What Is Your Used Car Sweet Spot?
One of my good friends and long-time TTAC commenters asked me this question.
Hey Steve,
If you have a moment, what are the high and low values right now at auction for the following:
2000 Chevy Monte Carlo SS 40K miles gold/tan
2006 Mustang GT premium 27K maroon/tan
2006 G6 GTP folding hardtop 53k black/black
I could only give him one response and it wasn’t, “Go play darts and put some numbers together!”
The answer came in three simple words.
Condition, condition, condition.
Condition is the number one determinant of marketplace value when it comes to a used anything. A 30-year-old Jeep Cherokee? Could be worth $5,000 or $500. A 2013 Kia Forte? Pick any number between $4,000 and $10,000. Everything related to the used car business from old racing memorabilia to a near-new racing suit has condition as the keystone to value, with bullshit factor a close second.
This is why dealers try to make folks “buy with their eyes” by investing an awful lot of money into the cosmetic condition of used cars. Those used cars you see at Carmax and other large used car retailers are reconditioned by a small army of paintless dent repair technicians, detailers, and specialists who can handle virtually everything that is between the bumpers. They spend big money because you spend big money.
Condition is the king, queen, and jack of the car world. But there is a bigger psychological ace that you have to consider when it comes to buying a used car.
Risk tolerance.
Are you willing to buy a car with a salvage history? How about a car that doesn’t run at the moment? Forget about the possibility of knowing the answer to the unique problems for each scenario. The one irreversible roll of the dice every used car shopper and enthusiast must consider is where exactly they fall on the risk spectrum.
With that in mind, let me ask you the question I always have rolling in my head whenever I’m serving my customers, whether they are car dealers, old friends, or a new person in search of a used car.
What is your ‘sweet spot’ when it comes to a used car?
Let’s make this an à la carte process. I’m going to offer five categories: age, miles, cosmetic condition, mechanical condition, and title status. You tell me the riskiest one you would consider for a long-term daily commuter.
For example, my brother could handle a car from the early 2000s in average mechanical and cosmetic condition with a clean title and no more than 100,000 miles. Sajeev Mehta on the other hand would do cartwheels over a Reagan-era car that is no more than 150k, has moderate mechanical and cosmetic issues, and has a minor title issue such as a theft recovery.
Here are your five categories
Age
Obama Era (2008 or newer)
Mileage
Under 50k
Cosmetic Condition
Extra Clean: Time capsule!
Mechanical Condition
Amazing: An OCD owner who loves cars more than humans.
Title Status
Clean: No defects.
Everyone has their own sweet spot where they are willing to go out on a limb to pursue a car worth keeping. What’s yours?
More by Steven Lang
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I'm running Bush (the 2nd) 80-120k Good physical condition Good to very good mechanical Clean title. Works so far. I would go older for certain cars as well but I really don't like going much above 120k for mileage unless it's a real beater.
The market sweet spot is probably $350 x 36, or about 12k. Payment is reasonable for most folks, and the note isn't too long. This, of course is NOT what the OE want you to do. What the market would like is a mid 90's Accord, but NEW, 4 cyl, autobox with the usual power accessories and bluetooth. The OE give us that car for 24k or so, with the usual dealer nonsense, so it works out to a lease for that price, or a buy on a much longer note. The under 20k cars out there new give us a penalty box, designed for no other reason but to make the other cars look reasonable. (See:$2500 handbag at the department store) I buy new, fortunately, and run until it is a heap of rust in the driveway. The taxes on most new cars alone in my area would be $2,000, and as that is "flushed away" money in the transaction, I always balance the repair against the wasted money for the taxes. Suddenly new shocks don't look expensive. Since the car *the market wants* isn't for sale, and what we get is marketing driven as "how much can they be forced to pay with very creative financing", we end up with used car roulette at the sane price point.... If interest rates ever rise, this one is game over.... If forced into the used market, I'd get a Panther (really, gas is cheap now, and we want to get to work, not impress passersby), or another e46 from a no salt state, as I can fix most of the car myself.