Reading 123 1/14/09
The Hot New Car Is Your Old Car
By JONATHAN WELSH of the WALL STREET JOURNAL
JANUARY 14, 2009
For decades, Ashley Fletcher ditched his cars after they reached 50,000 miles.
Now he plans to keep his 2004 Lexus RX 330 for two or three more years -- or until
it reaches 70,000 miles. If all goes well, he might shoot for 100,000 miles.
Like many drivers, Mr. Fletcher scaled back his automotive aspirations because of
the economic downturn. "My portfolio lost about 40% last year, so I'm certainly in
no mood to buy a new car," says the retired sales and marketing executive from
Pinehurst, N.C. To that end, he's making a point of changing his oil and other fluids
regularly and keeping his tires properly inflated to help them last longer.
Until recently, many drivers treated their cars less like transportation and more
like handbags, jewelry and other trendy accessories. Drivers craving the latest in
mechanical "bling" found easy credit and inexpensive lease deals attractive enough to
get a new ride every three years or so.
Today, the scarcity of attractive terms for financing and leasing means that many
people are keeping the cars they have. As a result, car dealerships are quiet while service shops buzz.
"The three-year ownership mentality has crumbled," says Trevor Traina, founder of DriverSide, a Web site that helps people keep up
with car maintenance and avoid overpaying for repairs. As new-car sales declined sharply, several sites like DriverSide and RepairPal have
cropped up to cater to drivers who are keeping their old cars in shape instead of buying new ones.
Sales are up 10% from this time a year ago at Wagenwerx Inc., an independent Volkswagen specialist in Wyndmoor, Pa., says owner
Howard Pitkow. Though he isn't seeing a big increase in the number of customers, he says orders are more complex, with some bills up
25% to 50%.
"People aren't jumping to get a brand new car," he says. "They want to keep what they have. It's worth it to them to maintain it." Mr.
Pitkow says business began increasing around the time of the presidential election. "Since then it's really been going crazy," he says.
"Some need $1,500 worth of repairs or more, and when we give the customer the bill, they say go ahead and do it," he says.
"Overall, our members have reported an increase in customer count," says Angie Wilson, vice president of marketing and communications
for the Automotive Service Association, a trade group based in Bedford, Texas. "People are coming in wanting repairs."
The average trade-in age for cars has crept upward to 6.2 years in October, up from 5.8 years in October 2007, according to auto
industry researcher J.D. Power & Associates. Keeping a car longer usually works for owners because cars last longer and are more
reliable than ever.
But the change is chilling for a U.S. auto industry accustomed to cranking out more than 15 million new vehicles a year. Light-vehicle sales
fell 18% last year to 13.2 million units, the lowest since 1983. Today, showroom traffic continues to dwindle.
While many in the industry predict a return of demand for new vehicles within a year, others detect a deeper shift in consumer
attitudes. John Wolkonowicz, an analyst with IHS Global Insight in Lexington, Mass., acknowledges that U.S. drivers have a proclivity for
big, new flashy vehicles. But that could change for good in a drawn-out recession. If the downturn lasts another year or two, he says, a
"new frugality" could take hold that would include longer-term car ownership and disdain for pricey new models.
Charles Eisenson, a retired dentist from St. James, N.Y., says he considered a number of fuel-efficient new vehicles to replace his
family's 2004 Cadillac Escalade SUV. But watching his wealth shrink in the past few months -- while fuel prices have dropped --
heightened his sense of financial vulnerability. "We decided to wait," he says.
Buying the Warranty
Instead, Dr. Eisenson says he'll keep the SUV -- a model that typically gets 12 miles per gallon -- and buy a three- or four-year extended
warranty for it.
An extended warranty -- which can cost $4,000 or more -- along with the cost of more-frequent oil changes and replacement parts, still
usually costs less than the monthly expense of financing or leasing a new car. And because modern cars are more durable than ever, they
generally require less maintenance to stay in good shape.
Changing the engine oil regularly is still the most important step toward keeping a car healthy. The interval for this varies widely from
car to car. Most vehicles can go 5,000 to 7,500 miles between oil changes. Some models that come from the factory with synthetic
engine oil can travel up to 15,000 miles between changes. However, many drivers stick with the longstanding -- some say outdated --
schedule of changing every 3,000 miles.
Brownstown Township, Mich., mechanic Ed Wuerth says people are keeping their cars longer.
Maintaining proper tire air pressure and wheel alignment helps tires last longer. Replacing fluid in the transmission, cooling system and
power-steering every two years also helps minimize wear. Mechanics say that setting aside a few hundred dollars a year in a repair fund,
starting when the car is new, is the best way to make sure you have enough money on hand to fix typical problems that crop up after
several years.
Keeping Up Appearance
The automotive aftermarket is taking advantage of the upkeep trend. Blue Magic, a maker of leather-care products and cleaners -- what
are known in the industry as "appearance chemicals" -- just increased its line to eight products from three a year ago, says spokesman
Jeff Schell.
Even car makers are getting involved. Daimler AG's Mercedes-Benz brand last year began selling insurance for wheel and tire
replacement, in part because drivers are keeping their cars longer. Last month, the car maker expanded the program to include cosmetic
paint and body damage.
Drivers say rolling up the miles in an aging vehicle has its down side, even when the car is basically reliable. Parts eventually wear out, and
the driver's sense of security often wears thin.
"There are so many little things that can go wrong," says Marcelle Wellington, who works for a market research company in Bellevue,
Wash. Replacing a cracked headlight lens on her hazelnut-colored 2003 Saab convertible cost $250, and other small fixes can be
surprisingly expensive.
It's also difficult to get over one's desire for something new. Ms. Wellington admits that she'd prefer to drive a newer car, but a slump
in the used-car market means she'd get little if she traded in the Saab. Overall, keeping it makes better financial sense.
That doesn't keep her from dreaming about a new Audi A4, which she says is more stylish and has technological and comfort features that
weren't available when her old car was built.
"The Saab has been a good, reliable car, but I really miss having the latest gadgets," she says.
—Sarah E. Needleman contributed to this article.
Write to Jonathan Welsh at jonathan.welsh@wsj.com
By JONATHAN WELSH of the WALL STREET JOURNAL
JANUARY 14, 2009
For decades, Ashley Fletcher ditched his cars after they reached 50,000 miles.
Now he plans to keep his 2004 Lexus RX 330 for two or three more years -- or until
it reaches 70,000 miles. If all goes well, he might shoot for 100,000 miles.
Like many drivers, Mr. Fletcher scaled back his automotive aspirations because of
the economic downturn. "My portfolio lost about 40% last year, so I'm certainly in
no mood to buy a new car," says the retired sales and marketing executive from
Pinehurst, N.C. To that end, he's making a point of changing his oil and other fluids
regularly and keeping his tires properly inflated to help them last longer.
Until recently, many drivers treated their cars less like transportation and more
like handbags, jewelry and other trendy accessories. Drivers craving the latest in
mechanical "bling" found easy credit and inexpensive lease deals attractive enough to
get a new ride every three years or so.
Today, the scarcity of attractive terms for financing and leasing means that many
people are keeping the cars they have. As a result, car dealerships are quiet while service shops buzz.
"The three-year ownership mentality has crumbled," says Trevor Traina, founder of DriverSide, a Web site that helps people keep up
with car maintenance and avoid overpaying for repairs. As new-car sales declined sharply, several sites like DriverSide and RepairPal have
cropped up to cater to drivers who are keeping their old cars in shape instead of buying new ones.
Sales are up 10% from this time a year ago at Wagenwerx Inc., an independent Volkswagen specialist in Wyndmoor, Pa., says owner
Howard Pitkow. Though he isn't seeing a big increase in the number of customers, he says orders are more complex, with some bills up
25% to 50%.
"People aren't jumping to get a brand new car," he says. "They want to keep what they have. It's worth it to them to maintain it." Mr.
Pitkow says business began increasing around the time of the presidential election. "Since then it's really been going crazy," he says.
"Some need $1,500 worth of repairs or more, and when we give the customer the bill, they say go ahead and do it," he says.
"Overall, our members have reported an increase in customer count," says Angie Wilson, vice president of marketing and communications
for the Automotive Service Association, a trade group based in Bedford, Texas. "People are coming in wanting repairs."
The average trade-in age for cars has crept upward to 6.2 years in October, up from 5.8 years in October 2007, according to auto
industry researcher J.D. Power & Associates. Keeping a car longer usually works for owners because cars last longer and are more
reliable than ever.
But the change is chilling for a U.S. auto industry accustomed to cranking out more than 15 million new vehicles a year. Light-vehicle sales
fell 18% last year to 13.2 million units, the lowest since 1983. Today, showroom traffic continues to dwindle.
While many in the industry predict a return of demand for new vehicles within a year, others detect a deeper shift in consumer
attitudes. John Wolkonowicz, an analyst with IHS Global Insight in Lexington, Mass., acknowledges that U.S. drivers have a proclivity for
big, new flashy vehicles. But that could change for good in a drawn-out recession. If the downturn lasts another year or two, he says, a
"new frugality" could take hold that would include longer-term car ownership and disdain for pricey new models.
Charles Eisenson, a retired dentist from St. James, N.Y., says he considered a number of fuel-efficient new vehicles to replace his
family's 2004 Cadillac Escalade SUV. But watching his wealth shrink in the past few months -- while fuel prices have dropped --
heightened his sense of financial vulnerability. "We decided to wait," he says.
Buying the Warranty
Instead, Dr. Eisenson says he'll keep the SUV -- a model that typically gets 12 miles per gallon -- and buy a three- or four-year extended
warranty for it.
An extended warranty -- which can cost $4,000 or more -- along with the cost of more-frequent oil changes and replacement parts, still
usually costs less than the monthly expense of financing or leasing a new car. And because modern cars are more durable than ever, they
generally require less maintenance to stay in good shape.
Changing the engine oil regularly is still the most important step toward keeping a car healthy. The interval for this varies widely from
car to car. Most vehicles can go 5,000 to 7,500 miles between oil changes. Some models that come from the factory with synthetic
engine oil can travel up to 15,000 miles between changes. However, many drivers stick with the longstanding -- some say outdated --
schedule of changing every 3,000 miles.
Brownstown Township, Mich., mechanic Ed Wuerth says people are keeping their cars longer.
Maintaining proper tire air pressure and wheel alignment helps tires last longer. Replacing fluid in the transmission, cooling system and
power-steering every two years also helps minimize wear. Mechanics say that setting aside a few hundred dollars a year in a repair fund,
starting when the car is new, is the best way to make sure you have enough money on hand to fix typical problems that crop up after
several years.
Keeping Up Appearance
The automotive aftermarket is taking advantage of the upkeep trend. Blue Magic, a maker of leather-care products and cleaners -- what
are known in the industry as "appearance chemicals" -- just increased its line to eight products from three a year ago, says spokesman
Jeff Schell.
Even car makers are getting involved. Daimler AG's Mercedes-Benz brand last year began selling insurance for wheel and tire
replacement, in part because drivers are keeping their cars longer. Last month, the car maker expanded the program to include cosmetic
paint and body damage.
Drivers say rolling up the miles in an aging vehicle has its down side, even when the car is basically reliable. Parts eventually wear out, and
the driver's sense of security often wears thin.
"There are so many little things that can go wrong," says Marcelle Wellington, who works for a market research company in Bellevue,
Wash. Replacing a cracked headlight lens on her hazelnut-colored 2003 Saab convertible cost $250, and other small fixes can be
surprisingly expensive.
It's also difficult to get over one's desire for something new. Ms. Wellington admits that she'd prefer to drive a newer car, but a slump
in the used-car market means she'd get little if she traded in the Saab. Overall, keeping it makes better financial sense.
That doesn't keep her from dreaming about a new Audi A4, which she says is more stylish and has technological and comfort features that
weren't available when her old car was built.
"The Saab has been a good, reliable car, but I really miss having the latest gadgets," she says.
—Sarah E. Needleman contributed to this article.
Write to Jonathan Welsh at jonathan.welsh@wsj.com
