- $1 billion Empire State Building IPO: why it won't be like Facebook IPO
- In surprise move, GOP leaders admit defeat in payroll tax battle
- More than 30,000 Germans turn out against anti-piracy treaty ACTA
- Does Obama blueprint reduce budget deficit fast enough? (+video)
- Pentagon budget: Does it pit active-duty forces against retirees? (+video)
- Murdoch media crisis deepens with five new arrests
- How Pinterest combines the best parts of Facebook, Tumblr, and Etsy
- US, China face 'trust deficit' as China's heir apparent visits
Sure, you can buy it. But can you afford to drive it?
Americans can easily spend $250,000 on cars during their lifetimes. But you can save big - with the right choices.
(Page 2 of 3)
"What consumers need to do once they absorb the shock of those big expenses is take a look at what the payments are on a new car," Mr. Gillis says. Though he says many people get the urge to buy a car every seven years or so - one reason cars per household began outnumbering licensed drivers in 2003 - that cost analysis might keep them in their vehicles a bit longer.
"The tradeoff is that you don't necessary have the latest in technology and you don't necessarily have the latest in safety," he adds.
Some of those advances are considerable. For example, stability control, reportedly now available in about 20 percent of new vehicles, can vastly improve handling. Others are niceties that improve the driving experience. Longtime drivers who would never bother to improve on their stock audio system might be stunned by the offerings on satellite radio, now available in some cars.
The cool stuff
The 2005 Acura RL has been called a "$50,000 computer on wheels" for such features as a real-time traffic-information system linked to GPS and sun-sensing climate control.
Such new cars also can offer invaluable peace of mind. "But you definitely will have a more economical car the longer you keep it," says Gillis.
Another guideline: Cheap new wheels are not necessarily a passport to low ownership costs.
"That is why the Lexus LS 430 does very well in our analysis," Bell says. "It is not inexpensive to buy, but is it is an exceptional value to own." Other cars on the IntelliChoice list (available in full at intellichoice.com): Honda Odyssey (both LX and EX) and the Chevrolet Silverado 1500 Crew Cab LS 2WD.
But it's not easy finding that low-priced "wonder car" - one that will run forever with minimum fuel and repair costs, not raise red flags with insurers, and age gracefully enough to retain some resale value.
"A lot of people don't achieve that," says Kerry Lynch, director of research at AIER. The institute publishes a $6 booklet - available at www.aier.org - with tables showing how used cars have held their value going back to 1997 models. And, she adds, there are variations on that ideal.
"When you're buying a new car, you want to obviously look for a car that's going to hold its value," Ms. Lynch says. "On the other hand, if you're looking at used cars, we suggest you first look at Consumer Reports and see which cars they recommend mechanically - the ones that stand up well," she says, "and then consider ones that may be a bargain because they have not held their value very well."
The riptides of resale
A failure to hold value doesn't necessarily reflect poor reliability, she adds. "So in a sense you get a better deal, if you're not at that point concerned about the resale value." Others say buying even a new car based on its perceived resale value is a risky tactic.
"It's really difficult to predict actual resale value because of a whole variety of factors," says the CFA's Gillis, also the longtime author of an annual buyers' guide called "The Car Book" ($20 at www.autosafety.org).
