Archive for Sunday, March 20, 2005

When used-car shopping, look for out-of-fashion model

March 20, 2005

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I'm thinking of becoming a car columnist. Or a "used-car" columnist. The subject draws more comment from readers than just about anything else.

And it runs the gamut. New-car lovers think my keep-'em-running-'til-they-croak sermons offend Americans' core values and threaten the economy. "Get a life," one wrote.

I'm flattered people think I have such clout, but I'm sure America's car-marketing juggernaut will flourish no matter what I say.

But most of the people who respond to these columns are co-religionists, members of an underground support group telling me to stick to my principles and keep my '95 Sable wagon going until it's gone. Thanks, folks.

After my last column on my latest repair dilemma, one reader became my newest role model by reporting that she'd owned just two cars in more than 40 years of driving.

Before I get to my real purpose today -- a nifty used-car purchasing tip -- here's the update I promised last week:

The pro at the car-electronics shop diagnosed my Sable's problem as a flaw in a $300 engine computer. This makes the car less efficient in top gear, but the difference is too little to notice -- and leaving the old computer in there won't do any harm, according to my new best friend, Bob. Leave it alone and save $300, he said.

Unfortunately, this diagnosis cost $285, but Bob took the sting out by telling my worried wife that 90,000 miles is "nothing." So the Sable came home in the same condition it left.

Anyway, I stumbled across a really appealing tip about used-car shopping: Turn the common wisdom on its head.

"Clearly, if you are thinking of buying a new car, you want to buy one that will retain its resale value as long as possible, and therefore you would avoid those cars that depreciate quickly. ...

"On the other hand, if you are shopping for a used car, that is precisely the kind of car that can offer the best value."

This comes from "What Your Car Really Costs: How to Keep a Financially Safe Driving Record," an excellent 140-page book published by the American Institute for Economic Research in Great Barrington, Mass. (Order for $6 at www.aier.org or (413) 528-1216.)

The gist is that you should look for a model with a relatively good reputation for reliability and quality. But it should be one that not many people want.

How can this happen? Because the car industry is mainly about fashion. If the fashion gurus say blue jeans should expose half your rear end ... well, that's what the image-conscious will buy. Same with cars -- some perfectly good models simply fall out of fashion.

Suppose, for example, that you were in the market for a good 3- or 4-year-old station wagon.

According to the AIER book, the 2001 Volkswagen Jetta Wagon was high on the list of value-holders. In April 2004, these 3-year-old cars sold for 72.6 percent of their original price, $18,600. If you'd bought it in 2001 and wanted to sell it, that would be great -- you'd have got about $13,500.

But in looking for a used-car deal in 2004, you'd have been better off with a Mercury Sable like mine. In just three years they'd lost 60.4 percent of their value. They cost $19,185 new; three years later, they went for $7,597 -- just over half what you'd pay for a Jetta of the same vintage.

Yeah, I know, the Jetta may be a better car. But twice as good?

No way.

Get the book. It's full of stuff like that.

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