Global Meltdown. Credit Crunch. Panic.
I stopped watching the news because of all the gloom and doom. Yahoo Finance this morning had a glitch as one of their charts showed the stock market down over 1000 points, as if its not bad enough. Ford and General Motors in addition to a market share slide they just can't seem to stop now are battling stock prices that for GM are at 50 year lows.
Overseas markets have seen wide spread panic set in as everyone speculates when, or if we might see the bottom of the market. A good friend of mine who is very knowledgeable in all things financial seems to think we might see 6000 before this is all over. Oil is closing lower and lower each day, of course gas prices don't fall nearly as fast as they rise when oil is on the upswing.
When will it end?
The sad fact is I don't know, I am not sure anyone does right now. It doesn't change the fact that you like cars, you wouldn't be here right now if you didn't. The reality is in a market that has lost 40% of its value in the last 12 months, car buying decision are just one of many things that are probably going to be reconsidered with a little more fiscal responsibility.
My friend who thinks the stock market still hasn't seen bottomed traded his S-Class for a Honda Civic. He said it was to save money on gas (and he doesn't need to worry about it) but still a decision that at the time I didn't understand. Right now I think he is a genius! A smaller more fuel efficient car makes sense right now given economic uncertainty, even for those with money to burn.
And therein lies the paradox...
There are some great new cars coming in the next few months, but will it matter.
BMW has introduced the new 7-Series. Agent 001 had the opportunity to spend some time driving it last week and he reports that it is awesome. Power, speed, luxury and of course a big price tag.
Chevrolet is making final preparations to the Camaro. The 302 HP direct injection V6 looks to be the performance bargain of 2009 with horsepower equal to that of Mustang GT's, but 400+ HP V8's promise to round out the lineup.
Why mention these two cars in the same story you might ask. The answer is quite simple, it is the economics behind each car. For $70k + you can get behind the wheel of the big BMW, burning through premium fuel at a blistering rate as the big V8 effortlessly whisks you to each destination on your itinerary OR you could buy a Camaro for less than half the price of the BMW and pick up a more efficient ride in V6 form which still has the ability to get you places quickly.
Granted buyers of the 7-Series wouldn't cross shop the Camaro, however these cars are used as examples of some of the exciting cars coming our way in the next few months. Options are plentiful, and the lineups at most makers have some pretty exciting cars.
You could always play it safe and Honda is waiting there arms wide open with the most fuel efficient lineup of cars sold in America currently. So efficient in fact that mark-ups on the Civic were commonplace this past summer in certain markets including Southern California. Fuel efficient, and fun in some cases a Civic serves up a lot of options not previously seen on prior generations allowing a case to be built for choosing this car over others currently on sale.
There are a lot of options out there, but lets address it this way. If the old adage is true that you hope for the best but prepare for the worst, lets assume the experts are right and we are in for a year or two of economic uncertainty.
How will this affect your buying decision?
Will you simply shrug your shoulders and put your deposit on the BMW 7-Series or equivalent, or do you play it safe and purchase something a little cheaper and more sensible?
I for one hope this economic crisis ends soon, but there is always the unknown, and a little planning for that now can help to head off trouble later on.
So share with us how will the current economic situation affect your next vehicle purchase?