CHAPTER 9 - BUYING A NEW CAR
ver the next few chapters I’ll discuss the particulars on newcars, used cars, and leasing versus purchasing. Let’s start with (^)
new. First let’s look at some of the factors affecting what you’relikely to pay, and how to save money and hassle. First, though, (^)
we need to discuss how the recession and drop from 16.2 million newvehicles sold in 2007 to the 27-year low of 10.4 million in 2009 affected (^)
things for consumers. All of the domestic car companies restructureddramatically, slashing costs, streamlining development and production and (^)
dumping or closing brands that weren’t critical to their survival. They alsogot unprecedented union concessions.
O
The result is a group of lean and mean companies that actually makemoney in a market of 11 or 12 million new cars. Amongst the big changes (^)
was the beginning of a shift from what’s referred to as a “push”manufacturing strategy to a “pull” one. In the old days, they’d run the (^)
factories to meet union demands, no matter how many people actuallywanted to buy the cars and trucks they were building, “pushing” them onto (^)
the dealers.
If there weren’t enough takers, they’d add rebates or incentives to thevehicles or dump them into rental fleets. The result was a large discrepancy (^)
between sticker (MSRP) and actual transaction prices. It also lowered thevalue of used examples of those vehicles—especially late models—
because if you could get thousands off on a new one, why buy a year oldmodel for almost the same money?