Monday, March 28, 2011
When fuel prices go up…get a new car?
With the average cost of a gallon of regular unleaded at over $4.00, along with the civil unrest in Lybia and Egypt- compounded by the devastating earthquake and tsunami that struck Japan…is now the best time to buy a new fuel efficient car?
Well, like anything else, it all depends on whom you ask and what your current situation is. There have been very few occasions in recent history that I can remember when there have been so many good deals and favorable financing when it comes to shopping for a new car than now. From 0% financing for 5 years, to leases offering no down and payments under $200 a month. It seems like nowadays you can find yourself in a brand new Honda Civic that gets 40 mpg for around the same price as what some people pay for their cell phone bill.
However, the very reasons I just mentioned in favor of buying a new car right now, ironically enough are the same reasons why you should hold off on purchasing that new set of wheels. Purchasing something in the midst of frenzy is like going grocery shopping when you haven’t eaten anything all day. Emotion trumping logic is almost always a formula for buyer’s remorse.
We need to remind ourselves that gas prices could drop just as easily and as fast as they went up. The rise and fall of crude oil is not always directly correlated to supply, but rather on the overall sentiment of those who trade it as a commodity. Just because the price of crude oil is at a whopping $105 per barrel (the highest its been in years), that does not mean that there is a shortage of it. It ‘s merely a nervous reaction to what is going on around the world that is causing prices to rise.
So if global calamities and high gas prices are the reasons why you want to buy a new car, I suggest that you wait a couple of months, you will thank me for it later. However if your car is on its last leg and you’ve already been thinking of purchasing a new vehicle for sometime, then now is the time to buy. There are a plethora of reliable, fuel-efficient cars in the marketplace today. Toyotas, even with their recall issues still have a very loyal following and seemed to have garnered a favorable verdict in the court of public opinion. Sportier options are also aplenty with the Mini Cooper, Volkswagen Jetta and the return of the Fiat 500- are all stylish alternatives for those who want a little fun to go along with their practicality.
Living in L.A. where we are often judged by what car we drive, it can be very easy to succumb to notion of constantly wanting to be seen in what is the latest and greatest just so we can impress the valet or the person next to you at a stop light. I have always considered myself to be a "car guy" and I sometimes miss the days of weaving through Laurel Canyon in my sporty Audi Quattro, with its 6 speed manual transmission and all its Teutonic glory. Whenever that longing tries to become a new reality, I remind myself that there is no better way to hedge or balance out high gas prices than not having a car payment.