A Metric of Desperation

  • November 17, 2023

We got what lots of people are getting in the mail the other day: A letter from a new car dealer pleading with us to sell them a car:

“Due to severe supply chain disruptions in new vehicle production, we are desperate for inventory,” the letter begins. We need to purchase your vehicle. We would like to acquire 78 used vehicles by Thursday, November 30th to increase our pre-owned vehicle inventory.Great news, your car qualified. Regardless of condition, we can pay you up to 30 percent ABOVE book value.

Italics added. ALL CAPS and bold as in the letter.

When a dealer begs you to sell them a car – regardless of condition – you know they’re desperate, alright. But it’s not because of “supply chain disruptions.” I return to the letter, which goes on to “offer a brand new Chrysler, Dodge, Jeep or RAM of your choice.”

Come again?

The letter begins with a spiel about the “disruptions in new vehicle production” – which presumably would mean not having a sufficiency of new vehicles available to sell the person who responds to the letter by offering to sell the dealer their used vehicle. But if the dealer hasn’t got a new vehicle to sell, what is the former owner of the used vehicle sold to the dealer supposed to drive?

In fact, the “disruption” is in used vehicle inventory.

The alternative to a new vehicle for people who do not want to pay for one and for those (growing in number) who do not want to pay for the features that are becoming all-but-unavoidable in new vehicles, most especially the “assistance technology” that is in fact a kind of piece-by-piece usurpation of the driver’s control of the car. The more people understand that “assistance” is means supervision and (ultimately) control – the more people cling to their older vehicles that lack such “technology.”

Just as the smart set where hesitant to take the “safe and effective” drugs that weren’t (and still aren’t) vaccines.

New or used, dealers need to move inventory to make money. If the new isn’t selling – or not selling as well as they’d like – the slack can be picked up by selling used. Unless the dealer hasn’t got any.

Hence the letter of desperation.

It’s also a bellwether in that it says a lot about the state of things in both the new and used car market. Until recently, new cars were, generally speaking, more desirable – being new – while cars that were no longer new depreciated, or lost value, being less desirable. They had mileage on them, which is a tautology for less life left in them. They cost less because you got less – whereas the new car cost you more because it had its whole life ahead of it – and at least several years of warranty coverage to go along with it.

People paid more to worry less.

But that’s beginning to tilt in the other direction, in favor of used (that is to say, older) cars. They have been appreciating rather than depreciating – an astounding fact in view of the fact that we are not talking about especially desirable (as such) low-volume, specialty or exotic cars but ordinary cars.

Our old Toyota RAV4, for instance.

By the standards of 2005 – when it was new – it was nothing special. But by the standards of today, it is very special, indeed – in part because it has a manual transmission (all new RAV4s come only with an automatic) and in part because it does not have a touchscreen or any “advanced driver assistance technology.”

It doesn’t even harass you for not “buckling up.”

And its engine doesn’t cut off at every red light, either.

The RAV4 keeps our secrets. It does not try to parent us. And for those reasons alone, it is preferable to a new anything else. And there are more reasons. It has a simple, non-turbocharged engine that will never need a new turbo (or intercooler). It is serviceable by us, at home.

Same goes for our old truck (my ’02 Nissan Frontier). I bought it circa 2008 when it was only about six years old for about $7,000 and used compact-sized trucks like it were still commonly available.

I could probably sell it to a desperate dealer for $4,000 tomorrow but I’d be an idiot if I were to do that. For what could I get that’s new for $4,000 that would close to as valuable as a great-running old truck with a manual transmission that doesn’t have a touchscreen or any “advanced driver assistance technology”? That does have a throttle cable – and doesn’t pester me if I don’t “buckle up” for “safety”?

Four grand would barely constitute a down payment on a new truck – that would have a touchscreen, an automatic transmission and a whole array of “advanced driver assistance technology.”

Not for me, thanks!

And good luck, Mr. Salesman, finding others willing to part with what they know is worth more than anything new you’re trying to sell them.

. . .

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