Financial Impact: New vs. Used

[Hokiefyd]

This question stemmed from a discussion I had at work a few days ago with a co-worker. What is the financial impact to a new automaker when a used car is purchased? He said there isn't one; they don't get any money from your purchase. I quipped that there surely is one, but I couldn't calculate it.

Directly, he's right. Ford doesn't get any money when somebody buys a used Focus. But indirectly, there has to be a value to Ford from that purchase. That consumer will tend to buy X number of Ford Motorcraft parts. That consumer will tend to get that Focus serviced at a Ford dealer X precentage of the time. With that used car purchase, resale values are maintained, possibly elevating the market value of new Fords.

Has anyone come across a study on how much a used vehicle purchase supports a new vehicle manufacturer?

 

[eljefino]

If the used car sells quickly and for good money the seller is more likely to buy that make in the future.

In-house financing/leasing agencies also care about residual values. When they warranty certified used cars they also care about how well built they'll be for the 2nd owners.

 

[CivicFan]

As far as the parts go, it doesn't matter if it's the original owner or someone who has bought the car used - they are going to purchase a part and the chances of it being Motorcraft are the same.

The only benefit I can see for Ford is that the proceeds from the used car help keep their dealerships open thus lessening the burden on new Ford sales.

I'm sure the manufacturers have done studies like that because they want to sell new cars. Someone at some point might have suggested to build cars that do not last long so that they increase their new car sales.

 

[sciphi]

If a franchised dealer is selling the same make used car, it benefits the dealer.

People will buy parts for it, and those OEM parts cost a bunch. There are also certain things that only somebody with dealer-level scanners can do, such as reset airbags or check ABS codes on non-Detroit nameplates.

The makers want you to buy a new car. They also want a good reputation for building reliable, durable vehicles. So it's a balancing act between building pretty junk that falls apart 2 months after sale, and building a tank that'll last for a lifetime.

 

[eljefino]

Originally Posted By: CivicFan
Someone at some point might have suggested to build cars that do not last long so that they increase their new car sales.


One needs to be careful with planned obsolescence so the buyer does not feel betrayed by the car. So the issues need to be telegraphed to the driver that they're his problems and not ones of design. Design the car so its powertrain doesn't strand anyone but instead interior stuff breaks, courtesy bulbs burn out, maybe a power window goes out. Maybe a check engine light that could be blamed on bad gas.

 

[berniedd]

Word of mouth endorsement is pretty hard to beat. A good car will encourage brand loyalty anywhere.

 

[exranger06]

Originally Posted By: eljefino

One needs to be careful with planned obsolescence so the buyer does not feel betrayed by the car. So the issues need to be telegraphed to the driver that they're his problems and not ones of design. Design the car so its powertrain doesn't strand anyone but instead interior stuff breaks, courtesy bulbs burn out, maybe a power window goes out. Maybe a check engine light that could be blamed on bad gas.

You really think certain parts of cars are purposely engineered to break after a certain amount of time?

 

[eljefino]

Originally Posted By: exranger06
Originally Posted By: eljefino

One needs to be careful with planned obsolescence so the buyer does not feel betrayed by the car. So the issues need to be telegraphed to the driver that they're his problems and not ones of design. Design the car so its powertrain doesn't strand anyone but instead interior stuff breaks, courtesy bulbs burn out, maybe a power window goes out. Maybe a check engine light that could be blamed on bad gas.

You really think certain parts of cars are purposely engineered to break after a certain amount of time?


Absolutely! I'd check the expected life of all the goofy interior bulbs vs the tail light ones for starters on a site like danielsternlighting.com. Plastics can have a certain amount of sealers/preservatives so they dry and crack at a predetermined time. Driveline parts are also warrantied by the supplier to the OE to last a certain amount of time.

 

[exranger06]

Pretty much everything in this world has a finite life expectancy and nothing is built to last forever. Vehicles definitely have a finite life expectancy of I believe roughly 20 years or 200k miles. So if a part is engineered to last only about 20 years, then that's fine with me. But I seriously doubt they engineer parts to break after 5 years or 50k miles to force you to replace them during the vehicle's life. I think cars do a pretty good job of breaking themselves without anyone else's help.

 

[hattaresguy]

Mercedes supports parts for just about every car they have ever made, and seem to make pretty decent money doing it.

Now they have the Classic Centers which can restore an older Mercedes for you if you are so inclined.