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I think you are right that the learning curve comes into play and over time the cost spike will smooth out some. But remember that in the 80's there was another influence on Detroit pricing - Japanese imports. To a large extent, I think we're already getting to the very high costs of auto repair and parts that you talk about. Not just technology driven, but the whole nature of industry pricing has changed forcing dealers to increase reliance on service shop profits to offset declining new car sales margins.
C'est la vie. :sick:
Given that our fleet is something like 150 million vehicles, and sales are something like 14 million a year, it takes several years of improved mpg being fed into the system before there's a big effect. But by 2020 it'll be significant. By 2030 it should be quite big.
SelectiveRationality
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Every now and again I do wonder where auto OEMs would be without the "keeping up with the Joneses" mentality that makes so many people trade in their cars for new models after 3 years.
My father tried to justify it to me a couple of years back by arguing that 3 years after purchase was when you got the best price for your old car. I don't know whether that's true or not, but it did prompt me to sit down and do a fully costed spreadsheet model of car ownership including insurance, depreciation, deteriorating fuel efficiency, rising servicing costs etc over a 10-year lifetime.
My conclusion was that despite rising maintenance costs, by far the cheapest thing to do is to buy a car and run it into the ground. I can understand somebody wanting to exchange old for new because of advances in safety or functionality (the desire to be able to plug in a portable music player or smartphone comes to mind) but from a cost of ownership perspective, buying a new car every few years is massively expensive. If you want to save money, keep your car!
As you say, not what car companies want.
SelectiveRationality
I think there might be a few things that happen at the three year mark that might, somewhat, back that up. Usually a car takes the biggest depreciation hit in the first year or two. So, at year three, that usually starts to level off, although it doesn't stop. And, nowadays, I think the three year mark might finally be at the point where you have some positive equity in the car, if you're financing it for five years.
But yeah, I'm convinced that driving it till it drops, and then replacing it with a newer, 1-2 year old car, is probably the best way to go. Maybe less so with some of the top-tier imports that don't depreciate as much.
Exactly correct. My brother and I were having this conversation the other day. We're both convinced we'll never buy a new car again.
My sister on the other hand, who just had to buy a new higher mpg car, wouldn't even think of buying used. I told her to look around when she recently bought a Sonic, she was less than receptive.
The only brand-new car I ever bought was my 2000 Intrepid, and part of the appeal there was the low 0.9% financing for 5 years. At the time, most used car rates were around 6.75-7%, or more.
However, even there I probably would've been better off used. I remember going back to the dealer a few months later, for something-or-other, and seeing some used '99 Intrepids with maybe 25-30,000 miles on them, priced around $13-14K. In contrast, mine had an MSRP of $20,390 plus $560 freight. I ended up getting it for about $19K, but by the time you threw on the freight, tax, tags, an extended warranty that I never needed except for the peace of mind, and the total was up to $22,389 out the door.
it helps to buy used when what you want has been around But, when the "one" is a newly released model, you don't have much of a choice!
my wife also just does not like or feel comfortable buying a used car for herself. Which is fine. We do ten to keep her (aka the family) car for a long time. the van is going on 8 years, and I expect to keep the RDX longer than that.
But, if you shop carefully and buy something that does not have stellar initial resale, you can do well with gently used.
Now, keeping until it is run into the ground? That is a different story. Some people have a much lower tolerance for cars breaking down on them, or dealing with repairs and down time. So there has to be a cut off point when a car goes from everyday, to spare.
we tend to take my wife's car on most trips, and they are often in the boonies at night. No chance I am doing that in something I am nursing along, waiting for the next shoe to drop!
different story if it is my care that is pretty much local short hops.
so for the primary and travel wheels, something around 10 years/100-120K is likely to be as far as she will be comfortable with.
at that point though, keeping it for 2nd car duty is entirely possible.
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
My big fear of used cars is you never really know what your getting; even with a mechanic's inspection.
First, there's a lot of people that willfully don't properly maintain, and act negligently. Then, there are people that attempt to maintain their cars properly in good faith, but then they happen to have a mechanic that is either A) innocently honestly incompetent or a fraud, liar, and thief who cheats on services and doesn't do the work at all or acceptably on purpose to save time and money. The problem is that A & B run rampant in the auto repair business in Southern CA. I even hear horror stories from an "inside" guy that worked at the dealership and talked about "shortcuts" they would take on services. So even at the dealership you are not safe! You can overpay and still get screwed on the work and service.
If you don't drive a plain vanilla vehicle that sells 100K plus a year (like Camry/Accord) to make it ultra common, you might run into a lot of incompetent shops and mechanics.
Getting a quote for "Multi-ATF Fluid" on my DSG transmission service helped me avoid one shop in San Diego, no matter how cheap they were pricewise. The DSG tranny requires a special "DSG Oil," not a fluid.
Some cars are better off buying new, as there's not much savings. Many highly economical new cars fall into this. Things like Civic especially.
Buying an old rental is the riskiest buy I can imagine.
Plus you can park without having to pay $28.
besides, these days, that is what, 2-3 oil changes tops?
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
Do you have a locking gas cap? Any noticeable damage to the cap?
It may be an old wives' tale but I heard of sugar in the gas tank. No idea what that would really do.
Edmunds Answers
Sugar in the Gas Tank Destroys a Car's Engine
This myth has been around almost as long as there have been automobiles. On Halloween, the older and less scrupulous trick-or-treaters go around the neighborhood putting sugar in the neighbor's gas tanks because it will destroy the engines. Or maybe an angry homeowner uses this trick to get revenge on a neighbor for the loud parties he or she likes to throw. The premise is that the sugar will caramelize and form a thick sludge that clogs your fuel lines and gunks up the carburetor. However, scientific studies have failed to produce evidence of such a reaction resulting in damage to an engine. Very little of the sugar even remains inside the engine long enough to do harm. Because sugar is particulate matter, it could conceivably cause damage to an engine the same way that sand and dirt can, but the sugar would have to be added to the gasoline repeatedly for any significant damage to occur. So you'll have to find a better method of getting revenge on the neighbor whose noisy car engine wakes you up early every Saturday morning.
My cousin once owned an Exxon station. Guess what? His wholesale price for Exxon gasoline was more than the no name up street.
Further research - Lukoil dealers are mad that Lukoil charges them more than other brands charge their dealers. It has nothing to do with Lukoil selling to other dealers at lower prices.
http://www.newson6.com/story/19522958/gas-prices-hit-8-in-nj-pa-in-lukoil-protes- - t
Russian Oil Company? What going on?
Well we live in a global economy. BP = England. Shell = Dutch. Conoco/Phillips owns 10% of Lukoil.
At least there's no Chinese fuel concern here.
Yeah, I'll stick to that Venezuelan or Middle Eastern gas. Those folks are so much nicer.
I'm not saying people have to buy Lukoil. Heck, most likely the gas that Lukoil sells their dealers wasn't refined by them. Lukoil doesn't have any refineries here so I presume they buy gas from other refiners.
You have to remember that most stations are not owned by the people the operate them. They are usually owned by the refiner or another party. The operators lease the stations and part of that lease often is that they have to buy their gasoline from the marketer - in this case Lukoil. Lukoil is free to charge their dealers whatever they want. It doesn't matter that Shell is charging its dealers less.
Also, gas for these dealers is typically a loss leader. The goal is to get people into the station to buy coffee, soda, milk, rolling hot dogs, et al. That's where the money is at gas stations.
I mentioned a cousin that owned an Exxon station. In reality he and a partner leased two. One was an inner city full serve with a repair bay. The other was a suburban kwik mart just of the highway. In the city he often charged $0.50 more per gallon than the highway mart because pumping gas took time away from his repair business. But it was full serve and he got to know the locals and got them back for service work. The kwik mart barely broke even on gas sales but made about 95% of it's profit on the sale of everything else. In both cases, selling gas wasn't the important part of the business. It was there to drive the other items.
Funny you mention that. It seems like Citgo gas stations are fading away.
I understand the process at gas stations, but I thought someone said Lukoil sold for a premium (even when the dealers weren't jerking the pump price in protest). I really just don't understand why many consumers pay premiums for gasoline compared to nearby stations with other brand names. It seems like in the Midwest BP (formerly Amoco and Standard) gets a dime or so more than say Shell. In the west, buyers seem to pay more for Shell.
Then I looked at the pump and regular was $4.29. I called the guy over and said, what's the deal? He said kerosene was $3.99 and looking at the big sign again, there is was.
What idiot station other than a bunch of greedy crooks advertises kerosene where you expect regular to be?
I went back to Marathon.
It's all marketing. The major brand names (Shell, Exxon, Mobil, Chevron, et al) tout their additives and the benefits they provide. It's up to the consumer to decided whether or not that's important to them.
Around my area, the big second tier brands are Hess, Irving, AL Prime and Cumberland Farms/Gulf. None of these market additives and typically run 10-15 cents less per gallon than the first tier. I very rarely use the first tier brands unless I'm desperate.
One thing I have noticed recently is the spread between 87 and 93 octane. It used to be 20 cents per gallon. Now the spread is approaching 40 cents. Even when gas was around the same price a few years ago, the spread was never this high.