A New Car For Under $10K?
With the average MSRP of a new car now topping $30,000, a new car for a third of that price in 2009 seems downright cheap. I remember the 1986 $4,995 Hyundai Excel, cute & basic.
Fast forward 23 years and look at the 2009 Nissan Versa sedan which starts at $9,990.
Nissan announced this basic version a few months ago before the bottom fell out of the economy. Dealer advertisements on other vehicles now talk about discounts greater than the price of the base Versa.
My problem with this new car is that it is the 4-door sedan and not the more useful hatchback model. I’m unsure if new basic cars like this will keep folks driving cars (vs say transit) or just provide more affordable options for those that’ll be driving anyway. I do think the more spartan our vehicles are the less likely we are to tolerate a long commute.
Owning and driving a car is not cheap. Gas is currently cheap but you still have depreciation, insurance and maintenance. I hope we see more small, basic, cheap, efficient cars.
But can American car makers compete in this market? Can they survive if they don’t?
I’d say that they’ll be “more affordable options for those that’ll be driving anyway”. I’d also say that “American car makers [can] compete in this market”, but only after they shed some or all of their legacy costs – the reason the Big 3 focus(ed) on SUV’s and more-expensive vehicles is that they generate more profits (needed to offset their legacy costs) and BECASUE IT’S WHAT PEOPLE WANT(ED) TO BUY! We don’t live in a communist state, we have choices, and we vote with our wallets. People buy big vehicles, and don’t buy smaller ones, for both valid and invalid/stupid (“it’s safer”) reasons. Successful manufacturers make what their customers want, unsuccessful ones don’t, and if product quality is equal, lower prices typically win.
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The other half of the equation is good luck in finding a basic model on the lot. Dealerhips need to make money as well, and they make more money on more-expensive versions of the “cheap” mdels that get people in the door. If you go to the Nissan website and “build” a loaded Versa, you can get up to $19,515, nearly twice the basic price – guess which one will have 20 examples on the lot to pick from and which one will have only 2? Plus, if you’re a believer in the gospel according to Consumer Reports, most folks will be better off spending their $10,000 on a 2-3 year-old “better” vehicle than accepting the sacrifices associated with going bare bones (and every dealer is well prepared to reinforce this point).
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Want to get people to use transit? Make them pay to park where they work and/or shop and/or live. “Free” parking distorts the cost of driving, and most people will willingly trade their own space and their own schedule for marginally higher costs. It’s only when you start paying for that parking space that a monthly transit pass usually makes it onto most people’s radar . . .
Mass transit also has to be competitive time wise as well. To put it simply, it’s too easy to get around St. Louis by car, hence the reason most people choose to drive. In cities such as New York, Chicago, or Washington, DC, people take mass transit not just because it’s cheaper, but often because it takes less time than driving. I know in those three cities, where I once lived or travel to often, it was ten times easier to take mass transit than drive. Also, for mass transit to work, driving needs to be flat out unpleasant. Driving in Chicago, New York and DC downright sucks, forcing many people to take mass transit. St. Louis does not have very bad traffic compared to other cities, making driving way too appealing…
You’re never going to get most St. Louisans to take the bus when it takes an extra hour longer than driving to get places.
> You’re never going to get most St. Louisans to take the bus when it takes an
> extra hour longer than driving to get places.
Exactly. In order for transit to work, you need to have high density, horrible traffic problems, or both. Most of our MSA is low density development, which can’t be served by transit no matter how much you subsidize it. If you insist on serving low density areas, you bankrupt your transit system.
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In Chicago and New York, you have a “perfect storm” for transit success: A successful downtown, large areas of high density development, and severe traffic problems for those seeking to access from low density areas. That’s why the Long Island Railroad and Metra were jammed with people even when gas was cheap.
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As for that $4,995 Hyundai Excel in 1986 … it was a piece of junk. Today’s Hyundai is much better, though I’d take a Nissan over a Hyundai any day. And don’t forget, $4,995 in 1986 has to be adjusted for inflation … as of 2007, that would be $9328, nearly as much as the Nissan.
Mass transit does not necessarily have a time problem. A well designed, comprehensive transit system would have layers, allowing the rider to arrive at the same destination in different ways. Dedicated lanes, as with subways, streetcars and some buses help.
In addition, urban space must be physically designed to accept transit as a major factor. So for instance a transit stop may occur in the middle of a public square far away from where cars can go.
Suffice to say it is apparent St. Louis has neither the commitment nor the skill to design a transit system that serves its citizens well. However it is important to realize that the poorly operating transit system in St. Louis are not how the best ones function. In fact well run transit systems all over the world approximate travel times of the auto, even in less congested areas. (Numerous European cities have daily ridership approaching 80% and there are cities where car ownership approaches 50% of the population, that would not occur if their transit system did not function properly)
There is no question the city and older surrounding towns such as Kirkwood and Ferguson have the best chance of success with transit. Chesterfield and communities with huge building lots are always going to have problems unless they are reconfigured. Although I believe even these communities could be served after a fashion with a well thought out transit system.
But getting back to the car under $10,000. I have always wondered why a car company has never built a bare bones car, along the lines of the old VW, that changes little year to year, thus parts are cheap and the car is easy to work on by their owners. Seems like there would be a market to counteract the fashion conscious auto industry.
“But getting back to the car under $10,000. I have always wondered why a car company has never built a bare bones car, along the lines of the old VW, that changes little year to year, thus parts are cheap and the car is easy to work on by their owners. Seems like there would be a market to counteract the fashion conscious auto industry.”
Car companies DO still makes these cars…. only for Europe and India. Or Mexico, where you could have bought a brand new Original Beetle up to like ’03 or ’04 I think…
I have heard something about Mexico and India with affordable cars. I thought in part a problem was the pollution controls. Maybe those controls should be examined, especially if Europe and Japan are not following them. I feel like both are far ahead of America in sustainability. Maybe a car costing less than $6000 and less than a certain horsepower could be exempt from the more severe regulations. It would fill a niche. Although its profitability could never satisfy unbridled greed, I would imagine a comfortable living could be made off such a venture.
I was wondering about boutique car companies also. There are boutique beers, but I guess the capital needs are much different with greater risk. The problem with mega corporations is that they eliminate the small producer and hence innovation.
This brings us to today.
The car companies can’t compete in this environment. It is the case even though they have been given every advantage by government. It includes highways, elimination of mass transit including intercity rail, centralization of commercial through zoning and accessible only by auto.
All of this and more they have been given, and still they have failed.
I’ve been car free since January 1990 and am thinking of buying one before the winter of 2009. Why? Well, I normally ride a scooter, however, there are times when the weather does not suggest riding a scooter. Before the metro service cuts I would take the bus to work (which would reinforce why I bought a scooter as it takes almost three hours for me to get from work to home when I take the bus). Metro has decided that effective March 30 they will no longer provide bus service west of 270. That means I will not be able to get to work (that is if I still have a job on March 30, which these days is not guaranteed).
My choices are call a cab once I get to the Ballas Transit Center and take it to work and repeat the process after work. This might add as much as $15 to the cost of my daily commute on those days I must take the bus due to inclement weather I could also buy a car, something I thought I’d never do again.
If I buy a car it will be something I was forced to do by metro St Louis due to their very poor service and now increasing prices (Eff 1/1/2009 it will be $2 just to get on the bus and $2.75 if you need a transfer).
People need to work. So when St Louis once again finds itself failing clean air tests, blame metro for putting more, not fewer, cars on the road.
Scooterjo – don’t “blame metro” – blame the voters in St. Louis County, the majority of which refused to support a tax increase to maintain Metro’s services at its current levels – reduced funding (in real dollars) = service cutbacks – there’s no such thing as a free ride!
One problem is the further you the less areas like Chesterfield are suitable for mass transit. If you take a bus full of people to Chesterfield and it takes one hour to get there and back (minimum). How many bus loads of people would get on and off the bus in the compact city in that same hour?
The inefficiencies are not so much metro, but of the whole culture, failure is built in. I have used the example of Stockholm before, where in the fifties they planned suburban development like the fingers of a hand with trains following each finger and with green space in between the fingers. The best part is that it is not only suburban transport and suburban living that benefit from this plan, but the city center also. The center is given its rightful place in the transportation scheme of things.
It is not just Wall Street screwing up; it is a one-sided deal in St. Louis also. The result is anarchy in urban planning and transportation, designed for profits rather than the public interest.
If Metro is incompetent, then so is the rest of the local government and the press. Discussion of the urban structure should be a daily activity, as it is on Steve’s blog, not a once a year public hearing.
The fact Scooterjo cannot get to work using transit only demonstrates just how poor the governance is in meeting the needs of the region. Metro’s failure cannot be separated from the failure in urban design (along with multiple questions of energy, sustainability, global warming etc)
But what is most devastating is the realization that the reduction of transit is nothing new; that has been the general policy for decades, as has been the demolition of neighborhoods that work well with transit.
The other half of Scooterjo’s problem is that he/she is not a regular rider of Metro. We all want public transit to be there when and where we want it, but it’s impossible for any transit agency to be just a bad-weather solution. We work, what, 200+ days a year. How fair is it to expect Metro to run a bus out to Chesterfield if we don’t use it 150 or 180 of those days? Sure, biking and scootering creates less of a carbon footprint than a SOV or a transit bus, but combine the footprint of a scooter plus the half-empty (or less) bus and you get the worst of both worlds . . .
And it’s important to note that while Nissa does have plants in the USA, the Versa is not made here, though it is made in North America. Versas are made by Nissan Mexicana, just south of the state capital of Aguascalientes, Mexico, which is a land-locked state in the center of the country. It’s a 450 mile or so drive just to get them to the US border at Laredo, TX from there, and another 1000+ miles to drive them from Laredo to St. Louis. So as far as environmental impact goes you’re starting off with about 1500 miles of car-carrier transport. I don’t know what kind of mpg they get — 3 or 4 maybe? and I’ll make an assumption that the environmental controls in Mexico aren’t as strict…
The above statement is seen to be contradictory. The situation is very critical and need an experience complainer to resolve it.
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