How 0% Financing Deals Destroy Your Car's Value

The Wall Street Journal ^ | Tuesday, October 8, 2002 | KAREN LUNDEGAARD

[Aquinasfan]

I wouldn't buy a car that wasn't already at least 20 years old.

I used to own a '72 Cutlass. But isn't a car an "antique" at 25 years? In Massachusetts you can only drive an antique on the weekend. I dumped mine at about 20 years.

[TontoKowalski]

Ours is a 240GL Sedan. I bought it new, it's creeping up towards 200K, but we did have it put up in my MIL's garage for a few years while we were out of the country.

I've driven coast to coast in it at least 6 times, never been worried that it would break down on me. About all I do is change the oil frequently.

On that fateful day when it does finally drop dead, I think I'll probably get a small used pickup. It's inconvenient being a homeowner without a pickup.

[machman]

I've been looking at used cars the past few months as I have a daughter that will soon be driving. I can't believe the deals you can get on a two year old car. Virtually any new American car drops by more than 50% in value in those two years. Ford and Chrysler the most. They are right on with the Taurus, the same is pretty much true of the Dodge Intrpid too.

I've stayed away from cars from the big three for many years now, Japanese and German cars hold their value so much better. I got a VW Passat last year, not too much over invoice, and it is rated as having the highest residual value of any car in its class.

I tell you, the guys on the used car lots are desperate. They really, really want to deal right now. All the zero percent stuff has been killing them, as a glut of used cars hit the market and new cars are more afordable. I also think it will eventually kill off new car sales as well as they are just pulling foreward future new car sales.

[apochromat]

At the risk of being too obvious and simple, a consumer concerned about immediate resale would almost invariably be looking for a used car and is likely someone who is unsure of their economic future. A vehicle is not considered a liquid asset to the consumer. A car is not an investment unless made into one.

[cactusSharp]

I have many cars but I have an '83 Nissan Sentra Wagon
with 302,000 miles.....brakes,oil,valve work and
a clutch job are the only costs. oh and 30mpg too.

[agrace]

Saturns were cars we were torn on. The value was nothing and thus hard to trade out of, but the owner always wanted the hell out of it, and fast.

Really? People reported bad experiences with Saturn cars? I don't pretend to know much about cars, but we bought one 4 years ago, no frills (intentionally) 5 speed for the sole purpose of a long commute (my husband goes an hour each way) and to last as long as possible, and so far, so good. And the continued customer service from Saturn prompted us to go back and get a new Vue when the family car, 91 Taurus with 100k miles, became too unreliable for myself and kids. I love my Vue, extremely comfortable ride, great for my bad back.

Anyway, we'll not switch from Saturn as long as good things continue. We didn't trade in the beat up Taurus though, donated it. We figured it was worth losing the measely couple hundred bucks tradein we were getting for it.

[Revolting cat!]

My great 1983 Toyota, which I had bought new 20 years ago, has just fallen apart requiring a $1400 engine repair. Before a rational decision could be made, the better half decided to junk it and bought a 1983 Benz 240D Diesel, 146,000 miles and a rebuilt engine, from some immigrant mechanic for $3000. I still have the Toyota, hate the MB, but what am I to do, write a country and western song?

(Your response: "Thank you for sharing!")

[Psycho_Bunny]

I don't understand this article. I was in this business, on the banking side, for 6 years.

The Blue Book and depreciation values cited here look correct.

[aberaussie]

For those of us who buy new and drive them forever, this
does not sound so bad.

[Phantom Lord]

It wasnt that they had problems with the car such as breaking down, excessive maintanence, etc... They just didnt like the car and wanted out of it. Most complained of it being "Too damn small".

[VOA]

Well, for those of us who never buy new cars, this is good news.

Yippee!!!
Only bought one new car...a Mitsubishi/Dodge Colt.
It spoiled me...no new car could deliver the same value for dollars expended...
so it's back to used cars!

[lds23]

Part of the problem is the automakers have put too many unwanted add-ons and supposedly "nifty" features. Not to mention all the many, many, many mandated safety, control, emmissions, etc.

For example, the headlights on my car stay on "for convenience" for about 30 seconds after I turn it off. I end up standing in the rain waiting for the blasted things to go off, even though I'm SURE I switched them off.

Or the "always on" headlights - try driving through one of those Christmas light displays.

Cupholders, OK. But all the trim and gewgaws and whatnots - I ain't payin' for 'em.

[B4Ranch]

You can make some good buys on 4x4's in snow country IF they are owned by middle aged folks who would never consider driving them off the pavement. Now, you don't want a ranchers pickup 'cause it stays in 4x4 except when he goes to town on pavement.

[lds23]

The way I figure it, even if you have to sink $1000 a year into a car, that's about 3 car payments. So in a bad year, (let's say, transmission, engine work, etc.) and you spend $3000, that's STILL only 10 car payments.

[MrNeutron1962]

I intend to drive my cars until they are ready for the scrap heap.

[brianl703]

In Virginia, "antique" plates are an option for cars over 25 years old, but not mandatory.

[monkeyshine]

Cool. I wanted to buy a Suburban. I can get one with low miles for 1/2 the price of a new? Nice. And it won't have the new "crunch in a crash" design... safety being one reason why I wanted one to begin with.

[wardaddy]

This article is very astute. It reminds me of in the mid 80s when Mercedes lowered their new car prices dramatically one year thereby overnight wiping out over 10K's value in some of their models of one to two year's old. I believe they had to settle a class action suit over that.

I've got an MB M class 320 right now, that I have been trying to sell at 500 over wholesale for 6 months. The used car market is a glut.

[William McKinley]

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[alfa6]

Hey TS, the misses gonna let Max ride in the new wheels???

GRIN

Regards

alfa6 ;>}