We used to call it 60-80. You could buy a two-year-old used car with 80
percent of it’s life left for 60 percent
of the new car price.
We used to call it 60-80. You could buy a two-year-old used car with 80
percent of it’s life left for 60 percent Then, as Detroit & Co.
started to overproduce ad nauseam, the ratio went down to 50/80.
Then 40/80.
These days you can pretty much
buy a decent two-year-old car (think discontinued Ford, Mercury & Buick
models)
for about 35 percent of it’s new car price without dickering too hard. So,
is that the sweet spot in today’s market?
Nope.
At least not for the non-enthusiast.
The biggest bang for your buck lingers a little further down the curve.
Specifically the five to six-year-old commuter vehicle with about 75k miles
that has become as popular as an old
can of buckwheat. Think Ford Taurus, Buick Regal/Century/LeSabre, Mercury
Sable and virtually anything with the
name Oldsmobile on it. Sure these are the equivalent of leisure suits for
the self-effacing car snob.
But I’d be damned if they aren’t the best deals for those who, in Rhett Butler-speak,
“Frankly, don’t give a damn shit.”
Manheim Auctions currently estimates
the retail value of a 2002 Ford Taurus SE with 75k miles right at US$3100.
I would say it’s closer to $3500. But even so, your mom or music teacher would
still have a vehicle that can go another
10 years and 120k… so long as it’s well maintained and conservatively driven.
A ‘mom & pop’ car if you will.
Depreciation works out to about $20 a month. Ironically, the same exact price
I pay for a basic celphone.
Insurance for these cars is also
dirt cheap, since the only way these types of cars will be ‘Gone in 30 seconds’
is if Mayor Bloomberg or Rick Wagoner become president in 2012. Maintenance
and parts are also very reasonable;
their makers cranked-out a billion engines and transmissions. Finally, your
mom or music teacher should be able
to invest the $5000 to $7000 saved in something that will deliver a reasonable
return over ten years.
Perhaps a pawn shop specifically
for musicians, or dual citizenship in a country that doesn’t debt itself
to death.
I’m thinking Costa Rica.
