Monday, May 12, 2008

Car thoughts 5/12/2008

With the range of topics on this blog, it appears I may need to start a new blog just for cars as this topic has become increasingly interesting to me over the last few years.

My history with cars over the past few years has been quite the ride. The first car I ever drove regularly was a 1993 Ford Taurus, ubiquitous in those days, and I used it to go back and forth to school when I had a license. My family switched to Japanese cars when it became clear that American cars were having a lot of quality control issues, so in 1996 my parents bought a Honda Accord. That would be the first of many Honda purchases throughout the years for my parents, myself, and my older sister. Altogether, the family Honda purchases included:

  • 1996 Honda Accord 25th Anniversary Edition (why they chose to call this a special edition is confusing; it was stripped down with zero power options)
  • 1998 Honda Accord LX (my mother's second Accord when my sister and I were both in college but home frequently; the 1996 Accord became shared amongst the kids)
  • 1999 Honda Civic LX (my older sister's leased green econobox when she needed her own commuter car)
  • 2002 Honda Accord LX (my sister's upgraded leased econobox)
  • 2003 Honda Accord EX-L (my first brand new car purchase)
  • 2006 Honda Accord EX-V6 (my second and last brand new car purchase; traded in the 2003 for it)

I realized quickly after buying the 2006 Honda Accord that the payment was very high for an economy car (albeit a really nice, loaded one) with an awesome engine that was Acura-worthy (Acura being Honda's luxury division). While it was certainly a car I could have kept for years, I had an epiphany while driving around this nice new car after a couple of months constantly worrying about paint chips and the tiniest door dings: why did I want to buy new when there were so many great used cars out there? It was clear I wanted a lot out of a car and I simply wasn't able to afford what I really wanted - a luxury car that had a classic driving feel and exterior. Or could I?

A friend of mine had been pushing German cars for some time. He had been down the Toyota route, as had his family for years before he began driving, so he naturally assumed Toyota was the best and not to "waste money" on a used luxury car. But when delving deeper, he found that Honda/Toyota kept their value much better than many brands out there, making a used purchase more expensive than some other worthy (even luxury) brands, but they also had their share of problems. No car company makes a perfect car, but many car companies these days make very reliable cars with engines that will last for years or even decades when treated properly.

My friend's budget was pretty low as he was still in school, but he decided to have a little fun with a BMW 325i coupe from 1991. This was in 2004. He grew up in Maine but was living in Virginia, and at first snow, this rear-wheel drive German car with no traction or stability control handled the snow extremely well because he had learned how to handle that type of car in snow. While most Virginia residents were staying off the roads and the plows hadn't come, this guy was having the time of his life out there on the road with his new toy. The car, of course, was 13 years old and inexpensive to buy and maintain. But when I got into the car I found it to be tank-like in feel, and it seemed to have maintained its classic door "thunk" upon closing as well as a classic interior that aged gracefully.

I spoke to him about the idea of selling a brand new car I had bought only six months earlier, and while he didn't want to tell me what to do, per se, he geared me toward a few options he figured I'd like based on my climate (northeast), preferences (slightly luxury over performance, but ideally both), and budget. I was able to get a great price for my car to sell it to a private party, a car which I felt I was paying too much to drive, and ended up spending about $7,000 LESS for the following:

2000 Mercedes-Benz E430 (8-cylinder) 4Matic (all-wheel drive), completely loaded with navigation, original sticker $75K, with 74K miles. Price when I purchased it in 2006 - $19K.

Of course the car was far out of warranty but if you read my car care article, you'll know that the best warranty is to keep oneself informed and in the good graces of a qualified mechanic. I had a lot of fun with that car and it was a pleasure to drive; unfortunately, it was totaled six months later by an idiot who rear-ended me on the highway. The hunt was on again, but as I felt I had been cheated out of an experience to own what I felt to be a great car, I went back to the same dealership to see if they had another like it. This time it was a six-cylinder all-wheel drive Mercedes E-class, same mileage as when I had purchased the E430, and it was two years newer. With rising gas prices I wasn't going to complain about losing the two extra cylinders. I paid $3K less than I had six months prior for the E430. I realized that before I had bought the E430, I had been paying much more for a vehicle that, while brand new, didn't stack up at all in terms of features to a car that was six years older. The newer E-class was only four years older than the Accord, but still beat out the Accord in terms of luxury, driving feel, and performance.

The caveat here is that people like to know they are covered with a warranty, which is especially important if you run into a lot of trouble with a car, or a lemon. For example, we had purchased a Volkswagen Passat wagon for my wife a while back and it ended up causing us more trouble than it was worth, so at least we know what brand/model to stay away from in the future, as much as the VW was a joy to drive. I still believe the potential risk involved in buying a used luxury car is outweighed by the fact that one would have a superior vehicle which is usually more safe than some of the brand-new econoboxes out there, both in frame strength and general safety features (stability control, traction control, airbags). There are so many used vehicles out there, particularly in heavily-populated areas, that it's like being in a candy store when car shopping. Throw in a qualified mechanic to perform a pre-purchase inspection for the car you feel may be right for you, and suddenly you're driving a luxury or performance car for well under $20,000. By comparison, a top of the line Honda Civic brand new can reach about $20,000; the Accord will easily fetch more than $20K if you want decent features.

The engines in cars like Mercedes, BMW, Lexus are almost always six-cylinder and will last a very long time if cared for properly. If you care about what you drive and it needs to be more than just an "A-to-B" conveyance, look carefully at used luxury vehicles.

No comments: