Nolan Walker

Is it better to buy a used car compared to a new car?

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The auto industry is but one of the industries in store for a VERY big correction in terms of business practices. Was Hertz owned by one of the automakers? For years the Big Three used rental fleets as a way to pump up their sales volume and the easiest way to do it was by owning the rental companies. Selling cars to yourself doesn't seem like a viable business strategy, but it worked to make, say, the Ford Taurus the #1 seller for many years in the '90s. Maybe that was the point, I don't know. Eventually, however, the Japanese at that lunch for them, too.

 

With the shrinking markets in every possible sector, automakers are going to get killed and some may not survive (does Fiat/Chrysler sell anything anyone wants other than Ram trucks and Jeeps?). It's going to cost a ton of jobs that were probably unnecessary anyway and I'm not sure how I feel about that. As with our own collector car market, I think the norm even five or ten years ago is no longer going to be viable in the future. In some ways I guess that's good, but we're running out of jobs for all the people who need them. There are only so many "service industry" jobs available. I don't know how to address that--it's not regulations, it's progress and the demand by consumers that everything be cheap.

 

I don't know where I'm going with this other than to be amazed by the huge volume of raw materials and product that's basically been dumped onto the market for so many years; now the bill has come due but nobody knows how to pay it. I think our parents and grandparents who lived through the Depression would be ashamed and horrified by our lifestyle, even if you don't live extravagantly. I know I throw away a lot of stuff and just replace it (I lose patience and trash a weed whacker about every year, for instance), so I'm not innocent, either. Maybe all this will make us all stop and reconsider how we live and our consume-consume-consume lifestyle.

 

Sorry, I don't know what I mean. I'm feeling particularly glum today. Carry on.

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Benefits of AACA Membership.

It seems that some here do not realize there are at least three different automobile auction venues.

1) Many know about the collector car auctions (BJ, RM, etc.). This is where well lubicated cusomers are heckled into bid (would be consided assault in some states).

2) Dealer auctions: these often have ginormous numbers of common cars that have been "wholesaled out". Rentals often show up here.

3) Specialty auctions like our local Sheriff's auction where old police and impound cars are auctioned off. These often have the lowest prices & sometimes have an interesting car.

These are in order of increasing speed and decreasing hype.

And then there is e-Bay and the online ilk.

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Posted (edited)

Matt, that is exactly what I meant when I said there are too many cars produced than can be responsibly consumed.  It’s a really big, big picture problem.

Edited by 39BuickEight (see edit history)

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Posted (edited)

Regarding Matt’s about everyone wanting cheap  stuff I believe that has at least a couple of causes.  Relatively low pay for most jobs that average folk have.  I know some are doing well especially “essential” workers today but in reality the service jobs have historically had lower pay scales than those where you “make” something. Then the Great Recession caused a lot of people to become renters.  And rents are rising almost everywhere.  Add to that the general increase in prices of things you really need(Covid prices have temporarily changed that but certainly will not be forever)and add tax increases(most governmental bodies never have enough, especially schools, It’s for the Children) there a continual erosion of buying power.  Thus in order to get the things they need and sometimes are culturally required(phones and tattoos come to mind) there is a continual push for lower prices.  And most have gotten used to the throw away society.  Hard to find replacement parts for and someone to put them in for a lot of things.  Plus the fact that corporations are constantly looking for the cheapest way to do anything because the future is no longer 20 years from now but is tomorrow mornings stock price and here we are.  Rant done. I could go on longer but I suspect most have stopped reading either in agreement or disgust.   

Edited by plymouthcranbrook
Stupid I-Pad (see edit history)
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My 401k is bouncing also, not concerned now just wonder where it will be in December. Prolly for the first time, being on a fixed income is not all bad.

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1 hour ago, padgett said:

My 401k is bouncing also, not concerned now just wonder where it will be in December. Prolly for the first time, being on a fixed income is not all bad.

 

I don't even look at my statement, I shred it when it comes. When hyperinflation kicks in [and it has to I will put all my money in a 5 or 7 year CD at the bank. I remember 1980 when interest paid by banks was about 17% and I believe that day is coming again. That will be when I pull out of the stock market forever. At age 63 my plans are to work another 5-7 years as I work in a low stress, no physical labor industry..

 

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Bought my house in '85 and was 12.75% then. Now have a 3% fixed mortgage mainly as a hedge against inflation. Have not understood why not already in hyperinflation but suspect the current downturn will prevent much of a change.

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I'm 100% in agreement with Matt's last post. I apologized for my last post, in which I indicated that I was an outlier for enjoying my ability to use things that most people would just throw away. Thank you Matt, I no longer feel alone.

 

My better half, Mary, is an old car gal. Sadly she can no longer see well enough to drive, but she still loves cars as much as I do. Both of us love a road trip. Whether we are taking a short jaunt, or going cross country we take one of our twenty five year old vehicles. Before we leave, both she and I decide which wrecking yards we plan to visit along the way. Whether we choose old car wrecking yards, the inventory in which have not changed in decades, or the Pick n Pull's, who's inventory is constantly changing, we always have fun. 

 

Each yard and each car tells a story. I think most of us on the forum understand the allure of good old car wrecking yard. For Mary and me the Pick n Pulls tell a somewhat different, and somewhat macabre story of modern day waste. Another layer of interest is the fact in the West we are almost guaranteed to find cars like the one we are traveling in. Often times it is difficult to determine why a particular car got to this place. When there is no body damage, the paint still shines and the interior is good, it becomes a real head-scratcher. 

 

Today cars have progressed to the point that most are easily capable of lasting for a quarter of a million miles. The cost of professional shops make it difficult for many to see fixing as an option, but in my world anything can be repaired. To me disposal of usable items comes down to a cultural aversion to that which is old, or considered outdated. Maybe what we need is a dose of reality, or as Matt aptly stated "now the bill has come due but nobody knows how to pay it."

 

Bill

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Just a thought but at least for the foreseeable future I would rather drive my own car anywhere in the US other than flying.

 

Have always been a "fixer", is why I still have a 35 year old fridge that I bought new. Had to repair the cooling fan and periodically need to clean the dust out but no big. Do tend to get a new TV for the family room about every decade or so but interestingly a "cyber Monday" 75" 4k cost the same as an Admiral 25" in 1973. Still have a 36" Sony in a cabinet also bought new mainly because is almost 300 lbs. Only had to rewire and replace the belt on my Maytag washer (also 1985 vintage) once. Suspect my house qualifies for AACA.

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My family currently leases a 2018 Ford Edge...it's the first time my mom ever got to have a new car, and she's been on the road since 1970. We don't know what to do when the lease comes up. On the one hand, it's nice to have a car that we can trust, on the other hand, we're used to having a car that only runs when it wants to and we got to the point where we would only go as far as we could walk home from, because we had to,  more than once. We are afraid that in time the Edge will go the same way. 

 

The fact that we don't have a garage means that it's exposed to the elements 24/7 is also a concern.

 

It's actually an unusual feeling for me to get in the car and actually expect to get where I want to go without breaking down. I lived the first 34 years of my life never experiencing that.

 

Every car we've ever had we used until it quit running. Because my dad was a mechanic and cheap, he refused to spend more than $400 for a car, even in 1999. So we always ended up with junk that barely worked, if it did at all. He dragged them all to the scrapyard when they were done. 

 

Unfortunately my health doesn't allow me to work on cars or even drive so we have to pay someone to do the maintenance. 

 

I'm leaning towards keeping it, because it's so comfortable and it is known...we know all about it because we put all but 6 miles on it. Every other car we've had we were the 3rd owner at least. We have had it since July 2018 and have already made some great memories in it, including driving out to Illinois and ending up on Route 66, a long time dream of mine.  But I also don't know if that's the right choice, I'm really conflicted. I love the Edge but I don't want to have another Jeep experience.

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All I can say is "it depends on the situation". With about 1/2 day prep I'd take any of my cars (project car would probably need a day) up the pike, make a right at Wildwood, a left at Lake City, and on to LaLaLand. Of course I also carry about 100 lbs of spares and tools so often select for luggage space.

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" we're used to having a car that only runs when it wants to and we got to the point where we would only go as far as we could walk home from, because we had to,  more than once. We are afraid that in time the Edge will go the same way"

"Every car we've ever had we used until it quit running. Because my dad was a mechanic and cheap, he refused to spend more than $400 for a car, even in 1999. So we always ended up with junk that barely worked, if it did at all. He dragged them all to the scrapyard when they were done."

 

Billy we could be Kin. My Father was the same way. Bought fairly good cars cheap, then ran them until death did them part.  I'm almost twice your age but I know your pain.

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Most people dont take the time to buy a car, its usually an impulse buy. If you do your homework and are not in a hurry you can safe a ton of money. What absolutely grinds my gears are people that buy on what they want their payment to be; you get raked over the coals every time! I always enjoy haggling with the manager (I hate sales people that have to run to the manager for every offer). Couple years ago I bought a $65k pickup (sticker price) with 5k miles for less than half the sticker price. Oh I forgot to mention it didn't have a straight piece of sheet metal on it because of hail damage but it's an aluminum body so it wont rust anyway. It also helped that I walked in on December 30th and they wanted it off the books before the end of the year. I don't worry about dings in the doors at Walmart actually it might pop 3 other dings out!

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I agree, dealers don't like people like us because we already know what he paid and salesmen usually have not a clue when we start talking options and spec.. While the end of Dec. is a great time to buy any car, the end of any month is also a good time.

 

That said these daze are odd. It is almost like people are advertising but do not want to sell or are afraid to sell. Am sorta vaugly looking for either a C5 Corvette Targa with a manual trans or a Caddy XLR. Most still have pre-disaster prices and few seem to want to even reply to an e-Mail. Of course my first question is what is the VIN. Anyone know what is going on?

 

OTOH on advt has a shot of a Chilton's manual (a plus ?) only problem is that the manual is for a different car.

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Posted (edited)

Here you go boys.....Hertz just filed for Chapter 11, the car sales start no sooner than 60 days from today. Numbers released, 35 Billion in debt. 14.5 billion on secured car loans. The car numbers.....a staggering 760,000 used cars coming up on the market. That’s twice what was being tossed around. Hang on to your cash..........there will be some killer bargains coming up. Hope the new and used car dealers can take the pounding to the value of their inventory........or it will be an even bigger sxxt show.

Edited by edinmass (see edit history)

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Wow! With those numbers I guess the CEO will do ok with his retirement package, or will some investment advising company pick him up as an board member? 

 

Bob 

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Hertz filed for bankruptcy

 

Under a Chapter 11 restructuring, creditors will have to settle for less than full repayment. Its biggest creditors are banks, but the filing lists IBM, Lyft, United and Southwest Airlines as others owed between $6 million and $23 million each.

 

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Hertz doesn’t own the cars, they lease them. Thus the 19 billion is corporate and the 14 billion is the leases. The cars are not owned by banks, but private equity companies. It’s kind of a strange situation, I can’t imagine them successfully coming out of chapter 11 with a debt load like that. They have been over leveraged since 2005.

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In a normal setting wouldn't those cars all be rotated out and sold off anyway?  What it does mean though is that's 760 000 that the manufactures likely won't be selling this year.

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I think that would be a "trickle down" bankruptcy. Only small fund investors will get hurt to a noticeable level. And the small supporting companies.

 

Nothing really changes but the date.

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