My new van was $52,371 out the door.
Why did I buy new? Used cars, particularly minivans, are overpriced and under maintained. A used minivan with the specs I wanted had 75k miles, more than one owner, and cost $5000 less than a new one.
My 2020 Jeep Wrangler was a different story. That market made sense for used, as I found a 1 owner Jeep for $15,000 less than new. $28,000 for a 4 year old Jeep with 56k miles was a good deal. Still a stupid amount of money, but buying a Jeep is never a good financial decision…..I had an unused car to trade that helped cover the cost.
Let me tell you a recent experience I had in the minivan market.
While I was at a family reunion, I decided to scroll around on my phone and find some interesting inventory at the auctions for the next week.
I find a 2018 Toyota Sienna XLE with only 19,300 miles on it. Great condition. Carmax had retailed the unit and botched the title by recording the wrong mileage (100,000 miles). The current owners balked at the mistake, returned the vehicle, and so I decided to feature it at 48 Hours And A Used Car on Facebook.
I get a few interested customers within an hour. One agrees to bid up to $25k on the unit. So I send him a pre-purchase agreement and we get ready for the sale the next morning.
Before the auction he balks a bit and lowers his maximum bid price to $23,500. Sure enough, one dealer outbids us and the rest is history.
It reminded me of two realities in the consumer market. The first reality is that most folks really don't know the value of a vehicle.
All too often they will try to reference a vehicle bought way back when as the yardstick, and then complain about the market instead of studying what the market is right now. This poor guy spent a lot of time on the phone with me just turning back the clock, and it worked against him when it came to buying in the real world.
The other reality is even more tragic.
Too many people don't invest. They want 'the deal' instead of the car that will endure and be worth keeping.
THIS is a mindset that absolutely drives me nuts.
I tell many of my customers who are stuck in the proverbial mud of, "Can you find me a deal Steve..." that I'm not interested in finding deals. I'm only interested in finding a high quality car that has been well-maintained and offers long-term reliability.
Most cheap cars in the retail marketplace are $hit cars and the exact same side of the coin is true at the wholesale auctions.
I do get lucky sometimes. That same day I had a customer who was willing to pay $22,000 for a 2016 Lexus RC350 F-Sport. He got it for $19,100 on the block. But even if he had spent that entire $22k, he would have been very happy. Why?
Because the powertrain on that car will last another decade if not more with proper care. He already knew the history of that vehicle. He saw the difference in price between the wholesale market and retail which wasn't enormous. But still substantial.
Instead of buying something cheaper, he was willing to invest and buy something better.
Investing in assets versus getting the deal. Which one costs less in the end? Which one will make you happy in the long run?
The answer is obvious. I just wish more people out there valued facts and data over marketing and hype.
