Eric's Autos: Buy Gold? Buy a Used Car Instead!
Meanwhile, the cost of new cars is rising like Hugh Hefner's member, due largely to government-imposed technological solutions to non-problems such as people backing their cars over small children (back-up cameras for everyone!), high-pressure direct injection, turbochargers and aluminum rather than steel bodies (to squeeze out small MPG gains from cars that are now more expensive to buy and much more expensive to service) and elaborate countermeasure (e.g., automatic braking, automatic steering correction, lane departure warning) to idiot-proof the cars instead of expecting drivers to idiot-proof themselves... with more on the way. It has been proposed that new cars - all of them - be fitted with "passive" alcohol sensors and god-only-knows-what--else-they'll-think-up.
Point being, the cost of new cars is going to continue to rocket upward - while the purchasing power of the average American (as distinct from his ability to qualify for debt) has not. A point will be reached - probably sooner rather than later - when the proverbial bubble finally bursts.
When it does, the value of used cars is going to go into full afterburner. Because people will still need to get around. They just won't be able to afford new anymore. The smart ones have already exited the lunatic asylum ... before the stampede. Which is what makes them smart.
There is still time - though probably not much. If you burrow into the data - the real data, which means not the stuff the government cherry picks but the real data as compiled by honest economists (like Paul Craig Roberts, see here, for instance) you will find more structural rot than the floorpans of a rusted-out Pinto. Something like 23 percent of the potential workforce is unemployed - with about 12 percent of them (not included in the "official" stats) no longer even looking for work.
They cannot afford a $800 monthly payment on a new turbo-Ecoboosted (and aluminum-bodied) Ford pick-up. Which explains, probably, why sales of the new turbo-Ecoboosted and aluminum bodied F-150 are down by 8-10 percent and why Ford has had to resort to dangling thousands of dollars in "incentives" to entice dubious (and increasingly cash-strapped) buyers. But they can afford a $10,000 used truck - or a $5,000 used car.
Which is why - very soon - the price of such rides is going to increase in a big way, just as they did post cash for clunkers. Only this time, the supply is even smaller (thanks, Uncle). Better hurry!
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www.ericpetersautos.com or EPeters952@aol.com for comments.
