Among my greatest past pleasures was taking delivery of a new car. In days of yore when selling cars was a profession, there was a time-honored ritual that added to the excitement. One could never simply negotiate a deal and immediately drive a vehicle off the lot. Auto dealers insisted on doing a major inspection and then giving the vehicle a thorough wash and detailing. The prep period was at least 24 hours.
When it was time to pick up the vehicle, the salesman would disappear for a few minutes and then pull up in your spanking clean new vehicle and educate you on how to use the latest and greatest new features. It took all of 30 seconds to educate me on how to use my 1970s 3-speed on the floor Dodge Dart, but about an hour to master the electronics of my 2014 Acura TL.
The best part of the ritual: The new car smell. Nothing excited my olfactory senses as that new car smell, which I imagine was akin to the enjoyment my golden retriever experiences inhaling the morning dew.
Many Americans will never experience a new car smell, as increasingly they can’t afford the cost of new vehicles. According to Cox Automotive, new vehicle sales in the U.S. this year will total 15.7 million, an increase from 2023 and the best year since 2019. Cox forecasts that used car sales this year will total 36.2 million.
There are used cars, or pre-owned cars as dealers like to say, and there are very used cars, which is what more Americans must settle for. The market share of used cars 10-years or older has soared by 30 percent since 2014, according to ISeeCars. Despite the increased market share, the price of these older cars has soared 60% in the same period, with older sedans, wagons, and hatchbacks comprising 16 of the 20 vehicles with the biggest growth in older car market share.
What’s notable is that share of older cars was stable from 2014 to 2017, but dipped between 2018 and 2020, when Donald Trump was president. In the past four years, vehicles 10 years or older comprised 22.7 percent of the used car market, up from 15.1 percent. This same period saw older used car prices grow on average to $12,194 from $9,135.
Notably, Joe Biden took office on January 20, 2021, so most of the older vehicle price inflation happened under his watch.
“The trend in vehicle prices represents an inescapable tidal wave,” said Karl Brauer, iSeeCars’ executive analyst. “When you have new and lightly used car prices spiking, as they have over the past four years, there’s no stopping the wave’s impact on older cars, even for cars produced more than a decade ago.”
Apologies for bringing politics into the discussion, but this blog has long railed about the lucrative $7,500 tax rebates Joe Biden’s signature Inflation Reduction Act (IRA) provides for mostly luxury electric vehicles, even for those GM and Ford manufacture in Mexico. The rebates amount to more than half the cost nearly one in four Americans must pay to buy 10 year or older vehicles.
Vice President Kamala Harris indicated in a CNN interview that she was involved in the crafting of IRA and supports it.
“You’ve mentioned the Green New Deal, I have always believed — and I have worked on it — that the climate crisis is real, that it is an urgent matter, to which we should apply metrics that include holding ourselves to deadlines around time,” Harris reportedly said.
“We did that with the Inflation Reduction Act. We have set goals for the United States of America, and, by extension, the globe, around when we should meet certain standards for a reduction of greenhouse gas emissions as an example, that value has not changed.”
It’s debatable whether the subsidies fueled EV sales because whenever the subsidies expired, Tesla and other EV makes began cutting their prices or added generous incentives to remain competitive. The Biden Administration politicized electric vehicles with its aggressive EV mandates, which GM CEO Mary Barra and Ford CEO Jim Farley foolishly embraced.
Barra and Farley have both dramatically scaled back their EV ambitions and expenditures, significantly impairing EV adoption that Biden said was critical because the climate crisis has reached “code red for humanity.” Toyota, which was pilloried in the media for its supposed reluctance to embrace electric vehicles, hasn’t scaled back its EV investment commitments, which exceed $18 billion in the U.S. and unlike GM’s and Ford’s EV investments, aren’t heavily funded by U.S. taxpayers.
Vehicles 10-years or older were once referred to as “clunkers” because they typically cost more to repair and parts often aren’t readily available. It speaks volumes about the quality of GM and Ford vehicles that neither automaker has even one vehicle among the best-selling used vehicles 10 years or older.
Check out the list:
In another black eye for GM and Ford, Consumer Reports issued its first-ever reliability rankings for vehicles between five and 10 years old. Toyota and its luxury Lexus brand left their rivals in the dust. Not surprisingly, Ford ranked last given that even its new vehicles are notoriously problem plagued. Ford is the automotive industry leader for safety recalls three years running.
CR named GM’s Buick Envision the best luxury SUV under $20,000 and the automaker’s 2017 Chevy Cruze the best small sedan under $10,000. Tellingly, the Envision is manufactured in China. GM manufactures the newly launched electric Cruze model in Mexico where GM under Mary Barra became that country’s biggest auto manufacturer, despite U.S. taxpayers bailing out the company and allowing Barra to keep a job that’s paid her more than $200 million.
“Brands like Lexus and Toyota have a history of conservative redesigns, incrementally improving their entire product line, rather than introducing many all-new systems,” Steven Elek, Consumer Reports’ program leader for auto data analytics, said in a statement quoted by the Detroit Free Press. “Our data consistently shows over time that new cars from those brands are reliable when new and they continue to be reliable as they age.”
Elek said the lower-ranking brands tend to have much less consistent reliability across their model lines. For example, only the 2018 and 2019 Chevrolet Equinox SUVs have above-average reliability among the six years that model was offered. However, he said the entire 2014 to 2019 Chevrolet Silverado pickup generation proved to have below-average reliability. The Silverado is among GM’s most profitable vehicles.
GM on Wednesday was ordered by a federal appeals court to face a class action claiming it violated laws of 26 U.S. states by knowingly selling several hundred thousand cars, trucks and SUVs with faulty transmissions. The GM litigation covers about 800,000 vehicles, including 514,000 in the certified classes.
Of course, those who are concerned about emitting emissions wouldn’t buy a used GM vehicle. The EPA reported that GM’s emissions from 2017 to 2022 substantially increased, and the company recently agreed to pay $146 million in penalties because nearly six million of its vehicles from 2012 through 2017 didn’t comply with EPA fuel efficiency and economy standards
GM’s monster EV Hummer also isn’t for those with environmental concerns. A climate group says the more than 9,000- pound vehicle is responsible for more environmental harm than most gas engine vehicles. In fact, GM is an industry leader when it comes to manufacturing vehicles belching the most emissions.
The Biden Administration earlier this month imposed 100% tariffs on China-made EVs, a move that Trump supports. China’s automakers can profitably build and sell more technologically advanced EVs for half the cost of those sold by GM and Ford. So far, neither Biden, Harris, nor Trump have yet to make any mention of imposing price controls on the EVs GM and Ford sell to offset the protections they enjoy.
Little wonder CEO compensations steadily increased during the Trump and Biden years, with the biggest surge in 14 years happening last year. So much for the “Eat the Rich” protestations of Democratic darling Alexandria Ocasio-Cortez and UAW President Shawn Fain.
AOC makes $174,000 a year, while Fain last year was paid $228,872. They can afford to buy new vehicles, although AOC said it’s tough getting by on her salary.