Spending Wisely Nobody else wanted any of my cars...
The first car I (Brady Holt) bought was a 2007 Ford Focus. The Focus, a compact economy car, got off to a rough start in the U.S., undergoing countless recalls and reliability scores that trailed similar cars.
By the 2007 model year, Ford Motor had ironed things out. But the auto market hadn't caught on. Car buyers assumed Focuses were still lemons, so they were dirt-cheap. In 2010, I paid just $5,900 for a car that's still chugging along more than a dozen years later.
Nobody wanted the other cars I bought, either...
The 2012 Kia Soul I bought in 2016 had a manual transmission, and good luck finding folks willing to drive those. When I called the dealer after it repeatedly cut the asking price, the sales staff there had just given up on trying to sell it and needed to fetch it back from another store.
And when I bought a 2019 Nissan Rogue amid the pandemic's used-car craze, it was the same price as older, more beaten up, but more critically acclaimed Honda Motor and Toyota Motor SUVs. And it was gathering dust while folks were snapping up those other cars as quickly as they could find them.
This is the advice I shared on Tuesday... If you can find a car that's good for you but that other car buyers aren't interested in, you can often score a great deal.
As I wrote, it's the same approach that our Stansberry Research editors take to buying stocks: finding something that you understand better than the market at large, then using that knowledge to your financial advantage. Today, I'll illustrate that point with some examples from today's automotive market...
Consider the Honda Civic...
I test dozens of cars every year, and the latest Civic is one of my favorites. It drives beautifully, has a luxuriously finished interior, and a ton of space.
But here's the problem... The Honda Civic isn't my own special secret. It tops many rankings for "best small car." More than 100,000 Americans have bought one every year for decades.
So Honda can feel comfortable charging a base price of $23,450, which is more expensive than most of its competitors.
When you're looking for the experience of a bigger, fancier car at a relatively low price, the Civic can be well worth that money. And it's still far below the average price of a new car. You don't lose by buying a Honda Civic.
But maybe you're not attached to the biggest back seat... the most polished ride and handling... or the most intricately constructed dashboard vents. That's where you get your edge over the market. You can identify a car that meets simpler needs at an even lower price.
Now consider the 2023 Kia Forte. It's not the newest compact sedan around, last fully redesigned back in 2019. It's not flashy, fancy, or fun. But I still liked the one I tested. It was comfortable to sit in... its controls were a breeze to figure out... and it was effortless to drive.
The Forte is too plain and simple for some folks. For others, the Kia name is a red flag that it can't shake... based on the South Korean company's ancient-history quality problems and its more recent infamy about its cars being easy to steal. But the Forte has demonstrated itself as reliable in Consumer Reports studies, and Kia switched to more secure ignition keys starting in the 2022 model year.
And the Forte has a starting price of just $19,690. By going for the less-acclaimed sedan, and passing up a few high-end perks you might not have been looking for anyway, you "beat the market" by more than 20%... ending up with nearly $4,000 extra to spend or invest in something other than your car.
The differences are magnified when you're shopping for a used car...
With new cars, similar models tend to cluster into a relatively tight price range. Everybody's working from a similar playbook. Used-car prices vary more widely, giving you more opportunity to pick up a bargain.
Let's say you're shopping for a used SUV with a price limit of $15,000. Many folks' top choice is the Toyota RAV4. It's a familiar name with an excellent reputation for reliability.
But because everybody already knows that, used RAV4s aren't cheap. We ran a search for used RAV4s for less than $15,000 within 50 miles of our Baltimore office, and we mostly found cars that were at least nine years old, had at least 150,000 miles, or both.
Then we checked listings for a lesser-known competitor, the Mitsubishi Outlander. Critics didn't love it as a new car, complaining that it wasn't very fast, its interior wasn't fancy, and its rear seat was hard to fold down.
With less name recognition and fewer people clamoring to own one, used Outlanders are a steal... like a 2018 model with 115,000 miles that we found for $12,200, or a 2017 model with just 84,000 miles that we found for $13,495. And if you're looking to save money on an Outlander as old as those RAV4s, we found a 2014 model with 145,000 miles costing a mere $8,461.
Meanwhile, the Outlander matches the RAV4 in the Consumer Reports' reliability study... And that's reflecting cars that are the same age – not a comparison between a moderately aged Mitsubishi and an older, more heavily used Toyota.
So by putting up with a few foibles and finding an overlooked vehicle, you can either get a much newer car with more life left in it... or get a much lower price on a car of a similar age and condition.
This process takes some work... As I said on Tuesday, the market isn't always wrong – there are plenty of cheap cars that you'd be wise to stay away from. It's easier to buy a car that everybody trusts and leave it at that.
Just know that you're paying a premium for that convenience. With some extra research, you can often "beat the market" – and keep the extra cash for yourself.
Do you have a story of finding an overlooked car, or do you need help finding one? We want to hear from you: [email protected]. We read every e-mail.
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Here's to our health, wealth, and a great retirement,
Brady Holt with Dr. David Eifrig
May 4, 2023