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    Our Accurate Cars Blog is here to inform our customers about our Honda and Acura Used Car business and our Honda and Acura Car Repair business. This is where any visitor to the Accurate Blog can ask questions and respond to any Blog entry. Thank you for visiting and we look forward to hearing from you.
10
Feb

Cars are a Machine Not a Money Making Investment

Common consumer ideology is a car can be purchased, filled with fuel once a week and driven with few (if any)  additional costs associated with maintenance or repair. This Utopian, naïve notion is anything but true. Every mechanical apparatus needs to be maintained and kept up. The more complex (the amount of internally lubricated moving parts) the more one should expect to devote time and monetary funds to keep it operating smoothly, efficiently, properly.

Yesterday, I spoke with a very loyal customer who expressed concern about a needed repair. His 2008 Honda Odyssey is leaking engine oil from the bank 2 spool valve. On a scale of 1 to 10; the severity of this leak is around an ‘8’ and is even leaving a ‘puddle’ of oil on the ground when parked. The customer stated that he didn’t know if the vehicle was worth the $580 repair and also expressed concern over the amount of money he had spent in the past few months on the van; questioning whether that money would be put to better use in a new car purchase. After he told me that our shop, Accurate Automotive performs 90% of the maintenance on this vehicle; I went back 2 years in his service file, to February 2016. In the past 24 months; there were repair orders in his service file that included routine oil changes, a 135,000 mile service, an alternator replacement, a high pressure power steering hose replacement and a 4 wheel alignment after having some new suspension parts installed. In the last 2 years; the total amount spent on maintaining this 2008 Honda Odyssey (with well over 150,000 miles on the odometer) was $2600 – an average of $110 per month.

What are car payments currently averaging – $350, $400, $425 for 72 and 84 month terms? And with that re-occurring monthly payment, is the consumer guaranteed their ‘new’ car will not break down?  Ever wonder why the initial operation of a machine is referred to as a “break-in period”? If there is a faulty component in that ‘brand new’ machine, it will likely fail  and the machine can break down. LOL: Isn’t the last thing a manufacturer would want to call the initial operation of their product a “break-down period” – so it’s not ‘break-down’ – it’s a “break-in period”- but what is the common word in both terms -“BREAK’ … That is exactly the time a break down is most likely to occur – right after a machine is built and especially if it was manufactured in mass production.

So while the consumer of the ‘new’ vehicle is paying $400 per month to drive it – while it is depreciating in value at an alarming rate; the ‘good news’ is the repairs are ‘free’ because ‘it’s under warranty’. But does ‘under ‘warranty’ also mean an alternate means of transportation is provided? What does the consumer do for transportation? While the ‘new’ car is in the shop; does the monthly payment stop?   What does the ‘new car’ owner do, especially if the mechanical issue is epidemic and the needed parts are on ‘back-order’. Buyers remorse sets in – “I wish I still had my old car” – “I should have never bought this thing”.

Think about it:  – a ‘new’ car can have mechanical failure and is most vulnerable to operation issues right after being built – especially if a ‘new and better’ design is being introduced into the market. And that ‘new’ car warranty does not mean the car cannot break down. In fact, a ‘new car warranty’ is more of a benefit for the financial lender of the car loan because if the consumer owes money on the car, he may not have the income to make the monthly car payment and also be able to pay for a mechanical repair to keep the car running. A new car warranty reduces the risk  that a repossession could occur. This is why new car POWERTRAIN warranties greatly exceed the ‘bumper-to-bumper’ warranty term – it is taking longer for the average consumer to ‘pay-off’ the vehicle loan because new car prices are higher. If car manufacturers want lending institutions to finance their product; they have to cover it (ensuring the creditor of the car loan against high repossession numbers).

A scenario for the powertrain warranty: Let’s say a consumer purchases a new car and finances it for 72 months @ $400 per month. Three years later, the vehicle has 48,000 miles on it and the transmission fails. At this point; the consumer is still making the monthly $400 payment, he still has 3 years before the loan is paid in full, the car is broken, and the car is a 3 year old, used unit. If he can’t afford the repair, the temptation would be to just stop paying on the car and let it be repossessed – then the lending institution would have to fix it. This is the main reason for long term factory powertrain warranties – and why some factory powertrain warranties may expire if car ownership changes. The powertrain warranty protects the original lien holder (lender) far more than a consumer.

And the ‘new car’ warranty  only provides compensation for the costs associated with the repairs – and uses a percentage of what the consumer paid for the car when he bought it.

With our shop computer program, we are able to generate reports. One report we can generate will tell exactly what the maintenance (including repairs) has cost a car owner (per mile driven). In the above example, the costs associated with maintaining this van (calculating in total money spent on this vehicle at Accurate Automotive and divided by total miles driven during that time);  the consumer has paid Accurate Automotive .08 cents per mile to maintain his 2008 Honda Odyssey with nearly 200,000 miles on it. Put this in perspective: If gasoline is $2.00 per gallon, and a vehicle makes an average of 20 MPG (miles per gallon); the cost to fuel the vehicle is .10 cents per mile. Fuel costs in this situation far exceed maintenance costs.

Cars are machines and the only return on investment a consumer will get from a vehicle is a method of reliable transportation from point ‘A’ to point ‘B’ and then back to point ‘A’. And the manufacturers that seem to lead the way in durability, parts availability, and design for efficient repairs when needed are Honda, Acura and Toyota. All others are sub-par. Don’t take my word for it. Research back 15, 20 and even 30 years and see which car makes are still on the road and running strong, based on the production number built.

How many Honda and Acura vehicles are on the road when compared to the same year models of Nissan (who wants to be considered equal with Honda so bad they can’t stand it), Mazda, Kia (possibly the 2nd disposable car makes offered for sale in America – Yugo was the first), Hyundai, ALL European makes (which are viewed by most consumers as ‘mechanical time bombs’)  , Volkswagen (which is in ‘hot water’ for diesel emissions-related fraud)  and domestic car brands?

 

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