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Saturday
Oct142006

Value and Cars

A Lightly Used or New?

The thought process goes like this...would you rather have a lightly used BMW 3 Series / Mercedes-Benz C Class or a new car of comparable size and features for $ 25,000.00.

Would you rather have a lightly used Mercedes-Benz E Class, or a new car of comparable size for $ 40,000.00

Would you rather have a lightly used BMW X5, or a new cross over for $ 35,000.00

Would you rather have a lightly used BMW 7 Series / Mercedes-Benz S Class, or a new car of comparable size for $ 55,000.00

Before you go out, and start looking at a new this or that for a specific amount, consider a lightly used BMW or Mercedes-Benz for the same amount. You owe it to yourself to at least look, touch, feel, and drive. You will be pleasantly surprised.

Yes we know...there is an abundance of new vehicles, accompanied by an overload of advertising, and for how little per month you can have a new vehicle (until you read the fine print). Take a moment, consider the lightly used perspective.

The availability of "luxury marque" lightly used vehicles is a recent development in the Canadian automotive market. Take advantage of this unique opportunity, come see for yourself, and experience the difference.

Take some time, pay us a visit at Strada....we will gladly talk about it with you.

 

 

Monday
Oct162006

Value and Cars - Part 1

Value

How do you find compelling product value in a used vehicle? Its a good question, and there are numerous pundits that will have an opinion. Talking about cars, and the automotive industry is close to being its own industry.

How do you maximise the value that you will receive for your money? Would you rather have a new vehicle with a warranty, and some sort of finance package to make it easier? Or would you rather have a used vehicle, and literally get more vehicle, more safety features, more technology for the money?

But new vehicles have warranties...true, recent model used vehicles have remaining warranties, and its easy to buy extended warranties for additional peace of mind.

The costs for "consumables"...what about those? All vehicles require maintenance in the 10,000 to 20,000 klms interval. On a new or used vehicle as an example if the tires are new, the brakes are new they will cover the same distance.

Its a know fact, the quality, and durability of vehicles has improved to the point that vehicles will easily travel 160,000 klms without major "issues". If the first owner leased the vehicle and traveled 60,000 to 70,000 klms that vehicle can easily travel the same distance again without major expenses.

Its a lot more money to maintain a used luxury car....in relation to the performance, and enjoyment compared to an non luxury car, the maintenance is less money. If you are allergic to maintaining a vehicle...yes any maintenance is too much money.

"I can get a new vehicle for less money per month than a used vehicle" we agree that in some cases its true.

Value = Benefits / Cost

Think of the benefits that you can derive from a lightly used vehicle at a fraction of its original cost.

 

Tuesday
Oct172006

Value and Cars - Part 2

Lease Returns

Leasing makes a more expensive vehicle affordable, if your budget can support a $ 35,000 vehicle, a lease will make a $ 45,000 to $ 50,000 one affordable within your budget. Makes a lot of sense, it gives consumers an opportunity to "step up" to a better vehicle, of superior quality.

If the residual value is set correctly, the lessee has the chance of making some money (equity) at the end of the lease. Reality sets in, its competitive in the automotive industry, low monthly payments, accompanied by low rates motivate the consumer.

The lease residuals are detached from reality, the consumer gets a low rate, a low monthly payment, and a high residual (purchase option). The best a consumer can do is walk away from a vehicle at the end of the lease term. The residual (purchase option) is higher than the market value.

These walk away leases with high residuals generate quality off lease vehicles which are recent models (usually 3 years old), with low kilometers (between 50,000 and 70,000), at reasonable prices (approximately 60% of the original price). There is an inherent good value proposition in these vehicles.

If you are focused on a low rate, and low monthly payment these vehicles are not for you. If you are focused on a compelling value proposition these vehicles are for you.

You may ask...if these vehicles are such a good deal, why the original lessee did not buy it. Simple, the residual value (purchase option) at the end of the lease was too high. The high residual was a component to lower the monthly payment!

This phenomenon generates a robust supply of lease returns at market prices. Finding, and buying the good ones...that is what we do at Strada.

 

Wednesday
Oct182006

Value and Cars - Part 3

Quality

From most surveys, if the average age of the trade in Canada is 6 years old, how come there are so many 3 year old vehicles with low kilometers?

Are they all good vehicles? Are they all "average quality"? How come people let go go of them? We have answered some of those questions in our previous dialogues.

There have been several studies concerning leases, residuals, and the availability of lease returns. In most cases because of high residuals the original customers either leases another new vehicle,or prefers to walk away instead of paying too much.

Are the vehicles all good? There is a variety of vehicles that are available from excellent, to good, to spotty. The answer is no they are not all excellent. However, there is adequate transparency in the system to quickly identify the bad ones. Having an extensive knowledge base, and hands on experience. We only buy the excellent vehicles, and do our own background checks.

If the residual was high. Are you paying too much? We are paying "current market prices" which have nothing to do with residual values, and in most cases are lower than the residual value of a particular vehicle.

We also have "spotters" that find specific vehicles for us. We don't get involved with trade ins that other dealers do not want.

At Strada we constantly look for the superior value propositions, that we would buy for ourselves.

 

Thursday
Oct192006

Value and Cars - Part 4

The Deal...Value

We are all looking for a "deal" one way or another, its unfortunate that it usually revolves around price.

You use the Internet to "hunt and gather information" involving every aspect of a potential vehicle transaction...the first question we are always asked! Is the price flexible? What rate? Which is understandable....however do you drive a price? Do you derive enjoyment from a rate?

Look at the value proposition in the vehicle as a starting point. A lightly used vehicle,  compares favourably to a new vehicle that is half the money of this lightly used vehicle when it was new...its "good value".

Which brand of vehicle will make you feel good...or feel better? Its easy to read about all aspects concerning a vehicle. The most important is YOU, how you will feel. Here is an example, would you feel better driving a new Chrysler 300C or a lightly used Mercedes-Benz E320 for the same money?

 When it comes to used vehicles its easy to locate them, its easy to get an idea of prices. Its a little frustrating at time to find a dealer that inspires confidence and truly cares. Be assured....at Strada we care about you...if you visit our showroom we will even give you a comparison sheet that will assist you in making you decision.

Part of receiving value is being satisfied with your decision, and your purchase. Its important to us that you feel good, that you are happy, and that you stay in touch with us.

As a consumer you don't buy a vehicle every day, the information is easy to get. Engaging the emotions, seeking satisfaction...with a dash of passion thrown in for good measure is elusive. At Strada we understand, get in touch with us, visit our showroom.