Auto Recovery: If you have been following along the past few months, you know I was briefly in the market for a new car. My '02 Camry is starting to get a little bothersome. Naturally, like everything else money intensive, that went on hold when I plunged into the house market. I turns out it's just as well. The once-in-a-lifetime buyer's market for cars has passed.
Hamstrung by union requirements to keep workers on, the automakers cranked out cars beyond anything demand could handle because the alternative was to pay them to do nothing. They loaded up inventory pipelines and fobbed off piles of cars on rental agencies. Used domestic sedans were so plentiful and cheap that enormous wholesalers sprang up in places like El Paso to buy cheap used cars for resale south of the border. Manufacturers were axe-ing entire brands - Pontiac, Saturn, Plymouth, Mercury, Hummer - and divesting others -- Saab, Volvo, Jaguar - and trying to clear them from their lots. Combine all that with the recession and a gas crisis that made SUVs into boat anchors; if you were one of the sparse few in the market, "name your price" was not such a huge exaggeration.
Well, if you try to name your price today you're likely to hear, "Too late. Ya snooze, ya lose!" Once the bankruptcy emergencies hit and the cushy fictions of the labor agreements were abandoned, the first thing these guys did was cut back production. Oversupply does not appear much of an issue anymore. The best car website I know of, The Truth About Cars, has an ongoing feature called "Hammertime" about the world of auctions and wholesaling and independent used car dealers wherein they argue this market shift has hit the used car market hardest, especially when you couple the fact that big money loans for new cars are not so readily available anymore and folks are getting more comfortable with good condition used cars (since all cars are of enormously higher quality and durability than they were just ten years ago). Demand up, supply down: do the math.
So having just dropped $400 on general maintenance and another $700 for bearings on the left rear wheel, and facing dropping another $700 on the right rear, not to mention probably another $500 to deal with whatever reason the check engine light is on, what do I do? Kelly Blue Book estimates about $5500 for a private sale. If you figure $2500 of recent and upcoming work, that leaves a $3500 residual which would be a nice down payment on something new or, even more so, a year-old model.
But honestly, as I have discussed before, a new car has pretty much nothing to offer me over and above my Camry when it's working properly. Even if I average $1500 a year on repairs and maintenance going forward, I'm still better off cash-wise with my current ride, and that's before taking into account all the unexpected hits to my wallet that a house is going to bring. I probably could have been swayed into buying if the monster buyer's market was still going on and I could have arranged a killer deal, but that time has passed. No. I'll pay to keep the Camry going another 4 or 5 years. By then, maybe I can sell it as a classic.
