Think about it …
After decades of consumer complaints about often-iffy quality control, the car companies (the American companies in particular) performed the equivalent of a parking brake 180. New cars (almost any new car) can be counted on to last longer than most people’s marriages. A 150,000 miler used to be exceptional; it’s routine today. Back in the ’70s, the typical new car was good for about 5-7 years and maybe 100,000 miles, if you got a good one and treated it very gently.
But for most cars built in the ’60s, ’70s and ’80s, by the time the odometer said 75,000 miles the car was telling you (in the form of constant breakdowns and endless repair costs) … Kill me… please.
75k in a late model car is nothing. Hardly broken in. The thing not only still looks new, it drives new. Feels tight and strong. Doesn’t breakdown or overheat. Most want nothing from you but the occasional oil and filter change; maybe a set of new tires every 40,000 miles or so.
It is amazing.
Notice, also, that you almost never see (or smell) an Exxon Valdez anymore. You know – a not-too-old car with clouds of blue smoke pouring out of its tailpipe. That was a common sight back in the ’60s and ’70s. As were “ring jobs” and “motor honey” (gunk you put in the engine if you were too poor – or cheap – to afford a “ring job”).
So was rust.
Swiss-cheesed bodies on cars not even five years old was a common sight back in the Days of Disco – and even into the Reagan Years. It was terrible. As palliatives, dealers sold high-dollar Ziebart rust-protection packages to try to make up where the factory skimped. You spent hundreds of bucks to have some dude drill holes in the lower rocker panels and other areas to spray in rust retardant. And that maybe bought you two or three extra years before the paint began to bubble up. The only realistic way to keep a ’60s or ’70s-era car from rotting was to keep it from getting wet – which was fine if you never needed to actually drive (or wash) the car.
But since the ’90s, rust has become almost a non-issue.
Check out the typical late model 10-15 year old car. Most usually still have completely intact floorpans and quarter panels. No sign of rotted out lower fenders and doors. Even if they are subjected to months of wintry driving (and road salt) every year. And kept outside. Aftermarket rust protection packages are no longer necessary; you don’t even have to wash or wax the car. It just endures…
Even the paint usually still looks good ten-plus years down the road.
That was rarely the case prior to the ’90s – unless the car in question was treated like a holy icon, never driven in poor weather and always kept under cover in an enclosed garage when not in use.
It was once – and not too long ago – pretty exceptional to see a 20 year old car in service as a daily driver. It’s commonplace today. In fact, the average age of the American car in service as a daily driver is now 8-10 years old, a record.
This has been a disaster for the car industry, as you can imagine.
People have clued in. They know that with decent care they can expect to need a new car not once every 4-5 years or so but maybe once every 10-12. New cars are more than ever a discretionary purchase and when the economy slips a little (let alone has a coronary and flatlines) people eschew the new – and keep on driving Old Faithful.
Yet the car industry continues to pour forth new cars – on the order of 18 million of them every year at peak – on the assumption that people need them. Which they don’t anymore.
How long can the industry tread water?
Notice that the value of used cars is increasing – an unprecedented development. Part of this is the scarcity induced by the vile “cash for clunkers” federal giveaway of two years back. But the major factor driving the upsurge in used car value is that people know that late-model used cars are a smart choice. There’s almost no downside to buying used – while there are many to buying new, including much higher taxes on the new car.
In my area, there is a personal property tax on motor vehicles. It is based on current retail value – and can be as high as $1,000 or more annually depending on what you have. But if you have a 10 year-old car, its retail value will be much lower than the retail value of a just-bought new car, which can save you literally thousands of dollars that would otherwise have to be forked over to the local Mafia (that is, the government).
With an older used car you can also dramatically cut back on your insurance costs because the premium will be based on the much lower replacement value of the older car and because you can choose to buy a lower-cost liability-only policy – which can be a smart move and a big money-saver if you are a good driver who doesn’t make mistakes that cause accidents. With a new car your premium is based on the replacement value of the new car – and unless you paid cash, you’ll have to buy a full-coverage comprehensive policy.
So, the smart money – and smart people – Go Used.
As more people clue in, it’s going to get even harder to sell the new stuff… much less make any money on the deal.
Throw it in the Woods?