During the Christmas break my father (who will turn 75 this May) went looking for a new vehicle. We spent an afternoon driving to various dealerships looking at all manner of cars, trucks, and SUV's. It's truly amazing to see the market price differential that exists between such similar vehicles. I've come to believe that people drive their "egos". When they want whatever they want, they must be willing to pay the price demanded by such a vehicle.
This is what I observed:
Purchasing a vehicle is a lot like making any long term commitment such as buying a house, making an investment, or getting into a relationship. We all have criteria that fall into the categories of needs and wants. Some make commitments early, some late, and others don't commit at all. Some choices depreciate faster than others, some retain their value for a long time. Some selections are dependable, while others are high maintenance (your mileage may vary). Features such as reliability, low maintenance, and attractiveness must be carefully measured as all three would be nice, but we are lucky to find two (balance in ALL three categories is incredibly rare).
It's best to take one's time when selecting a long term commitment. Saving up and paying cash gives one incredible confidence and bargaining posture (it's like getting into shape). It takes time and effort to save which puts things into perspective when it comes time to spend. Those who spend quickly or leverage debt often place their desires before their needs which can turn out to be an expensive lesson down the road. Do your homework, don't give in to pressure, and when you are ready all will fall into place.
Ultimately, my father was able to secure a good deal and drive home in something he will be happy with for the rest of his life.
This is what I observed:
- Dealerships are packed towards the end of December with consumers vying for year end bargains.
- Used vehicles tend to offer the best values by far as long as they have been well maintained with little to no signs of wear and tear.
- Dealerships with the longest track record of vehicle reliability can command a much higher premium as past performance is a good predictor of future reliability.
- If trading another vehicle in, it is best to wash, vacuum, repair, or correct any defects that might reduce dealer appraisal.
- When negotiating, be prepared to walk away. Things like necessity, affordability, and desire may affect your decision.
Purchasing a vehicle is a lot like making any long term commitment such as buying a house, making an investment, or getting into a relationship. We all have criteria that fall into the categories of needs and wants. Some make commitments early, some late, and others don't commit at all. Some choices depreciate faster than others, some retain their value for a long time. Some selections are dependable, while others are high maintenance (your mileage may vary). Features such as reliability, low maintenance, and attractiveness must be carefully measured as all three would be nice, but we are lucky to find two (balance in ALL three categories is incredibly rare).
It's best to take one's time when selecting a long term commitment. Saving up and paying cash gives one incredible confidence and bargaining posture (it's like getting into shape). It takes time and effort to save which puts things into perspective when it comes time to spend. Those who spend quickly or leverage debt often place their desires before their needs which can turn out to be an expensive lesson down the road. Do your homework, don't give in to pressure, and when you are ready all will fall into place.
Ultimately, my father was able to secure a good deal and drive home in something he will be happy with for the rest of his life.
Grilling out with the 4Runner. I purchased it with cash 10yrs ago this month and it still makes me happy.
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