10 April 2008

Best Cars For a Recession? Yikes

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OK, I saw this article today giving advice about what cars to buy, and I couldn't help but think this article is agenda driven. First off, this graphic says absolutely nothing about a Hyundai, which not only has the benefit of decent fuel economy but also costs under $8000 here in Vegas. Note that at least three of these vehicles use alternative forms of power and that only one of them is from a domestic automaker. Whenever you buy a car from overseas, you automatically have to pay the offset import fees put in place to protect domestic industry, meaning that you pay thou$and$ for the privilege of driving a foreign car that IMMEDIATELY depreciates.
Eight Cars to Drive in a Recession
Ford Escape Hybrid
Honda Civic Hybrid
Honda Pilot
Infiniti M35
Lexus ES 350
Nissan Versa Hatchback
Scion xB
Toyota Pri
When considering the concept of fuel, remember that how fuel is used matters. Smaller cars constitute a better bargain than alternative fuels, because it takes less fuel to power them. As for the Ford SUV, it's going to be very heavy and take more energy from the battery to move it. Also, if you're towing or demanding performance you're going to come off battery immediately. Oil remains the only combustion fuel capable of generating enough torque to run performance or handle loads. Plus, the benefit from hybrid technology mostly depends on driving habits and conditions than on the fuel useage matrix. Most of the people with whom I commute (23 miles one way) spend very little of the commute driving less than 25mph.

Some people will try to sell you on "saving the environment" or tax breaks for buying cars that are fuel efficient. First off, if you are not itemizing, there is no tax benefit to flex-fuel/alternative fuels, and I think the IRS has put a moratorium on that deduction anyway. On the other hand, as soon as fuel tax revenues fall off thanks to all of you who buy into that hype and buy hybrids to save money on fuel, our elected officials will raise fuel taxes and obliterate that savings. Meanwhile, you're thou$and$ in debt on a car you maybe didn't need or want but bought to "do your part". Be true to yourself.

Many of the cars listed are high end vehicles. If you intend on trading in your car (which I don't recommend) and want them to retain value, that might appeal to you, but when times are tough and you want to pinch pennies, you don't spend money for future potential. You would benefit more in a recession if you skimp on options. Do you need inboard navigation? A sunroof? Special rims? Rear spoiler? etc. In a recession, I'm inclined to keep as much money as I can.

Another overlooked issue is comfort in the ride. This is the primary reason why people I meet who know my car think I ought buy a different one. My 1995 Saturn SL1 is not very comfortable. At 6'0" I have a little trouble climbing in and out, and since it's manual transmission without cruise control on long drives my legs get tired. If you look at the Saturn Aura and Chevrolet Malibu (2007 model) which are incidentally clones you will note the molding around the doors differs slightly, making the Aura look sleeker at the cost of headroom upon entry. I doubt the comfort in hybrids and hatchbacks as well. None of the cars on this list that I have ever sat in were particularly comfortable. IN fact, the most comfortable car I ever sat in of late was the Chevy Trailblazer, which I saw on a Yahoo Autos article was rated one of the 10 worst cars to drive only because of it's fuel economy rating. At least it comes with towing and 4WD standard.

This brings us to the big picture. When you look at overall cost many of these cars on that basis are poor values. I've already addressed my own car shopping and how the Trailblazer comes with things standard that are upgrades on the higher rated Jeep Liberty. Does it really make sense to pay extra for things an off-road vehicle ought have or for things you don't really want? Factor in taxes, insurance, registration, and special costs (fancy tires, specific oil, repairs for complicated systems), and it may be cheaper in a recession to keep the car you already own. I know for myself, a periodic repair (even though I do most myself) costs me less than a monthly accounts payable obligation. Plus, my car is fully depreciated so my insurance and registration are the lowest they can be. It's a bare-bones, no frills means of transportation.

My father always said that cars are tools. After a while, your tools get beat up from use. Anyone who throws away a good tool on the auspices that it looks used is a fool. As soon as you use it, you're back where you started.

Beware of agendas. None of these are in an honest estimation a good vehicle in a recession.

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