.

I’m an experienced shadetree mechanic and it seems like getting a 3-4 year old car for 30% of its original MSRP would be a screaming deal, and since warranty coverage is no longer an issue, it comes down to diminished value on the salvage title. I tend to keep my cars for 8-10 years so who cares.

Here’s where my doubts creep in.

If it was such a great idea, I would have surely read more about it. In the case of this one nearby yard,  they have a huge collision repair facility. So why aren’t they repairing and flipping these cars? Googling doesn’t provide a whole lot on the pros and cons, just on the procedural aspects.

Any experience or stories ?

Steve Says:

Plenty of them.

This past storm through Atlanta recently totaled two of my financed vehicles, and late last year, I had two others that succumbed to the laws of physics.

The best way I can answer your answer is by working backwards by starting with older salvage vehicles first.

If you are looking for the best deal on a salvage vehicle in terms of daily transportation, it’s going to typically be the older, unloved, unpopular vehicle that merely has cosmetic damage.

A 10 year old Saturn with the rear bumper bashed in.

The older SAAB that was well kept, but was hit in that precise point on the front quarter that would require the removal and repainting of the hood, front bumper, and quarter panel if it were brought up to spec.

There are a lot of used cars that are totaled which fit this description. Minivans that don’t have good leather seats or automatic doors. Sitckshifts in non-sporty vehicles. Unloved older SUV’s, orphaned brands, and of course, station wagons.

The exact same types of vehicles that are unpopular and obscure to the non-enthusiast, are those that can provide the best bang for the buck for the shadetree frugalist who wants to explorer the salvage side of the business.

You have to still do all the homework you regularly do when buying a clean title vehicle. It is essential to go and inspect the vehicle in person and figure out the history. Even with doing all that, the buyer fees will negate much of the advantage you supposedly may have.

Plus, there is that one annoying fact with salvage vehicles. They can often have hidden surprises.

If you are serious about doing this, make sure you have easy access to a spare inoperable car that can be used as a reasonably cheap source for parts.

As for the late model vehicle? Don’t even try. The most popular ones are often shipped overseas where the local markets offer a far greater tolerance for substandard repairs, and where the labor rates are a small fraction of those in the United States.

The price of used cars is also far higher in the majority of countries outside the United States. We are known as a “high-content” market which means that many models that appear to have low to mid-level features are considered loaded vehicles in those overseas markets. The exporters can often buy higher than most others, with a few experienced rebuilders who have the resources and know-how to turn over higher end inventory.

My advice to you is to start small. Heck, you can take two unpopular Craigslist vehicles and make them into one with parts to spare. Or just visit a nearby used car dealership or title pawn company and tell them that you would be interested in buying their inop vehicles.

Specialize in a type of car and who knows? You may find yourself profiting from experience. Just don’t expect a $2000 lick every time you sell a salvage car. The market demand will likely be limited to hardcore enthusiasts and frugalists.

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Crapwagon Outtake: The Wine Dark TSX http://www.thetruthaboutcars.com/2014/02/crapwagon-outtake-the-wine-dark-tsx/ http://www.thetruthaboutcars.com/2014/02/crapwagon-outtake-the-wine-dark-tsx/#comments Fri, 07 Feb 2014 14:00:11 +0000 http://www.thetruthaboutcars.com/?p=731970 The best part about working at TTAC has very little to do with the constant press car access, the barely-disguised graft known as “new car launches” or having various varieties of invective spewed at you by tens of readers each day. No, the real fringe benefit is that you are paid to spend a fair amount of […]

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The best part about working at TTAC has very little to do with the constant press car access, the barely-disguised graft known as “new car launches” or having various varieties of invective spewed at you by tens of readers each day. No, the real fringe benefit is that you are paid to spend a fair amount of your waking hours reading and researching about cars, and that includes browsing the online classifieds for strange and obscure cars.

I came across this gem during a break in a search for some oddbals to post on our forum’s Used Car section. I really like the TSX. It’s not the fastest, or the sharpest handling car money can buy. It’s certainly not the most prestigious, and it won’t impress the superficial types. But it just feels right, in a way that the ILX 2.4 (a very similar car on paper) does not. The fact that it’s an Acura is also re-assuring. This is the kind of car that you can hang on to for 15 years, safe in the knowledge that if the stereo conks out, your car won’t be immobilized either (see: BMW E46).

There’s a surprising number of manual transmission TSXs available near me, but this one jumped out due to its price and condition (both great, as far as I can tell) and for how awful the color and specification are. Whoever ordered this is a real oddball. It’s painted in a ghastly shade of purple that could charitable be described as “Merlot-from-a-screw-top-bottle), while the cloth interior fabric is as bland as it gets. But it also has a 6-speed manual.

This kind of car is arguably the least desirable TSX, from a retail perspective. I know this because I first saw an ad for the car in September. At the time, I put aside any notions of buying another car, let alone getting rid of my Miata.

The latter option is still unpalatable, but Jack’s accident has made me revisit one of the reasons I sold my first Miata (much to my regret): there’s a good chance that a collision with a modern car, truck or SUV would be very ugly for myself and any passenger I was carrying. Almost as ugly as the TSX’s color.

Of course, I am not the typical retail used car buyer, and for an enthusiast like me, that salesman’s floorplanned folly is a great opportunity for me. Cloth seats and purple paint aside,  big draw is that it’s a relatively affordable and reliable car with a manual transmission that is fairly fun to drive. Of course, if anyone asks, it’s burgundy, thank you very much.

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Hammer Time: Opposites Detract http://www.thetruthaboutcars.com/2014/01/hammer-time-opposites-detract/ http://www.thetruthaboutcars.com/2014/01/hammer-time-opposites-detract/#comments Thu, 30 Jan 2014 13:00:56 +0000 http://www.thetruthaboutcars.com/?p=725978 There are some things that I am too damn old and open-minded to understand. Like hating a car brand. Especially in those common cases where folks haven’t been exposed to any level of vehicle derived hardships. Toyotas are boring. BMW’s are Yuppie-mobiles. Mercedes-Benzes are for snobs. On an on, through the lexicon of cliche and […]

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There are some things that I am too damn old and open-minded to understand.

Like hating a car brand. Especially in those common cases where folks haven’t been exposed to any level of vehicle derived hardships.

Toyotas are boring. BMW’s are Yuppie-mobiles. Mercedes-Benzes are for snobs. On an on, through the lexicon of cliche and generalizations comes the silliest of stereotypes. As much as I hate to see it, hear it, and read it, I’m resigned to the fact that there is always going to be some version of this nuttiness in our world.

But what if there was an easier means to defeat it? In fact, as many of you know, there already is. A force of human good that can outdo any scam artist or snake oil salesman.

The enthusiast forum.

Every time I buy a vehicle that I haven’t bought before at the auctions, I try to find out if there is an online enthusiast group that specializes in that particular model.

Some of the sites have surprised the heck out of me for their model based loyalty and goodwill.  Chevettes, Tauruses, Fieros, Old Supras. As for ye olde Volvos and Benzes, there seem to be at least six or so sites that have offered their good word to thousands of devout followers. Even if I have little love for the car, there are hundreds of enthusiasts out there that can make me fall in love with the literary works that come from owning one.

One of the reasons why I love visiting these enthusiast forums is that the main contributors are almost always genuinely interesting people. From concrete layers who are into eastern philosophies, to tried and true professional race car drivers with New Jerseyite vocabularies. There always seems to be a beautiful egalitarian streak of wanting to help other fellow car owners regardless of who they are, what they believe, and even how they behave.

In a business bent on the glorification and financing of everyday transportation, I find that desire to extend the ownership period, and keep people debt free, truly valuable. It functions as a vital counterweight to our society’s commercialized push towards all things new.

Enthusiast forums also contain a unique balance between the driving enthusiast and the car keeping frugalist. The active members of the community want fun, high quality and reasonable costs. More importantly, nearly all these sites espouse a hardcore philosophy that every vehicle should have the opportunity to be used to the fullest of it’s capabilities. Even the lousy lower end versions with trashy engines and interiors that make you feel like you’re stuck in some remote corner of a Tupperware party. That jalopy of a car may indeed drink, smoke and hang out with the bad boys. It may even be worth more dead than alive. But it still has a fighting chance for rehabilitation when it finds the right crowd of auto enthusiasts.

Within all these enthusiast forums though comes a unique problem.

Access to the information. Referencing these places, easily so that consumers can easily jump from reading about the car from an old review, which is where most car searches begin for the non-enthusiast, to truly knowing about that car in one fell swoop. There are thousands of enthusiast sites and yet, it’s hard for them to get the word out about specific issues and recommendations that can better help the mainstream used car buyer before he makes a fatal mistake.

Many of us have the common sense needed to do a thorough due diligence of the car we plan on buying and keeping because, we love cars. But for those who don’t love cars, it’s an inconvenience. Information begats more information and sadly enough, a lot of these used car buyers will be overexposed to the sausage makers of our business who have absolutely no handle on the long-term issues of these vehicles, and no incentive to report them. In fact, a lot of the reviews out there are just rehashed versions of new car reviews that were only written to move the metal.

So I’m debating about whether to expand the long-term reliability study so that it can incorporate links that will allow used car buyers to go directly from the objective data, to the subjective opinions and insights of long time owners and enthusiasts.

Two articles I have recently written at Yahoo!, here and here, have received a lot of emails from used car shoppers who are happy with the data, but want more help with their search. It’s one thing to say that a car is generally reliable, or unreliable, and quite another to show a car’s specific weaknesses so that small problems don’t become terminal in the long run.

The good news is that we should have enough information to break all this out by a model year and even a powertrain basis in the near future. A long lasting Beetle with a TDI engine and a 5-speed should be treated differently than a Beetle with a defect prone automatic transmission and a 1.8 Liter. So in time, as the number of data samples crosses the half-million to million mark, that specific data will be broken out as well.

In a perfect world, I would like to display specific threads at the enthusiast forums that will provide the personal experiences behind these distinctions.  Partially to support the findings as they evolve, and more importantly, to offer an easy way to introduce casual car owners to the value of certain well-run enthusiast forums.

Is it a good idea? Are there certain enthusiast forums that should be the holy books of knowledge for specific models? Any that should be avoided at all costs?

Feel free to mention them below. Oh, and this information in the long-term reliability study will be provided for free, forever. I am not going to pretend that this study will have all the answers or all the resources that can be harnessed on a wholesale level of this business. In fact, I plan on highlighting a lot of the limitations later this week at TTAC so that somebody, somewhere, may have the opportunity to make it better.

No system or study is perfect, which is one of the reasons why I asked for volunteers early on. We, even those who are experts, do not have all the answers. However there should always be free and public resources within the greater community that serve the common good, and this may serve as another good opportunity to pay it forward.

So as this study expands and more refined, I’m going to ask for help from those who have a genuine interest in building this. Statisticians, car nuts, concrete layers, all are welcome. With enough help from the enthusiast community, I think we can fill in the gap between those first owners that are featured by Consumer Reports, who typically keep a car for only about six years, and those later owners who will experience their own unique issues and levels of reliability as the vehicles age. Who knows? Maybe the study may save your progeny from an under-engineered CVT or an electric car that mysteriously loses it’s juice at the 100k mark.

All the best! And thanks for all you do. Feel free to leave your enthusiast forum recommendations below along with your thoughts and ideas.

 

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