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A Forgotten Reason Why Car Sales Will Never Fully ‘Recover’

How old is your car? Mine was made in 1994 and now has close to 190,000 miles on it. Sure, it’s a Jeep Cherokee — the non-grand model — that is noted for durability, but cars today last longer than they used to. People who prefer buying new cars may once have traded them in every three years, but now often keep them for five or six years. And car manufacturers and financers have helped make this trend happen.

I remember when it was common to trade in a car at around 30,000 miles, because that was when tires, brakes, and ignition parts — and possibly the battery and other key items — needed replacing. This is no longer true. High-energy, computer-controlled ignition systems have made the traditional tuneup service, once performed every 12,000 to 15,000 miles by conscientious car owners, a thing of the past. Now you replace your air filter that often, but your spark plugs, spark plug wires, and distributor cap and rotor (if your car even has these last two items) typically last 50,000, 60,000, even 100,000 miles.

New car loans used to last two or three years. At the end of the loan, many people routinely traded in their cars, thinking, correctly, that getting a new car every few years was a good way to avoid maintenance hassles and expense, not to mention reducing their chance of getting stranded due to a breakdown to nearly zero. Then car loan terms started to stretch out. Four-year and five-year new car loans started to become common, and I’ve even heard of a few six-year ones. These extended loans tended to make people less likely to replace a car after the traditional three-year period. After all, they figure, if the car companies and banks think it’ll last long enough to get through a five-year loan, who am I to disbelieve them?

With a few notable exceptions, like the Chevrolet Cavalier, car manufacturers have managed to keep that implied promise. The expected useful life of a car, once 80,000 to 100,000 miles, crept up to 120,000 miles, 150,000 miles, and in some cases (like my Jeep) 200,000 miles or more. Where someone might once have boasted about owning a Honda Civic (another notable long-lifer) that had 120,000 trouble-free miles on it, nowadays a 200,000-mile odometer reading is hardly worth mentioning.

If people who buy new cars start keeping them for an average of six years instead of three years, it’s obvious that you can only sell each new car buyer a car half as often as you did back in 1960 or 1970. Foreign, domestic, big three or whatever; when you have a car with a 10 year/100,000 mile warranty on major components, like my wife’s 2003 Hyundai, and it’s running fine after five years, why replace it? Why not keep it at least 10 years? And my Jeep, which I bought used in 2000, is now 15 years old and will probably last another two or three years, possibly longer, before I worry enough about reliability to think about replacing it.

I will admit that I am a medium-fanatic car maintainer, which is one reason I can suck more, and more reliable, miles out of a car than most people. I change oil regularly, keep an eye on the air filter and other replaceable items, and routinely replace all exposed rubber on my cars — including cooling system, heater, and brake hoses, and timing belt if it’s a car that has one — at least once every six years or 60,000 miles. Rubber parts are the cause of something like 90% of all unanticipated on-the-road breakdowns. My car maintenance expenses are a little higher than most people’s, perhaps, but I figure it’s a lot cheaper to budget $300 per year for preventative maintenance than to pay a $300 car payment every month. And yes, $300 per year is a rational maintenance allowance for a typical car that is maintained by a reliable independent repair shop, especially if you do some of the small and easy work, like replacing air filters, spark plugs, and windshield wipers, yourself.

Even without being a maintenance freak, most cars sold new since 2001 will give you six or eight reasonably trouble-free years of service.

So no, car makers, we probably won’t ever buy as many new cars as we used to. And if you decide to make cars that break down as often as most 1960s or 1970s cars did, it won’t help. We will simply buy another manufacturer’s product instead of yours.

3 Responses to “A Forgotten Reason Why Car Sales Will Never Fully ‘Recover’”

  1. Denis Baldwin Says:

    I’m with you on this. I drive a 1990 Mazda Miata with nearly 300k on the clock. My wife has a 96 Miata with 150k on hers. Both are paid for. Both have very minimal maintenance issues. Neither of us have a reason to trade them in, as they are both easy to maintain.

    I find that’s true of a lot of my friends. I have one close friend who used to get a new car every 2 years. He’s always get something nicer than the time before. These days, he drives a 2004 Honda Element that he claims, “I’m not going to trade in until atleast 2012.”

    Such a paradigm shift.. and a good one to me. I’m hoping the auto industry takes the hint by innovating. If I have good reason (styling, economy, low cost of ownership, etc.etc.) in a new model, I might consider the trade. Until then, it’s a whole lot of the same, and no reason to change.

  2. Jody Weissler Says:

    I really think you are on to something here. I have a pre 2000 car that I have no immediate plan of replacing. I will never forget an econ teacher telling me that the key to his wealth (he was doing pretty well for a school teacher) was the fact that him and his wife had two cars that were quite old, but all he did was replace parts and not the entire car every few years.

    The biggest trend that could make people get a new car is a complete and shift away from our internal combustion engines and a move to an alternative system. The buy in has to affordable. Tesla’s don’t count. (yet!!)

  3. Will Hill Says:

    Your 30,000 mile car replacement mindset is shockingly wasteful. Our 1996 Civic is still trouble free, gets good milage and looks good too. American cars of the same vintage are in the junk yard or should be. The interiors rot after 5 years and make many dangerous distractions, milage inevitably goes to less than 20 MPG and some models aim for 8. I can imagine people wanting to replace such a thing after 3 years, but am shocked that was ever considered reasonable. I’ve owned Honda motor bikes and cars for the better part of 20 years. They don’t leak and the rubber parts of of substantially higher quality than US parts. Something is terribly wrong with American car makers for them to have been so soundly beaten by foreign competition. If what you say about American car buyers is true, something was profoundly wrong with them too.

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