Economists watch vehicle sales closely because it is one of the four cyclical sectors that can indicate a slowdown in the economy. And as I mentioned in “Positioning for Endurance” vehicle sales have a long way to go before there are signs of trouble.
Why do we buy cars?
For some of us, we need to be able to move a family. Others need to haul things like business supplies and tools, or heavy toys, such as my fifth wheel RV. Some SUV owners have great 4×4 off-roading experiences. But the most compelling and fundamental reason for owning a vehicle is simple: transportation – We need to get ourselves from point A to point B.
Today’s cars have features that could not be made available even 10 years ago. Rental cars are almost always laden with many of these special options. One feature I really enjoyed on recent trips is plugging my iPhone directly into the automobile sound system via a USB port, and have it play MY music playlist.
But at the end of the trip, after being cramped in an airplane seat, and shuttled from the terminal to the parking lot, I always feel at home the minute I climb into the cab of my old pick-up truck. It doesn’t have all the new features, but it has the legroom I need, gets about 20 MPG and gives me a good view of the road ahead and behind. And it has a feature not available on ANY vehicle that can be purchased in today’s economy: “Zero Payment”!
It turns out that I’m not alone in my move to making a pickup truck my primary vehicle. Since the start of the new millennium, Americans are buying more light trucks than automobiles. And while the category “light trucks” includes minivans and SUVs, the top four sellers this year (through June) include the Ford F150, Chevrolet Silverado and Dodge Ram pickup trucks, according to Motor Trend.
Irrespective of what vehicle you next acquire, the financing decision should be an important consideration. Auto dealers and some credit unions offer near zero rates on their loans for new cars, and according to bankrate.com, rates for used cars are also very reasonable. At these low “cost of money” rates, paying cash for a vehicle is a questionable decision.
If you’re considering taking money from your investments, especially from your retirement funds, to pay for a vehicle, please call us for an analysis of your situation, first.
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