LET’S MAKE A DEAL

A primary principle of investing is, “Buy low, sell high.” It is basic, common sense. With today’s economy, other phrases come to mind: “It’s darkest before the dawn”; “Buying opportunity”; “Buy when it seems the bleakest”. Such advice is hard to follow when the stock market is tumbling, the housing crisis continues to mushroom, layoffs are in the news daily, and everyone talks doom and gloom. With all of this negative karma, it takes a strong individual to be a contrarian; buy for the future, by buying during the worst of times. But history shows that a wise, disciplined investor should do just that, despite the adversity. This also holds true with buying a vehicle.

Now is the best time in years to buy a new ride. Traditionally, this time of year is a good time to buy anyway. As summer fades, so does the current model year. Manufacturers and dealers want the old models off the lots to make room for the new. Also, as winter approaches, buyers are hesitant to subject a new car to ice and snow, often choosing to hold off on a purchase until spring. As a result, aggressive incentives are marketed to overcome reluctance, and move last year’s vehicles.

The escalation of gas prices has helped to make this a perfect time to buy. Overnight, buyers deserted the gas guzzling SUV’s and pickup trucks, replacing them with anything green. It is now difficult to buy a compact car, and nearly impossible to find a Prius or other hybrids, without a long wait and paying a premium. Meanwhile, dealers’ lots are overflowing with fleets of pick-ups, SUV’s, minivans, and some very attractive crossovers. All of these vehicles are now available at bargain basement prices. Check the papers, television ads, or maineautomall.com: a new Mustang for only $14,995; a Ford Edge with an MSRP of 26,035, selling for $19,745; trucks of all shapes and sizes for thousands off of the sticker prices. No matter what type of vehicle you might be interested in, dealers do not want you to leave the showroom empty handed. Auto dealers have never wanted, or needed, your business more than they do now. Now is the perfect time to buy.

The down turn in the economy scared the consumer. Suddenly they stopped spending. Vehicles continued to come off the assembly lines in droves. Manufacturers eventually slowed their production, but not before inventories were at record levels. Meanwhile, the housing crisis worsened. Banks and lending institutions lost millions. Their restructuring has now begun. For them to recover, they want to loan you money. In fact, to survive, they must loan you money. The Fed did their part, and responded to the impending economic doom by lowering interest rates several times. This year, in particular, is the best time to buy. Inventories are high, interest rates are low, and dealers want to deal.

Another reason to buy now is that never before has there been a better selection of well designed, quality choices available to the consumer. Both domestic and foreign manufacturers are now making great vehicles. The Ford Flex, an alternative to an SUV, is just now available, receiving glowing reviews. Ford knows that the buyer will be reluctant to buy a large vehicle, but Ford must succeed with its launch. They will do whatever it takes for it to sell. Deals will be made. Similarly, the “new” Chrysler must succeed with its recent crossover entry, the interesting Dodge Journey. Deals! General Motors’ economic challenges are in the news daily. For GM to recover, they must sell vehicles. The newly revamped Saturn line is ready for delivery at attractive prices. The Japanese auto makers are not immune. Overall, Toyota’s sales are down. Even sales of the seemingly invincible Honda CRV are off. Deals must, and will be made.

For any, or all of these reasons, if you are entertaining even the slightest notion of buying a new vehicle, any vehicle, now is your absolute best time in years to buy. Be a disciplined, wise contrarian, and lead the economic recovery. By the time that your neighbor feels better about his economic future, the deals will be gone and the dealers may not be quite as friendly. Buy now, and invest the savings for your future.