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New Model Blues
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| Sometimes Waiting is a Good Idea |
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| Updated |
Jun 10, 2004 22:58:05 |
| Rating |
 82 ( -14 -17.07% ) |
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Description:
New Model Blues
Sometimes Waiting is a Good Idea
By Bruce Caldwell
Remember the excitement and pride you felt when your parents bought a new car: the homecoming trip, the slow parade down your street (hoping all your friends would see you), and the driveway display of the bold, new, Rocket Deluxe Motownmobile, or some-such. No one had to ask if it was new. They could tell by looking that it wasn't last year's outdated sheet metal.
A new car purchase, especially in the 'fifties and 'sixties was a spotlight event. It didn't matter if many of the underlying components in this trophy ride might be carryover; the exterior was new and distinctive.
Although major visual changes are infrequent in the nineties, many people still place considerable importance on getting the newest model as soon as possible. That's fine for ego gratification, but in terms of smart car buying, being first isn't always best. The lifespan of models and body styles can stretch five to ten years. When completely new models are introduced, the changes are often significant, which makes those new cars quite desirable, but it can also leave room for improvements.
Cars are like computer programs--no matter how thorough the testing, some bugs evade quality control. Manufacturers are quick to rectify any faults, but would you rather drive your new car or sit in the service department waiting room? Some "experts" will advise you to wait until the second year of an all-new model. That's the conservative approach. Our view is simple: use caution, and evaluate each vehicle on its own merits. Take note, however, we do not recommend buying cars that are among the first shipped. This approach helps avoid potential "start up" or "change over" assembly line problems.
Companies with outstanding quality control ratings are your best bet for first-year vehicles. The Mercedes ML320 sport utility vehicle is an all-new vehicle in a new market segment The company's superior quality standards, however, and extensive pre-introduction testing make the ML320 an excellent new model choice. The Lincoln Navigator is another new SUV, but it benefited greatly from the development of its sibling, the Ford Expedition. The Expedition debuted in 1997 as a low-risk newcomer due to its shared heritage with the well-proven F-Series pickup trucks. That same first-class pedigree was evident in the Chevy Tahoe/GMC Yukon lineage: the well-established GM Suburbans and pickups.
New model pricing can be negative or positive. The worst case scenarios are highly hyped models or ones where initial demand far exceeds production capabilities. Limited production sports cars usually receive a great deal of advance media coverage. This hype increases demand and inflates sticker prices. Examples include the Dodge Viper, Plymouth Prowler, Corvette ZR-1, and Acura NSX. Initially prices were padded by tens of thousands of dollars, yet after the 'buzz' subsided, the same cars could be bought below sticker.
Everyday vehicles like the Chrysler minivans had multi-thousand dollar second stickers when they were first introduced. After supplies caught up and other minivans appeared, prices came down substantially. The best way to win the new model pricing game is to find motivated, high-volume dealers. A hot, new model at close to invoice will save you several thousand dollars. Besides initial savings, you come out ahead at resale or trade-in time.
Vehicles with high initial demand usually stay popular, and yearly price hikes help counter depreciation. High initial demand translates to a strong used market value. Since the visual changes are minimal in this era, a first-year vehicle will look many years newer. If you sell before the next totally new model debuts, you'll profit. Buyers will pay more for popular used cars that look current.
The key strategies to avoiding "new model blues" are: study the vehicle's heritage; check quality control and customer satisfaction records; deal with a buying service that can find motivated, high-volume dealers; pick a very popular vehicle; avoid fad cars; hesitate on cars with radically different new technology (e.g. the previous generation of GM mini vans with their bonded, plastic body panels); don't buy the first vehicles to roll off the factory line; and sell at least one year before the next all-new model arrives. © 1998-99 All Rights Reserved, autobytel.com inc. & RBI Communications. |
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