By on February 9, 2010

Yesterday I sold a 1992 Lexus LS400. It was a well kept model with all the bells and whistles for it’s time. Hands-free cell phone. 250 horsepower V8. Sunroof, ABS, plenty of wood interior accents. For 195,000 miles it was a really great car. At the time it drove off I was speaking to a journalist from Reuters who was covering the Toyota recall. A mental somersault happened at that very moment. While I watched the Lexus pull away and kept on discussing the industry wide battle to contain costs, I looked at a few of my older cars. A 1993 Town & Country, still in great condition. A 1995 Cavalier that could easily go another eight to ten years. A 1997 Pontiac Sunfire Convertible that still drove like it was virtually new. Three cars. All of which were of seemingly dubious reputations for their time all had a good shot of hitting the big 20. I realized something in that very moment…

Only exports will guarantee the viability of the American auto industry. Consider this… not only is our market saturated, it has been bequeathed with unsustainable levels of financing, rental subsidies, and accounting games for over a decade. No matter what ‘clunker’ driven legislation is passed today we still will have way too many high quality used cars in today’s market that can be bought for $2,500 instead of $25,000. It’s great for the cash strapped consumer (and amen to that). But a barnacle bitch for the auto industry and their employees.

Consider the problem that Honda now has with their loyal and loving ‘repeat’ customers. The 2010 Accord may be far better than a 1999 Accord. But it doesn’t matter. That 11 year old model benefited from a time in history where long-term quality took a quantum leap. It still gets the job done extremely well and can still compete with it’s larger progeny when it comes to comfort and fuel economy.

Unfortunately for today’s car makers, a comparable and far cheaper product ends up being the product of choice in tough times. Security and ‘good enough’ are all most people really care about in a long and nasty recession. Tomorrow may be a cloud of fear and anxiety. But keeping things the same with cars and all other big ticket items helps quell this fear. Pork barrels have historically been the inducement du jour for this. Subsidize the consumer with cash and he or she will tilt their feelings toward the windmills of hope and greed. However, the only healthy way to get out of this fearful mindset is through knowledge and confidence. Simply put… you need freedom to innovate and find ‘the better way’. Consider for example all the innovations that made even the lowliest of vehicles… enduring.

The early to mid 1990’s were a paradigm shift in the auto industry. Suppliers became far fewer which greatly improved the automaker’s ability to design and manufacture the final product. Quality standards became exceptionally more strict. You had everything from Six Sigma to CAD/CAM Design to Moore’s law yielding an entirely new way to communicate and do business. The result was that nearly every competitor in the industry built better cars using better materials. Lean manufacturing, once a Japanese only assembly process, became the de-facto standard for all North American assembly plants. Everyone from the assembly line worker to the engineer had better tools and greater freedom to exercise them. The end result?

The fifteen year old car is no longer a clunker. It’s just another car. In fact portions of that car were likely designed to take on the best in the business at that time. The engine of a Chrysler LH sedan was designed to compete with the Acura Legend. Ford tried to take on the Toyota with the Taurus. Even Toyota learned a few things from the successes of a simple design like the Dodge Neon. Everybody took off the blinders and started cribbing each other’s notes and collectively spent over $100 billion+ on R&D. These industry-wide efforts resulted in windfall profits, high levels of employment in the United States, and vehicles that could endure longer than anyone cared to admit. The pursuit of knowledge was well invested and well rewarded.

Then the lazy time came. Why chase market share and spend billions on a new design when you could just buy someone else’s? The good ideas at Volvo were swallowed by Ford. BMW, Mercedes and VW all decided that foreign automakers could easily be acquired and taken over as subordinates. Even the Japanese embraced the conglomerate religion with Nissan joining Renault. Mazda joining Ford, and poor Mitsubishi finding itself between a hollowed out Chrysler and a hyper-arrogant and deceitful Mercedes management. Economies of scale and platform sharing became the standard which ended up being absolutely devastating in the long-term. The reason?

When everyone uses similar companies to engineer similar products in similar ways, it all becomes a sea of vanilla. Today’s cars all offer the same ‘cheats’ with oversized tires, plasticized interiors garnished with tin thin aluminum, and electronics that often have little to no point for most consumers (push button start, drive-by wire, manumatics that are never used.) The Camry, Sonata, Optima, Accord, and Malibu all drive like a Buick. Which is fine… except that you can buy a perfectly good 2000 Buick with about 100k on it for $3500. That car will also drive like a Buick for at least five more years if not longer.

So what does this mean? The American auto industry will only get out of this malaise of decontenting and copycatting by competing in markets and segments that now seem ‘foreign’. The ultra-cheap commuter is vital to the development of foreign markets. The idea of ‘luxury’ is still a nebulous one in most emerging markets. Competitors in the North American market will not be able to survive from profit alone here… because there’s very little profit to be had in America. We can only succeed by exploring new cultures and ideas… and putting the lazy ones that brought us here to rest. Disagree? Well consider how Hyundai became so successful in the United States. Think it over and as they say in the Green Mountains of northern Vermont, “Weigh it in.”

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73 Comments on “Hammer Time: Quality Work...”

  • avatar

    I enjoy reading your posts, Steven, but sometimes I think you and I live on different planets. Being cheap is one thing, but riding around in a 15 year-old Cavalier borders on masochistic.

    • 0 avatar

      I consider the guy driving around in a comfortable 3 series with a monthly payment eating 25% of his take-home pay to be the true masochist.

    • 0 avatar

      After a decade of driving cars under 6 years and 90K miles, I recently drove a 12 year old Merc Tracer for 18 months. After I serviced the front suspension, I was amazed how sufficient that car was for a commute.

  • avatar

    Mr. Lang:I was wondering how long it would be before the Cavalier trashing would begin……..

  • avatar

    Agreed. This is why I still keep (and fix) the 84 Volvo 760 Turbo. When it’s running great, it’s as good as any other mid-size RWD car out there and it costs me next to nothing. Our 07 Outback 2.5 is also an outstanding car, but I think that compared to an early Outback (95-99) there are some pieces that may not do as well in the long run as those early Outbacks have shown. And, I intend to pick one of those up when I finally dump the Volvo…
    I grew up with Ford, now I buy American made and whats suited for my needs.

    • 0 avatar

      Just don’t get into a head on, offset, crash with one of the newer 5 star rated small cars.

    • 0 avatar

      Yes, I’ve seen the video. However, with the driving I do, those types of accidents are highly unlikely and myself or my wife getting in an accident is unlikely as well. Still, it’s safer than any similiar-aged car, which is how it was advertised.

      My fear with small and very rigid (5-star) cars is that the energy has to be absorbed somewhere and that is usually the occupants.

    • 0 avatar

      LOL, seems u havent seen the video at all

      watch it again 5:40-7:00

      tom ford (the presenter) clearly states
      “the energy is channeled around the body frame
      rather than the occupants!”

      @Disaster, yep, the quote i mentioned was for the Modus,
      and what happens to the occupants of the Volvo can be seen
      in the 6:30-end minutes. not a happy ending.

    • 0 avatar

      …actually, much of the energy is channeled into the Volvo passenger compartment.

    • 0 avatar

      I’ve seen it before, like I said, but maybe not in it’s entirety or not all 6+ minutes of the video. I guess all my education in engineering and physics must have been wrong, energy will be absorbed in both vehicles.

      Now with that said, if one of you would like to buy me a car that’d be great. I pay cash, and my fleet is just fine. If you think I drive a Volvo because it’s “safe”, think again I drive it because my wife brought it to our marriage and it’s a fun car and cost very little to repair/maintain.Otherwise your comments are needless and off-base in this discussion. Go back to Autoblog.

  • avatar

    I really REALLY agree with getting “clunkers” off the road . . . but I can’t help but wonder where all of the old, beat-up, leak-in-the-muffler rustbuckets are getting their inspections, especially where emissions are standard . . . around the NY/CT border, 15-year old cars in good shape are sort of scarce.

    I wouldn’t call it a trashing . . . but Cavalier sort of makes me wince when I hear it as well. I’m going to be fair and say that it’s probably because the 1st owners don’t usually treat them well and we end up at . . . well where you see most Cavaliers.

    The only holes I see in this (really well written) entry is that there are a buttload of crappy, falling apart, need work cars on the market that less car savy people (myself at one time) end up buying and get a sour taste in their mouth for used.

    The second part of that is mechanics — I couldn’t give you the name of an honest one, which is another part of what I think is driving a lot of people to kia/hyundai . . .

    It was a nice read though Steve :)

  • avatar

    Mr. Lang hit the nail dead on the head here.

    If it is masochistic to drive around a decade-old Cavalier, I don’t want to know what I am for my choice of a winter daily driver – a 1986 Toyota-designed NUMMI-built Chevrolet Nova. But it starts every time, does its job well, works good int he snow and cost short money. Plus, there’s something to be said for a beater. My summer daily driver is an 1988 Corvette that “only” has 126k on it, but I’m determined to get to the 200k mark. Both have been well maintained and both are very reliable.

    It seems that my newer vehicles have more problems. I’ve been around and around with GM about stupid things breaking out of warranty on my dually pick-up – things like the fuel sending unit which is a well documented GM problem. Our Late Model Kia minivan was brought in a half dozen times for a clunk in the front end that two different dealers and a regional rep dismissed as “typical”. The late model Blazer I had suffered from the same fuel sending unit problem too…and don’t get me started on GM’s Dexcool nightmares.

  • avatar

    I’ve been “armchair predicting” that used car values will stabilize and the depreciation curve will lengthen. As new car sales slip and people realize that used cars hold up for longer, many of them will snap out of their 2-3-year replacement cycle mentality and hold onto their cars longer.

    This might be good for current owners of older cars (we have an 8 and a 12-year-old), but not so much for new car makers.

    I wonder how long “cheap, older cars” would last if EVERYONE took this advice. Pretty soon we’d no longer have much of a bargain in the used market, and new cars would look attractive again. The entire basis of the used car discount is how much less a buyer is willing to pay for the time, expense, and hassles of repairs…plus a little intangible urge for something new. Get rid of that intangible and it becomes more of a purely economic decision–and the deep discounts on older, reliable cars will start to disappear.

  • avatar

    Very thoughtful article. If a 1990s car in North America holds up so well, won’t a 1990s vehicle in Europe or Japan do the same? And over there, people generally take better care of their cars and drive them less. For example, Greece is a rolling car museum–if it wasn’t for big govt incentives to take pre-catalyst cars off the road, they’d still be there! This in the poorest ‘rich’ country, with no auto industry.

    So won’t foreign markets have the same abundance of good, cheap, used cars?

    Then there is the reality that the US has not traditionally exported. Chrysler exported, but in some foreign markets, they enjoy the same cachet as BMW has here. And they didn’t have foreign plants.

    The rules are skewed against the US, and our govt has never been good at playing the game. Perhaps the Congressional delegations from transplant states will tend to this, but don’t hold your breath. The biggest change would be to go from taxing income (work) to a National Sales Tax (at retail only) or even a Value Added Tax. Tax consumption, not production. But I can see the howls of protest from the lobbyists’s not fair to the poor, they’ll say.

    Of course, if a game-changing technology emanated from the US that other countries would benefit from, that would help. But don’t hold your breath–if there was money to be made there, someone would be doing it.

    Good piece–and good luck trying to export!


    • 0 avatar

      I also think 90s cars are better, but they’re so ‘optimized’ that major components have a target life of 120-150k. Once something expensive fails in your 97 Taurus/Accord/Cavalier, like a trans, is it worth fixing? The fuel injection or power windows..or AIR BAG might be next.

      Call me conspiratorial, but there’s some good logic to what I call planned mechanical obsolescence. And just for good measure, most cars from then have power windows–a relatively expensive item to repair.

      Today, Toyota is being skewered, rightly or wrongly, for a few cases of sudden acceleration. What about all the cases of unintentional air bag deployment? The bag goes off for no reason, you get in an accident as a result….This is a politically incorrect story, since the GOVT mandated them, and all the AUTOMAKERS install them, so we never hear about it. But it happens.

      So, if you’re a car maker, do you want legions of 10-15yr old cars that might potentially blow up for no reason? Probably not–better to have the trans fail and have the car junked..And if the power windows or seats or moonroof fail when they’re open, and they have to be fixed, or were fixed months before, that will help get the car off the road.

      Even a basic 1980s car, with a good body, and no air bags, power anything (except brakes), can be a money pit at 150k…every fix a Rabbit’s fuel injection and replace the clutch? But the GTI is an honest, fun car in a way new one’s are not…that’s how I rationalize keeping it in good running condition…

    • 0 avatar
      Jack Denver

      That Greece is both a rolling car museum and the poorest of the Western European countries is no paradox – if you are poor you can’t afford a new car. Countries w/ no domestic car industry tend to tax imports so new cars are expensive. In poor countries mechanic’s labor rates are lower so you can keep the car on the road longer. Plus snow is rare and the climate is dry – the Euro equivalent of a “California car”. BTW, Greece is also something of a lab for car brands – I saw brands on sale there I had never even HEARD of.

  • avatar

    I’ve been thinking this same thing myself lately. The inevitable result of better built cars is that they last longer, reducing the need to replace them. I literally just heard an NPR piece about how cash strapped police depts in Alabama are opting to refurbish Crown Vic patrol cars rather than replacing them. The main driver of the decision is no budget for new vehicles, but it’s made possible by the better build quality of the old cars. Without a buying public willing and able to spend money on new cars, the still “good enough” used cars of the last 10 years do just fine for most folks. Nothing but a crisis, like another major hike in gas prices or irrefutable proof of man-made climate change will motivate buyers to open their wallets for new vehicles that address the crisis in some way. The production overcapacity of western markets is going to be a major headache for automakers.

  • avatar

    Today’s automobiles are vastly superior to the cars of just a generation ago in almost every conceivable way.

    We all deride the blandness of the jellybean-styled appliances, but for every 100 boring cars sold in the 2000 decade there are at least 10 future classics. Or at least cars that’ll be tempting to quirk-seeking enthusiasts perusing Craigslist in 2015-2020, cheap and underappreciated.

    Off the top of my head: MR2, FJ, GTI, SHO, Transit, S2000, RX-8, A8, R-Class. All fantastic in their own little way for their own little reasons, all generally unheralded, ignored, or just unheard of. When they’re about 7-10 years old, there’s not a one of those you shouldn’t be able to snag for under $10,000.

    • 0 avatar

      Or at least cars that’ll be tempting to quirk-seeking enthusiasts perusing Craigslist in 2015-2020, cheap and underappreciated…
      Off the top of my head: MR2, FJ, GTI, SHO, Transit, S2000, RX-8, A8, R-Class. All fantastic in their own little way for their own little reasons…

      Yes, but… Some of the above performance animals require better than average attention and maintenance. Unless you know the provenance, I’d steer clear.

      Regarding Mr Lang’s piece, I’m skeptical there will be a major shift from new to used. Sure we won’t see domestic volumes of 17 million for a while. But people generally like new and will buy accordingly.

    • 0 avatar

      I challenge you to find a clean MR2 on Craigslist that has not been riced. Most have some awful combination of JDM Motor, Body Kit and Fart Cannon exhaust.

  • avatar

    Is that not an SC400 in the picture.

    My wife drove a 91 SC400 200K and it was still like new. She now drives a 95 SC400 with 100K and we are going for 300K. I drive a 91 Miata with some performance and handling modifications that I would not trade for anything newer, heavier or more complex. It is also more fun to drive than the two Corvettes I had, and it is reliable as a hammer.
    Our 2001 Mitsubishi looks good for at least 10 more years.

    What is wrong with using keys to start cars, a stick to shift manual transmissions, and gas pedals that are mechanically connected to the throttle? Cars are becoming way to complex and bloated.

    Look at the new pony (phony) cars. Way to big and heavy. I would spend my money on a modcon 69 Camaro over the cartoon-ish new Camaro any day.

  • avatar

    I don’t at all buy into the theory that massive amounts of new car buyers will change into used car buyers owing to the increased quality of the used cars.

    There is a big difference between the vast majority of typical new car buyers and used car buyers in general. Specifically new car buyers are not buyers of used 100k+ vehicles. New car buyers are keenly aware of the depreciation factor and choose to buy new cars in spite of it.

    The premise that new car buyers will in large numbers start buying used cars instead is IMO DOA.

  • avatar

    Only exports will guarantee the viability of the American auto industry.

    No disrespect meant, but I thought this was called “Mexico”?

  • avatar

    Interesting piece and I agree that used cars should be the penny pinching way to go. It is also better for the environment to keep a car on the road than to use all the energy and materials to make a new one.

    Having said that, the current reality is a bit different. Because the industry suffers from overcapacity, because auto companies are going out of business…because auto companies need volume to be sustainable, new cars have never been cheaper. These incredibly discounted new cars are competing quite well with 2-3 year old used models, which many people feel aren’t discounted enough.

    Couple that with a consumer that doesn’t know or care to change their oil…let alone a starter, and a paucity of good, honest mechanics and you have a recipe for continued growth in the new car market and a saturation in the used market…especially the cars that are nearing the end of their warranties (2-4 years old with 30-60K miles on them.)

    For example, we looked into buying our 2008 Volvo XC70 off lease. It had 23,000 miles on the ticker. The buyout was $28,000. The lease company wouldn’t wiggle. When I checked the used lots at the local Volvo dealership I saw similar prices yet they were selling brand new 2010 models for $32,000. We finally settled on a brand new 2009 Hyundai Genesis for $31,500….with a 5yr, 60k warranty and a 10yr, 100K powertrain warranty. On a cost per mile standpoint, the new cars were a better deal.

    These kind of deals exist all up and down the cost spectrum. Only have around $10K for a car? You could pick up a couple year old Cavalier, or a brand new Nissan Versa or Hyundai Accent. $15,000? You could get a 3 year old Honda Civic or a brand new Suzuki SX4 or Kia Forte. Moving up into the low 20-high teens, a new Hyundai Sonata will cost less than a couple year old Honda Accord.

    Like the author said, many cars are getting closer together in quality and lasting longer, so why not buy a Hyundai with 0 miles over a Honda with 50,000?

  • avatar

    I’m currently driving a 1990 Dodge Dynasty that I was planning to donate to a family friend who died suddenly last month. My 2006 Chevy HHR is in the repair shop courtesy of my Teenage daughter who rear-ended a Grand Marquis at a fairly high rate of speed (6,000 in damage, mostly in airbag replacement and related parts). While the amenities aren’t “modern” the thing starts and drives every day without fail. I have no idea how many miles are on it as the odometer unit failed ages ago and i haven’t worried about replacing it. The plastic bits are beginning to age and flake away, but that pushrod 3.3 V6 still hums, and the tranny hasn’t died yet. The seats are soft, the headliner is still glued to the roof and the ride is nice and plush. Took it on a 300 mile road trip friday night to help out a friend with a flat tire and no AAA. I think Steven is right, there’s no need to go out and buy a new car when there are thousands of cars like mine sitting around for less than a grand in my case, but easily under 5k if you want someting newer and nicer than what i’ve got. As parts for this thing are plentiful and cheap, i’m planning on “pimping it out” with some nice tires and wheels and a decent stereo and driving it till the body rusts away.

  • avatar

    Had an 80-year-old woman not attempted a left-turn into my ’91 Accord, it would still be running fine. It was an extremely durable machine, as long as its engine was attached to its body. It only had 135K miles, and would have gone at least another 100K or more – it just never gave me the feeling it wanted to give up, or ever would. I bought that car for $4000 cash I had saved waiting tables. I replaced it with a ’98 Civic with 50K miles for $6500 cash in 2007.

    I acquired both cars for considerably less than their original sticker prices, but they weren’t in considerably worse condition. I eschewed a new car, and so didn’t have to bear any depreciation. No, the cars weren’t new, but both were immaculate inside and out with clean records and relatively low mileage. Neither were “certified pre-owned” cars. If a granny ever totals my Civic, I will go through the same process: Craigslist, cheap, Honda, low mileage, cash. Just because it’s a few years old doesn’t mean it will fall apart. If it does, that’s just called bad luck. Millions of brand-new Toyota owners have bad luck right now; it isn’t their fault their pedals are faulty.

    The only reason I can see for buying a new car is because someone has a natural – and perfectly reasonable – aversion to used ones; otherwise, buying a brand new car at full or near-full price that loses considerable value as soon as it leaves the dealer lot has never made sense to me, and probably never will…even if I had enough money. I don’t have that aversion, and even if I did it simply wouldn’t be worth the extra thousands one pays for an untouched car. New cars are really only new for a day, then they’re used. But that’s one expensive day.

  • avatar
    blue adidas

    The mention of the Cavalier is interesting. My brother bought a 1997 Cavalier for his first car in 2001. It had all the goodies that a kid could want. It took him through college, to his first job, and on dates with his girlfriend/now-fiance. It was a noisy car with a crummy interior by today’s standards but it cost him nothing to own, aside from a new set of brakes, tires and passenger mirror that was knocked off. He recently got rid of it and bought a new Mazda 3, which he thinks is smarter looking and has a much better interior and better luxury option packages than a comparable Cobalt. He paid cash for the Mazda, which was partially made possible due to the years of free driving that the Cavi provided. The Cavalier is gone, but there is an appreciation for how solid it was. Compare that to an 80s Cavalier or Chevette, the 97 Cavalier was like night-and-day.

  • avatar

    one thing to note

    you make it sound like car manufacturers merged because it was some evil plan to sell the same car to more people

    the reality is many of these manufacturers would not have survived if they went it alone

    i also agree that exports are a possible way out but will americans be able to manufacture the cars to the tastes of a global audience?

    the old joke is that cadillac is the ‘world standard’

    does the world want cadillacs?

    • 0 avatar

      **you make it sound like car manufacturers merged because it was some evil plan to sell the same car to more people

      the reality is many of these manufacturers would not have survived if they went it alone

      This is just my opinion, but I think many of the mergers were initiated to enhance the ego of the CEO or satisfy an urge to be “the biggest automaker in the world”. It would be a tough argument to justify GM’s purchase of Saab, Ford’s purchase of Jaguar or VW’s purchase of Lamborghini/Bugatti/Bentley.

  • avatar

    I felt the same way about my 1997 Mazda-engineered Ford Escort Wagon, too bad it went to my ex-wife in the divorce and she’ll likely drive it into the ground quickly from lack of basic maintenance. I’m in a quandary about what to pick up for a commuter for a job change coming up. New but stripped down or used, large, and comfy? Especially when an old Buick like Lang mentioned will get around 30mpg highway.

  • avatar

    One reason other reason to buy a new car vs. a 10-20 year old classic is your families safety. There have been incredible innovations in the last century…in particular, the 5 star crash rating system has created much stronger and safer passenger boxes.

    Here the Insurance institute crashes a ’59 Bel Air against a 2009 Malibu.

    If you think the Bel Air is too old to be a fair test what about a ’90’s era Volvo 940 vs. a tiny little Renault Modus (5 star Euro NCAP rated.)

    Or here where they test a 9 year old Renault Espace vs. a new one.

    • 0 avatar

      With a name like Disaster, I can see why this is your only concern related to the topic.

    • 0 avatar

      Doesn’t invalidate his point though.

    • 0 avatar

      Yes. Valid point.

      And it’s not just crash ratings, but ESP could also be a life saver – particularly in inclement weather.

      Fuel economy is another factor. Maybe not in the US, but here I have co-workers who spend $250+/month for fuel – commuting. Saving 1/2 of that would subsidize new car payments. Even more so if fuel prices climb as some predict.

    • 0 avatar

      The list is long.

      Electronic Stability Control
      Antilock brakes
      Side Airbags
      Two Stage Airbags
      Side impact penetration prevention (door bars)
      Roll over/roof cage strength
      Halogen lights, followed by HID lights
      Driver side airbag…..front passenger air bags
      Off center crash protection…passenger cage stiffening
      High strength steels
      Engine movement during a crash
      Steering column collapse
      Tempered glass
      Laminated glass
      Front and rear defrosters
      High mounted brake lights
      High mounted turn signal indicators
      Backup cameras
      Radar warning systems
      Driver and passenger rear view mirrors
      Dimming rear view mirrors
      Radial tires
      Winter formula snow tires
      Disc brakes
      Independent suspension
      Clearer glass
      3 point safety belts
      Safety belt pretensioners
      Child safety seat clip points
      Passenger side airbag deactivation
      Blind spot warning systems
      Mirror mounted turn signals
      Fuel pump deactivation in a roll over
      Fuel tank protection

      Not all these are available on all cars and I probably missed some…but you get the idea.

  • avatar

    Well written, I think that for long term durability the ninties cars will be far better than todays crop, where emissions controls are punishing durability, especially on Diesels. Besides, who is going to buy a new injector for more than a grand on a 15 year old car? Never mind reprogramming the ECU with the correct injector codes for that new injector….

    Not to nit pick but Drive by wire plays a very important part in being able to achieve the current emissions legislation. Its a technology requirement imposed by legislation, just like cats, DPFs, and SCR systems.

  • avatar

    There is one minor inconvenience with being a long-term car keeper: lack of market experience. I’m going to have to buy a pickup truck by this summer. Looking at trucks like mid-1990’s T100’s or early 00’s F150s on craigslist. I see them consistently priced at 2x Edmunds private party value by private sellers, and $2K over Edmunds Dealer Retail by dealers. But I haven’t bought a car in over 8 years so I’m very rusty at negotiating and I’ve never bought a car in the craigslist/ubiquitous internet pricing era. I’m not trying to get a steal, just want to pay what the vehicle is worth and not overpay and so far no sellers are budging. WTF? It must be my approach because I can’t believe they are getting those prices, but I am so out of practice. Steven, this sounds like a good topic for a Hammer Time.

  • avatar

    I spent my time driving clunkers when I was younger and don’t want to go back right now. Back then, I liked working on them and didn’t mind a little downtime to replace a clutch or change a timing belt. Now, with a family, I need a loaner when one of the cars is in the shop. Therefore, I drive newer cars and will not go back until I can weather the downtime easier and have more time to wrench on my own. Generally, wrenching is not fun when you depend on the vehicle to get to work the next day.

    Also, when I was in high school, $2500 would get you a shitty used car. Anything with less than 150K miles was generally out of my price range. Now, with $2500, I could pickup a really nice highschool kid car. I know there were many factors that contributed to the drop in used car prices, but I think Steven hit the nail on the head. Cars last longer, fewer are junked, so the supply of viable used $2500 cars is larger. Furthermore, if you account for inflation, $2500 in 1994 is worth ~$3550 in 2008 dollars. Given that budget, you have even more vehicles to choose from.

  • avatar

    I agree we should export more and have balanced trade with our trading partners. I am a huge proponent of balanced and fair trade. Where would Hyundai be today if the US allowed the same number of vehicles sold here as US sell in Korea? Same goes for all Japanese cars as well. Fact is the US is intentionally killing off its industrial base and capabilities for whatever reasons I can’t fathom.

  • avatar
    John Horner

    With shop labor rates in the $100/hour neighborhood I don’t think we are going to see a massive move to driving 10+ year old cars. Most such cars end up with at least one $1000+ visit to the shop at an unpredictable time every six to twelve months. I have one friend with a terrifically well maintained 140k mile Toyota 4Runner, and that thing eats money on a periodic basis. Most recently, $900 to replace the leaking heater core thanks to the “disassemble interior, replace part, reassemble interior” engineering of the thing. Another friend with a 1999 Volvo just dropped over a grand to have the electronic throttle something or another replaced. In the case of the Volvo, it is a part which fails on all of them and for which the warranty extension just ran out. Volvo said tough luck. At some point, people get tired of these surprise expenses and sign up for a predictable monthly payment.

    • 0 avatar

      True, but even a $1000 bill every 6 months beats a $400-$500 payment every month. The best car deals are when you keep a reliable car well after the payments run out. My brother averages 10 years on his cars…the last 5, payment free. He usually ends up selling them when the repair is more costly than the vehicle…or when they become too unreliable.

    • 0 avatar

      Disaster, I agree, but your point depends largely on the car itself. I owned a 1998 528i and knew I would put $2k/yr into it for regular repair and off cycle fixes. That didn’t matter to me as I enjoyed the car more than anything else new. Recently sold it for more space and bought a 2001 740i. Beautiful car, drives great, but crimeny, I’ve already had a $600 repair and will need to sink another 1k into it to fix a broken power window. I had the 528i for 8 yrs, and have had the 740i for 4 months.

      I doubt I’ll have the 740i this time next year.

  • avatar

    Steven well done, your assessment is spot on. I’m certain that this subject is on the minds of not only millions of people as they look at the car in the driveway but also auto makers in Detroit, Munich, Seoul, Tokyo and beyond.

    When I moved from my 25 acre home in New Hampshire to my current 1/4 acre postage stamp lot in So Cal I replaced my ’78 F150 XLT Long Bed with an ’02 Durango SLT 4×4. Went from weekends and vacations spent hauling, mowing, chopping, plowing, building and repairing to road trips exploring our wondrous National Parks and Forests here in the Western US. As a third vehicle (also own a sedan and convertible) the Durango has been a relatively low hassle and low cost of ownership proposition over the 70K miles I’ve put on her.

    The 4.7 L V8 would be a thirsty commuter car but as a truck to haul 3 or 4 of us with all of our gear it’s not so bad. And while no Jeep Rubicon it has never let us down on the sort of unpaved roads/wilderness we travel when on our trips. Upgrades to the brakes & suspension, quality tires, a well cared for exterior and interior along with a competent repair shop has made this now nearly nine year old vehicle both road worthy and not a bad looker… at least in my eyes!

    Over the last couple of years I’ve looked on-line and visited dealerships but in the end just can’t justify the $40,000 to $60,000 new and $15,000 to $30,000 used it would take to replace the now fully paid for and depreciated Durango. So like many people I’m going to hold on to the old girl and hopefully get another 5 – 7 years of cheap transport from her. As your article suggests I’m one of many making the choice to hold and repair versus dump and buy.

  • avatar
    Gardiner Westbound

    I typically buy a new “quality” car, maintain it well, and keep it for 10+ years. People always want my old cars so I get decent money for them with minimum hassle. Amortizing the ownership cost over that time keeps the average annual cost reasonable. Driving the same car for a decade, however, is boring. Variety may be the spice of life!

    Recently I have accompanied several people on used car buying safaris. Mr. Lang is right. There is a lot of very good product on offer at reasonable prices. A four or five year old car still has years of good life in reserve and the admission price is unbeatable. I’m not sure I will buy another new car.

    • 0 avatar

      I typically buy a new “quality” car, maintain it well, and keep it for 10+ years. People always want my old cars so I get decent money for them with minimum hassle.

      Indeed, for every good used bargain out there, someone had to have bought it new originally. Glad you’re one of them.

  • avatar

    How MUCH you drive has to factor into this decision process. If a vehicle will go less than, say, 8-10k miles a year, it makes no sense to buy new. So, for drivers like me, the best deal is a 3-5 year-old car with relatively high (highway) miles on it. I sell it when it’s about 10 years old as a relatively low mileage car. I bought a 5-year-old Volvo wagon with 80k on it for $10,000. I drove it to 120k in six years and sold it for $6,500. Good luck beating $3,500 of depreciation for 40,000 miles in a new car.

    I’ve just repeated this buying a 50,000 mile 2005 Accord and am looking forward to similar results.

    Also, I would never shell out the big bucks for overpriced luxury items on a new car, but on a new car they hardly affect the price at all.

    • 0 avatar

      I like Findude’s rule of thumb for depreciation, roughly $1 for every 10 miles driven. As an example my ’98 Civic purchased new for $15,000 (plus financing, taxes, and maybe $2000 in repairs over the lifetime so let’s say $22,000) has gone 236,000 miles so I’m doing well. If you’re buying new, however, you’ll need to go cheap and reliable as you’ll have a hard time going 400,000 miles to cover a $40K car.

  • avatar


    What about new car bargains? Certainly it’s better to buy a new Civic or Corolla with cash back, owner loyalty, college grad discount, military discount etc. for 14,500 than a used Civic for 15,000?

  • avatar

    Just when I think that TTAC has “jumped the shark” or is a shell of what it used to be, Mr. Lang posts this editorial. It was these kind of think pieces that kept me coming back for more when I first discovered this site. Well done. Please sir, may I have some more?

    To all of you who poo-pooing the Cavalier in the editorial: He didn’t say it was a good car (looks, drivability, interior, etc.), he said it was reliable and and had many more miles left on it. Of course there are better cars but that wasn’t his point.

  • avatar

    It is interesting to note the demographic that will buy only new cars vs. people that tend to buy used cars. My wife wanted a new car for the first time, mainly because it was a new to this market car (the Fit) but also she had a Subaru that was a black hole for repairs before. She got really tired of taking it into the shop, and wanted a car that would be good for (hopefully) just basic maintenance without worrying about those longer term repairs…new clutches, disc rotors, CV boots, etc. That said, if you can find a reliable and well taken care of older car, then some of that maintenance isn’t so bad. As far as crash safety, I believe that the newer the car, the more research that has been done has been added to a car. Anti-roll over? Only in the last little while. Airbags? In the last 10 years or so. Stiffened high density steel? Also a more recent development. So, there is something to e said about newer cars, I analogize car safety with computer technology where it is always becoming more complex. So, car companies add that new technology regularly, partially as a PR benefit.

  • avatar

    John Horner makes an excellent case. Predictability is very important to many people. At Fitzmall’s website I see a new 2010 Sonata GLS I4 automatic can be bought under $16K out the door. Hyundai has a great warranty. Around here a clean 2008 Altima 2.5S with 40K miles will cost 3/4 as much–yet has no warranty to protect against potentially phenomenal costs of rather ordinary repairs. I used to say I’d never buy another new car. Now, good used cars 2 to 4 years old look overpriced. Much as I admire Mr. Lang’s articles, I must point out that he buys at wholesale, is an expert at judging cars, and for him repairs are cheaper and pose no real inconvenience.

  • avatar

    Something not discussed much on the thread is how leasing drives new car sales…automakers have to LOVE it, because it keeps most buyers on a 2-4 year cycle of acquisition, unless they get off the leasing merry-go-round…so many people are overworked, overstressed, etc, that they’ll gladly pay monthly to avoid the ‘drama’ of unforseen/unpredictable repair costs…

    Being ‘thifty’ myself,…I’ve always taken my chances (and sometimes suffered for it, but overall have come out ahead) but there’s no arguing that looking for a quality, good condition used car pays off in lower ownership costs as a whole.

    I’m not a good lease candidate, as I can’t stomach the thought of having never-ending car payments, and/or being told when to give ‘my’ car back, or cough up tons more money to keep a car I’ve ALREADY made payments on…

  • avatar
    Jack Denver

    From the demise of the Model T, the car you drive has not been about just providing good reliable basic transportation. Henry Ford thought that was enough and it almost put him out of business. GM was the first (but not the last) to realize that brand image and consumer self definition was just as important as the product itself. You have inside you a little lizard brain that does not operate on the level of logic but operates on pure emotion – ooh a shiny object, ooh this display will attract a mate, and the lizard runs your life more than you know. You can show the little lizard (or your wife) 100 times that a Lexus ES is just a Camry with leather seats, but the lizard won’t care. Unless you are a hermit who cares nothing for the opinion of others, a 10 year old Buick is NOT the same as a brand new Accord. Your friends and neighbors will not perceive it that way and you won’t either.

    This explains a very common TTAC paradox. How is it possible that 90% of all cars, except for a few TTAC approved favorites, are utter crap – lumbering SUVs that will never go off road, cars that look sporty but really aren’t, luxury cars that are mere paper thin facades of luxury, etc., and yet people line up to buy them? The answer is that people aren’t really buying technical excellence in the Steve Lang/TTAC sense, they are buying a way they want to perceive of themselves and to be perceived by others and this is WAY more important than direct injection or soft touch plastics or other technical stuff that they don’t understand to begin with. Given this, you can see where the US automakers made a logical leap that they could sell you utter crap and get away with it as long as the “image” was right – that extreme view was not true any more than Steve’s is. You need product AND image in the long run, so it’s not that the TTAC stuff is totally UNimportant, it’s just not the ONLY thing that’s important to most consumers.

    Sure, when times are tough, people aren’t going to trade in as often, but not because there has been some paradigm shift and they now agree w/ Steve that a 10 y.o. Buick is a great car – it’s because they have no other choice, and as soon as they can afford to get rid of that Buick and let the neighbors know (by the shiny new car in the driveway) that they are doing better, they will.

  • avatar

    Great article,Mr Lang and also some great comments. Yes the dreaded repair can, and will bite you in the ass. So one needs to be super carefull before you plonk down your cash.

    Honest mechanics are indeed rare beast,but they do exsist. You have to look for them. Word of mouth works best,in my experience.

    I agree with your article 100% and I believe the North American car industry will never return to where it was.

  • avatar

    I still well remember an ancient Road and Track article from the early 1970’s that noted that the average buyer of a Rolls-Royce in the UK kept it for 27 years….And that the final cost was below what a theoretical american would have spent buying a new mid-range Ford sedan every 3-4 years and trading in the old one for that period of time.

  • avatar

    Having spent 30 years selling new and used vehicles I know for a fact that most new car buyers are not willing to consider a used car let alone a ten year old one with 100k+ miles.

    The majority of people who buy cars new or used are not representative of most if not all of the TTAC posters.

    It is nonsense to think large numbers of traditional new car buyers will all of a sudden start purchasing used cars. It’s not going to happen.

    • 0 avatar

      True, the typical new car buyer who traded in for a new car every 3 years is not going to search out a 10 year old car, short of financial disaster. That said, a lot of people are stretching out their purchases.

      Gee, a 4 year old car isn’t so bad, and paying $800/year for repairs beats a monthly car payment. Let me keep it a bit longer. So long as they don’t get into a stretch where every month they feel like they are shelling out the equivalent of a new car payment, they will keep their current vehicle, and pocket the savings.

      This is why annual sales in the US fell from 17M to 11M: a third of buyers postponed purchases.

    • 0 avatar


      no, a 1/3 of the buyers didnt postpone anything,
      they never should have bought new in the first place.
      remember the CREDIT CRISIS, ppl borrowing without actually
      being able to pay back.

      there wont be anymore cheap new cars for everyone to afford.
      notice ford moving upmarket, and saturn/pontiac being killed. no more new cars for the less affluent. theres plenty of undriven, redundant used cars.

  • avatar

    Regardless of where you stand on the new vs. used, you should be glad that there are people that passionately hold an opposing view, as both kinds of people are needed to make the system work.

    As has been previously pointed out, every used car started out new, and new car buyers are needed to generate a continuing stream of used cars. We can’t keep passing the same used cars around forever (see Cuba). And new car buyers need used car buyers to purchase their trade-ins or lease turn-ins. If not for them, high depreciation and low residuals would make new car ownership very cost prohibitive.

  • avatar


    Pickup resale values don’t follow the normal rules.

    Having owned 4 different ones over the last 10 years, I have found Edmunds to be completely inaccurate when you get down to the low end of the market.People will hang on to them as long as they have room for them.

    Basically any running pickup with a current emission certificate is worth $1000-1500. As long as it runs it will sell . I bought a Mazda B2000 at auction for $700 with some minor stuff wrong, I sold it for $1300 4 years later. Phone was ringing off the hook.

    For a pretty nice compact pickup expect to pay $2500 or up, anything below is potentially a fixer.And all used Toyota pickup trucks regardless of age are overpriced.

    • 0 avatar

      Where I live, used trucks are easily double the price of used cars (by model year) almost irrespective of condition.

    • 0 avatar

      Convertibles as well. I had a colleague who used to buy old body on frame cars and chop the tops off with a die grinder. He’d then add some black duct tape to the edge and drive it all summer. At the end of the season he’d sell it as a “converted.” He always sold them for more than he bought them for.

  • avatar
    fred schumacher

    Used car buyers and new car buyers are, in general, two different classes of consumers. It’s not just about money. Although people who are short of income don’t have much choice, and those who drive a lot of miles, like myself, would be fools to invest big bucks in a new car which will rack up miles so fast it will be depreciated out in a couple of years, much of the market for new cars is driven by two factors: urban anonimity and the car as an appliance.

    Automobiles used to be fussy, cantankerous beasts requiring personal attention. Today’s cars are so reliable they have turned into an appliance. Toyota is the manufacturer that most realized this, which is why their massive recall is so damaging. However, with reliability came complexity and, while frequency of repair went down, cost of repair went up.

    Most people no longer have the personal relationship they once had with a repair shop or mechanic. Without that relationship, it’s hard to develop trust. The new car warranty is the insurance policy that allows a car owner to forget about the problem of trust in an anonymous urban world. The bill will be paid. In exchange, the owner has to deal with a perpetual monthly car payment, but that is acceptable when an ordinary repair can easily be equal to several months’ payments. These owners are after security, and they’re no longer influenced by brand loyalty.

    Used car buyers stick to old stuff they can still repair themselves, or have a relationship with a shop they trust. When people ask me for advice on what used car to buy, I tell them to first find a shop and a mechanic they have confidence in, and then buy the vehicles they fix. In exchange for a modicum of insecurity, the used car buyer, in general, will be able to own and operate a vehicle at a fraction of the cost of a new one.

    As regards the question of safety, people worry about head-on collisions, which are rare and deadly no matter what you drive, but the number one cause of highway death is a single vehicle running off the road. High center of gravity is what is deadly in this situation. Recently, driving home 75 miles through ground drifting causing black ice in the driving track, numerous SUVs and pickups had slid off the road and were on their sides or roof. There was one minivan off the road, but it had stayed upright. No cars had slid off. We tend to worry about the unusual, dramatic event and ignore the daily dangers.

  • avatar

    I know what you mean. Several weeks ago I went up to Portland to help my 24 year old daughter buy a car. She’s just working part time in a minimum wage job, so she could only afford something cheap. We ended up buying a 1989 Honda Accord with about 134K miles for $1750. The interior and body were like new, no dents, scratches, or wear in the seats. Several weeks later it has incurred a few minor problems, such as a leaky oil pan, and CV joints that are coming close to needing replacement.
    Now, go back 35 years to 1975, when I first started driving. It would have been highly impractical to buy a 20 year old car. Even in 1975, a 1955 car would have been deemed a classic. A year later, I did buy a 1957 Chevy coupe with flames on the hood. It would get stares and head-turns everywhere I drove–57’s were becoming rare even then. How many 1989’s get stares and head-turns today? Back in the 70’s, an old car was ten years old. When my parents bought their 1962 Rambler (in 1962), it was old and worn out (an embarassing) at 90K. Quality has definitely improved…

  • avatar

    Used vs. new also depends on the type of vehicle in consideration. Chances are most used Camrys haven’t been driven like Indy cars. For a sports car or off-road truck the probability that it has been abused is much higher.

    For me the extra 3 grand for a brand new 4×4 Xterra vs a 2 year old Xterra with 30k miles was worth it for the peace of mind. I plan to keep the truck for at least 10 years and would hate to have a major component fail prematurely because the previous owner decided to run the Baja 1000.

  • avatar

    I’ve always driven older European cars. I am an experienced DIY mechanic and will tackle pretty much anything short of an engine rebuild in my lift-equipped garage. But you know what? Last year I bought myself a brand-new Saab. 11 miles on it. Couldn’t pass up the $13K discount, and frankly at 41 I am tired of wrenching on my daily drivers. And I have a great job, single, and no kids so I deserved it! :-) I’ll keep it long enough and well enough that I won’t lose too much money on it when I sell it on, and it sure is nice to have a new car with no issues. Now I have more time to wrench on my toys – heading out to the garage to work on my “new” Alfa Spider in a few minutes.

  • avatar

    The new car buyers will always be new car buyers. i’m the used car manager at a Mercedes Benz dealer. From the consumer shopping chevy malibus all the way up to a gentleman looking for a bentley the people who used to buy new cars will still buy them. In my opinion, the idea of the older 8+ year old cars makes little sense anyways. Repairing modern automobiles is expensive. I’ve had tons of cars over the years and only bought(as in retail purchase not lease) new once. i’ve had my 2000 audi s4 since new and I love the car. I’ve owned cars that are much “better”-more expensive, faster, more luxurious etc. but I have never gotten rid of the audi. but it makes absolutely no since to keep it. In 2009 alone I spent a lot more on repairs than the car is even worth. Over the course of ownership I’ve probably spent almost as much as the 40K it cost to purchase bakc in 2000. But to me its a great car its still my favorite sedan looks wise and its fun and I always drive it when the weather is shitty. Your average american doesn’t love their car as much as I love that beat up old audi. While a car like a honda accord may have cheper repairs and need them less frequently, its still not rare to have $1000 plus dollars repairs on a modern car come up from time to time over the course of ownership. These add up quickly and it really makes much more sense to own a new car or a car with the balance of facroty or certified warranty.

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