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Old 2010-04-24
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Exclamation The High Cost Of That New Car Smell

NMA Article: The High Cost Of That New Car Smell



By Eric Peters, Automotive Columnist


Turns out high quality and superb reliability are not such good things – for the car companies, anyhow.


The word is out that you don’t have to sign up for five (or six or seven) years of crushing monthly car payments — plus the insurance, plus the property taxes — on a brand-new car in order to drive a trouble-free, looks-like-new car. Because today’s used cars are that good.


Because today’s new cars are that good.


After a solid quarter century of really working at it, the automakers have achieved the Nearly Indestructible Car. The make/model hardly matters. Treated even semi-decently, most any car built after about model year 2000 can be counted on to go for 200,000 miles or more of mostly trouble-free driving. The best ones are barely broken in with 50,000 miles on the clock. Clutches that once burned up in three or four years now last 10 — or even the lifetime of the vehicle. Engines are built to such close tolerances and with such precision that they still feel as tight after eight or ten years of service as they did the day they were first fired up.


It is truly miraculous.


And you can buy such a four-wheeled miracle for half the price of a new one — and enjoy almost all of the perks of the new car with virtually none of the former downsides of buying used. (Ok, you may have to accept a stain on the carpet.)


It’s an ironic — and economically devastating Catch-22.


For years, Detroit especially was relentlessly hectored about new cars that began to smoke and use oil at 40,000 miles, paint that faded within three years of leaving the dealer’s lot and bodies that began to rust before the final payment was sent in.


Well, they fixed all that. Problem (for them) is they’ve undercut 90-plus percent of the reason for buying a new car.


And it’s showing.


Even before the economic implosion, new car sales were stagnating — while the number of used cars in circulation was increasing. Partly, this is because used cars just last and last and last.


Go back to the ’80s and before and it was fairly rare to see a car more than about ten years old still in service as a daily driver — because by then, most were unreliable junk and ready for the crusher.


Today, about a third of all the cars on the road are eight years old or older (according to AAA) and still going strong. Cars 12-15 years old with 150,000-plus miles are everywhere. And they still have plenty of life in them. Like the Energizer Bunny, they just run and run and run and run.


Is it any wonder that people are holding onto them? Especially these days, when any sane person not already a member of the plutocracy is being very careful about spending money they don’t absolutely have to?


The men and women inside the car industry know the situation — but how to fix it? They can’t very well start making crappy cars again. It would just give people yet another reason to hang onto Old Faithful indefinitely.


Making new cars a better deal, financially, would definitely help — but that, too, has become an impossibility. It’d be great if you could order a new car and skip the airbags, for example — and save yourself about $2,000 off the sticker price. But Uncle Sam won’t allow the automakers to do that. The government would rather see the automakers go bust than allow them to make economically sensible marketing (and engineering) changes to their products.


Localities that hammer new car buyers with confiscatory property taxes (which can be $1,000 or more every year for the first several years if the new car in question is a high-dollar one) aren’t going to ease off, either.


Neither will the insurance companies — which make the most money writing full-coverage policies on heavily leveraged new cars — not older, paid-for cars whose owners can choose a bare-bones liability-only policy and save themselves thousands of dollars.


So, there’s no good way out of this thing — not for the automakers, at least. The assembly lines could be turned off completely for the next ten years and it would have very little meaningful effect. Transportation would not be impeded; vast sums would be saved. Only that new car smell would be missing.


And for more and more of us, that’s just not worth paying full freight for anymore.


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The High Cost Of That New Car Smell


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