Rethinking Used Cars
In the past, I have written several articles extolling the virtues of bargain hunting for used cars. However, for teenagers my thinking was even more hard-core. My jaded attitude was one of experience. I trashed everything I ever drove.
Furthermore, teenage drivers will get in an accident. It is a Law of Physics. There will be a fender-bender. Your kid will back into something. They won’t look while changing lanes….or worse.
According to the US Department of Transportation, licensed drivers between the ages of 16 and 20 represent 5.3% of all drivers. However, they represent involvement in 34% of all fatal accidents. Drivers between 21 and 24 are not much better.
Knowing this, I figured it would be better if teenage drivers got a used cop car with 100,000 miles of abuse on the odometer and a big brush guard on the front. At least then, when they got in an accident, they wouldn’t be trashing a brand-new car.
And then a phone call from my 85-year-old father changed the way I looked at the situation.
My dad called wanting to buy a new car. I was a bit shocked. At his age he didn’t do much driving anymore and his 12-year-old Toyota Avalon still had lots of life left in it.
However, the conversation that ensued was instructive for all drivers—especially young drivers and senior citizens.
My dad recognized his driving skills were not as sharp as they once were. As he talked, I could see his brain logically assess how to neutralize the risks he was facing. He wanted a car equipped with newer safety features.
Unlike a teenager, I could tell that my father was thinking very clearly and rationally.
My dad knew that while living in Texas it is easy to get caught in a storm. Having all-wheel drive was a significant improvement over a rear-wheel drive car. In driving a friend’s vehicle during a torrential downpour, there were several times in which the car started to hydroplane. However, the all-wheel drive system did a masterful job of transferring power to the necessary wheels which allowed the car to stabilize and minimize the impact of the water on the road.
Next, he wanted adaptive cruise-control and adaptive braking. These would allow his car to maintain a safe distance from the one in front of his. And if a quick braking maneuver was needed the car could react much faster than my dad.
Of course, my parents thought a backup camera would be wise given their long driveway.
My dad also liked Bluetooth hands-free ability for his cell phone and the heads-up display on the windshield.
As my dad rattled off the list of options he wanted, I asked him if he was prepared to get a 30-year mortgage to acquire his new ride. To me, it seemed like an expensive list. And then I began doing some research.
A friend of mine had a top-of-the-line 2016 Mercedes equipped with these features. His car sold new for more than $100,000.
However, technology is deflationary—meaning the cost of technology declines despite the fact that technology continues to improve. As such, I wasn’t too surprised when a client of ours purchased a new Subaru…and it was equipped with all these features.
You can find similar safety features on many, if not most, newer middle-of-the-road vehicles. As such, what was once reserved for very high-end vehicles has now become mainstream.
That has forced me to think about my parents, a 16-year-old, or myself, behind the wheel in a world that is ever-cluttered with distractions from friends, cell phones, kids, dogs, stereos, etc.
Maybe the tightwad in me is loosening up a bit. From an investment perspective, how do you effectively balance the cost of these extra safety features against the cost of a few extra thousand dollars? I am not sure you can.
Although I am sure I will continue to scour the internet for used car “deals,” this process has certainly made me realize you can’t take the “low bid” when it comes to the safety of your loved ones.