The Rolling Spreadsheet: Three Year Old Cars For $5500 – The Drive
Facebook, Twitter, Snapchat, Instagram and Youtube all have two horrific things in common besides rampant narcissism and the Godless desperation that comes from having everyone trying to out clever each other.
First off, they’re free. The only thing that gets monetized are your words, images, videos, and political drivel. You post. Others pay to figure out what you’re thinking. It’s a fair deal for what amounts to data mining the masses.
The second is the time suck. You can spend hours reading and watching the activities of other people. At the wholesale dealer auctions we don’t have time for this. The average auctioneer will sell around 100 to 150 vehicles an hour, and the average auction has between 8 and 12 auctioneers selling cars at the same time. Over a thousand cars can come and go through in an hour, which means that we really don’t have the time to socialize online with strangers.
What we do have are short games. Over/Under is a popular one where for a buck someone estimates where a car’s price will end up once the auctioneer gavel falls. A 2005 Ford Taurus with 200,000 miles on it may be given a $1500 target, and for a buck, you can take the ‘over’ or ‘under’ that amount. If it’s a Carmax auction, where over a hundred dealers compete to buy a car while the auctioneer tries to get the inexperienced buyers to bid against themselves, you’re probably looking at ‘over’. In fact, I just saw a Taurus of that ilk sell there for $2000 plus the $240 buy fee. That’s not just retail, that’s stupid retail.
If you’re at a night sale that only offers title pawns and leftover beaters from independent used car dealerships, you’re definitely looking at lowering that target over/under price. That $1500 would probably be revalued at around $900 and once again, it would be about a 50/50 shot.
The right way to value vehicles is all about hitting ’em where they ain’t when you’re buying, and where they are when you’re selling. Californians put a stiff price premium on Toyotas and Hondas. Northerners have a hankering for four-wheel-drive SUVs when they find themselves stuck in pothole ridden city traffic, and trucks rule the roost here in the South along with any ride that is north of two tons.
A car dealer always has different markets to figure out whether he or she is operating in the retail car business, or the wholesale auction bid-ness. This afternoon I had lunch with two full-time wholesalers. Guys who buy massive amounts of vehicles every week that eventually wind up at other dealerships. In that line of work you have to understand everyone’s market – the city folks and the country folks. The Toyota dealer way up in the north Georgia mountain may be happy to pay a premium for a four-wheel-drive 2014 Ford F-150 XLT Supercab, while a BMW/Mini dealer in Atlanta couldn’t sell that truck to save their ass from first base.
Handicapping is a big part of the car business. After today’s auction we ended up talking about a topic that was a bit weird. but directly related to the valuing of vehicles. Which cars are best for those who hate cars. The tightwads. The frugal zealots. Those folks who look at cars as rolling spreadsheets. We came up with 12 cars that would fill the need for those who are apathetic to all things automotive. The question wasn’t the cars so much as the mileage for each car. Whether it’s popular or not makes a difference in that mileage figure.
At how many miles is the average three year old ‘tightwad’ car worth $5500? This is what we came up with.
2014 Smart Fortwo with 10,000 miles
2014 Mitsubishi Mirage with 50,000 miles
2014 Toyota Prius with 220,000 miles
2014 Chevy Spark with 70,000 miles
2014 Scion iQ with 70,000 miles
2014 Nissan Versa (base) with 50,000 miles
2014 Toyota Prius C with 150,000 miles
2014 Toyota Yaris with 130,000 miles
2014 Ford Fiesta S with 70,000 miles
2014 Kia Rio with 80,000 miles
2014 Dodge Dart with 60,000 miles
2014 Fiat 500c Pop with 50,000 miles
Here in Atlanta, $5500 can buy you an ultra low mileage Smart car, or, a Toyota Prius that has gone halfway to the moon and back. My question to you is, “Which one would be cheapest to own?”
Which one would cost you the least in the long run? A gas sipping Toyota Prius C? An often ignored, but fairly easy to maintain Mitsubishi Mirage that can be bought on the cheap? Or a Nissan Versa base model that offers penurious plentitude for those who love small buttons and black plastic?
Which one would cost the least to own in the long run? You make the call.