Anatomy of a Car Buying Decision in 2023 – Part I – Quantumania
There is nothing more ephemeral than human desires and needs.Sometimes they can be steadfast and nearly eternal, sometimes those wants and needs created by the mind last a few seconds or can be satisfied or dismissed just as fast. Like those elements at the bottom of the Elements table that you have to learn their names in high school, even if they only existed for a fraction of a moment.
Car desires are nearly the same, but even more capricious, complex and inscrutable. That an entire market and the livelihood of thousands of people lives or dies by chasing these brief flashes, is astounding. Then the purchase process can go wrong every minute. A car sale is a furious battle of entropy against change. Even if in the surface, the process looks plain, simple, logical and straightforward. A car purchase has to through a dozen deaths and overcome them, to actually happen.
Despite the steadfast service received for 7 years from a 2011 Saab 9-5 NG, and likely a mental side effect of being married to me, a guy who juggles old, good, attainable and very rare cars like it is a lifetime vow, the wife had decided it was time for a new car for her Daily Driver. No immediate, critical need to plunge on a car decision. I’m an expert here on non-necessary car purchases, but tried to influence and not decide for her. The number of decisions of steps to make a car purchase happen are presented here
The requirements:
- As new as possible
- No Hondas or Toyotas
- 6 yr loan at a payment as close to $350/month
- No older than 2017
- No smaller than the Saab 9-5 NG
- Sedan only (thankfully not SUVs)
- Boring color (Black, Gray, White)
- Automatic (a decade of trying to get her to like stick shifts has failed)
- Android Auto (preferably)
The search tools: CarGurus, AutoTempest, AutoTrader, Craigslist
Decision one:
Lease or Buy? Wife was thinking if a lease made sense, but living in the Bay Area, her current commute of 44 miles round trip. and the regular LA to SF drives we do would make it a non-starter due to the mileage requirements. Besides the Leasing market is all sorts of wacky right now, prices dont make sense and actuarial pricing tables need to meet reality, furthermore her payment target is too low for a lease.
Decision two:
How to Finance? She asked me whether it made sense to just head to the dealer without a loan or not. Her credit is totally acceptable so she would get approved. However, she didn’t want to do a down payment.
In that case, a Credit Union or your own bank is your friend: If the entire loan amount pre-approved covers everything, then that would work. Dealers don’t like this as it greatly lowers chances of any upsells, and will try to offer you other shenanigans, like an even longer loan at a higher rate but a lower payment. Don’t fall for it. They can smell a cheapskate deal when you tell them financing is already done. She applied to her bank and to one credit union (more on why in a second) and got her wished for terms, at an APR of 7.1% (Double the rate my last used car financed car in early 2022) but indeed a good rate now after Fed’s latest moves.
Decision three:
What car do I want? – Ah, here is the true complexity of the process, the true atomic quantum unit of incredibly unstable desires, that fuel the destiny of an entire worldwide industry. Car Designers, Manufacturers, Workers, Accountants, Unions, Truckers, Detailers, Sellers, Car Bloggers, all over the globe depend of these ethereal decisions of car buying.
The vehicular candidates that nearly covered all the requirements (including my dark horse candidate that nearly won) were very wide and varied, but at least belonged to the same family tree and nearly all of the have 4-cyl engines. She likes cars that are not ‘what everyone drives’. I’m familiar with that feeling.
Kia Stinger
Maserati Ghibli
Genesis G70
Audi A5
Audi A4
Dodge Charger
Kia K5 LXS
Alfa Romeo Giulia Base
VW Arteon
Surprisingly, this process took about 12 days – She started looking for Kia Stingers, but they were out of budget. Same for the Genesis G70. The Audi A5 4 door Sportback was too expensive as well. But A4s were attainable. I gently pushed for the Alfa or the VW Arteon. That’s because I like to pick the highest HP engines within budget and the Alfa Romeo had a 280hp engine. I searched for a cheap VW Arteon, with similar HP, but they were none found within our target budget. We went back and forth at least a dozen times on the vehicle selection.
The Ghibli she saw was a 2014 4-door from a sketchy dealership at 88,000 was my only veto. Just didn’t feel like bankruptcy was in our plans this year. I’m sure it would have been wonderful that one week of the year when everything works.
After much deliberation, the selecting committee made of her only, ended up with the lowest priced competitor, a 2019 Charger for $18K with 56K miles, a 2018 Audi A4 Premium with 70K miles but impeccable service records, a 2017 Alfa Romeo Giulia with only 37K miles, for $22K and the Kia K5 that had showed up at $21K and had 59K miles. The Kia was the newest vehicle of the bunch.
She got a bank pre-approval but the independent dealer that had the Alfa only dealt with Credit unions, so she did an application there too. We waited for an approval, that took an old fashioned morning and afternoon and was done by 4pm the day she applied.
Armed with a solid approval, we went to see the Alfa, late afternoon, at an independent dealer 2 hours away. It wasn’t ready for prime time, was missing a fender liner, sporting cheap Chinese tires and in deep need of a detail of the rashed wheels. Plus for whatever reason the car hadn’t been smogged yet by the dealer. Wife drove it but despite the initial attraction, and my lobbying, she didn’t like it. I was hoping to fall in love too, but even I knew this Alfa wouldn’t be the one. Pass.
Plus the wife found the rear seat is a bit smallish. A Mazda dealer much closer to us had the final two candidates, A 2019 Charger and a 2021 Kia K5. Both were former rental but in great condition. Interior was spotless. The size is just as large as the Saab 9-5NG. We would go there for the final drive test
Decision four:
Now or later? Truth be told, the drum of ‘I want a newer car’ had started to sound back in the last summer, when the California heat wave meant the AC of the 2011 Saab 9-5 needed at least 5-6 minutes to start cooling the cabin and maybe 10 for a decent cool feeling, after that, it was fine. That felt like an eternity under 100 degree days. But the prices were insane so we decide to wait. Now in February 2023, the car rental companies have finally started to cycle again through two year old vehicles and the Charger and K5’s were recent rentals. While I expect the market to fall perhaps another 5-10% in prices, Interest rates raises are not slowing down. So decided than now in Feb was the best time to pull the trigger. Some cars are showing up at reasonable prices, if not deals. Some sanity is back, but barely.
She did get a new job, a raise and unfortunately the same 40 mile round trip commute, so making that drive would certainly be better in a newer vehicle. However, the economy does feel both shaky and solid.
On our next installment: The final test drives, The deal falters, Mind is changed again, and One last opportunity to blow the deal up courtesy of the dealer.
