Hammer Time: Survival of the Cheapest

I always wanted to control the Big Three. Not the once-mighty Detroit automakers but the three biggest personal expenses: house, car, and food. Thankfully, I got lucky with the house. Cars are my living. And food? My wife is an awe inspiring Zen master; I’m still working on spaghetti. But over the course of time our priorities have changed. Health care crept up. Then education. Now it’s saving for the volatile road of the near future. The world has changed, more folks are embracing frugality, and the world of cars reflects this seismic shock.

Small cars are now on the radar for most families. Honda Civics. Toyota Corollas. Even the domestic counterparts that were once taboo for many American families ten years ago are becoming the norm. Side airbags, standard ABS, high strength steel, and advanced safety structures have all made compact vehicles a viable option. Not to mention their S-I-Z-E. Even my wife now drives a Civic. A Civic!

There’s a paradigm shift taking place in automotive safety, and cost-conscious consumers know it. Listen to the sound of Americans complaining that new CAFE regs will put them in “penalty boxes.” Exactly. With electronic stability control, curtain airbags and crash avoidance technology trickling down over these next few years, it may not be long before compact cars overtake midsized cars for annual sales.

Still, remember: safety isn’t it. Like roominess, increasing safety simply lowers the barrier that economy-minded (not to mention first time) buyers must jump. Price is it. Running costs are it. For buyers or sellers of automobiles looking to minimize their number one expense—depreciation—I have one piece of advice. Watch those gas prices. As we learned during the last spike, when the cost of gas goes up, small isn’t beautiful. It’s drop-dead gorgeous.