1: Hear hear for the durable Nissan, and for keeping well-running but old vehicles! I drive a ’93 4×4 pickup that I bought for 14k back in ’96, and have put 150k miles on it. It is long since paid for, runs like a champ, and since it has its share of dents, scratches and faded paint, I don’t care if it gets dinged in the parking lot by a door or shopping cart. Heck, I haven’t even washed it in two years. Because of a good driving record and the fact I only carry the minimum required insurance, it costs almost nothing to own. Plus nobody will bother to break in or steal it when it’s the crappiest ride in the lot.

2: I was working down in west Texas a few years ago. Wondered why I was seeing clean, well-maintained and customized $50,000 trucks and SUV’s parked in front of houses most people would just as soon burn down than live in. I mean crap-shacks and shanties. My answer: illegal aliens from south of the border working in El Norte put their money into the one thing they might be bring with them or pass to friends and family should they get deported. It’s mobile equity.

When I reached a stage in life where that car was no longer trustworthy (planning a 5000 mile road trip with some key dates along the way, including a party in Chicago and a training session in Seattle 2 days apart) I went with a brand-new, bottom-of-the-line 2004 Chevy Aveo. Paid it off in about a year. A couple years later my wife and I ended up working in different areas, so we bought a second (this time slightly used) Chevy Aveo, and paid it off in 6 months.

I know the resale value on these cars is nothing near what we paid for them. I didn’t buy them to resell them, though, I bought them to get me from point A to point B reliably and comfortably. That’s really the key — if you buy a vehicle you can afford in order to get to point A to point B, and the reliability/features are worth the difference in price from a used car, then you’re doing good. If you buy a new car with extra bling in order to show off to your friends, and you need creative financing to do it, then you’re SOL now that the credit market has returned to sanity.

Note I didn’t say the credit market “collapsed”, I said it “returned to sanity”. If you’re a good credit risk, you have your choice of loans — because banks need people like you on their balance sheets to cancel out the bad risks they already took! People who never should’ve got loans in the first place now can’t get loans… and people who can afford them can still get them.

As for the rest: never under estimate culture and how fickle it is. When I lived in Australia in 1990 people pointed out with pride that Americans kept cars for an average of 4 years but Australians kept them for 8. The price differential didn’t explain the gap.

By whom? The drivers or prospective passengers?

A lot of otherwise inexplicable economic behavior makes sense in terms of status signaling. I believe Harry Hutton wrote the definite paper on this. If Eugene Fama doesn’t get the next economics Nobel, Hutton probably will.

I’d like to think that that is changing and that a flashy new car is now seen as a pile of unsecured debt on four wheels, and a new SUV as a $100 weekly gas payment. Sadly, I look around and don’t notice much waning in the “too much car” trend despite the overabundance of warning signs against such behavior. Blogging Stocks reported this morning that during this short break from high gas prices Americans have already started to drive more and resumed purchasing fuel-inefficient vehicles.

There’s much to choose from but perhaps the Marxist insight that quantity changes quality is his most misleading and dangerous. We constantly see attempts to explore this, from the personal to the global. It fails immediately on the personal level, requires a few years to a decade to bring down cities and states, and 1 – 2 decades to bring down countries. So with the financing of shiny new gewgaws for individuals and social programs for societies. It’s death, but death a little delayed. Each level up the line states that it is exempt from the consequences visible in the level below. Yes, that behavior may have bankrupted individuals. (Financing new cars is the most common trigger of bankruptcy in the mid-20s set.) But it certainly won’t bankrupt our city’s pension system. Our state’s. Our country’s. It’s sheer quanity exempts the large system, which is qualitatively different from the small.