My son is about to get his first job after graduating (cum laude, let me mention) and wow! Chevrolet's base sedan used to have an MSRP just under (barely under) $10,000. Not now. And the situation with Nissan, Suzuki, and the other slightly better but more expensive cars has also gone up dramatically. A few years ago you could buy a year or two old car, still under factory warranty, and save a couple thousand dollars. Not any more!
You would almost think that the car makers aren't hurting.
There's a second side of this--cars last a *lot* longer today than they did when you and I were learning to drive and learning about cars. Even 10 years ago I had a guy tell me "don't EVER buy a car with more than 60K on the clock". This was an era where Hondas, Toyotas and Subbarus routinely got over 150k when well maintained.
ReplyDeleteOf course, he drove a Ford Mustang, so maybe that's why.
I wouldn't hesitate to buy a 10 year old car for commuting, if it looked clean and had any sort of maintenance records.
It's been quite a while since the MSRP of Chevy's base sedan was under $10K. I'm pretty sure that last happened before Cash For Clunkers. A higher price for used vehicles could certainly be a side effect of Cash for Clunkers.
ReplyDeleteLast time I saw a GM sedan with less-than-$10000 MSRP was the first year that the Saturn was offered.
ReplyDeleteProbably '96, if I remember right.
Of course, I wasn't car-buying at the time. I was a teen.
And I haven't been following the base price of new automobiles very closely since then.
From my perch in the Auto Biz, I noticed that all charts about sales of new cars in the U.S. have a huge drop during 2008-2009 time period. The trend shows a significant increase from that low point to present, but an almost-flat trend from 2005 to present.
Interesting thought: people who are in the market for approximately-5-year-old used cars are now seeing that decline in new car sales.
Still, there's been more volatility in the used car market after Cash-for-Clunkers than in the new car market. And the used market changed from the 90s to the present. Mostly because the Detroit 3 manufacturers pushed hard on product quality and longevity. (See Billy's comment above about expected durability.)