Buying a car is so hard. Large sums of money are involved. The consequence of making a mistake is very regrettable. The purchasing process is arduously unpleasant. And there isn’t enough information to make good decisions with. Fortunately, there is a very simple way to measure car quality. I am quite surprised that so few people utilize it. It has been my family secret.
Your insurance agent.
A low insurance premium means, statistically, fewer claims, in frequency, monetary amount, or both. Whatever troubles you will experience with the car: break-downs, accidents, theft, etc. eventually become insurance claims and become a single number for you: the premium. In a very straight-forward way, the best car, in terms of quality, is the one with the lowest premium to price ratio. Pick the cars that interest you, ask your agent for their rates, divide the rate with the car prices, and, voila, that’s your car to buy. The only things left are color and trim options. Tools such as Edmunds are really helpful.
ABC News reported that American cars have improved in both quality and price. They have been learning from the Japanese and Germans on quality for several decades. Since the bail-out, they have reduced labor costs, some $4,000 per car. This must’ve sucked for Detroit auto-workers. That $4,000 dollars meant loss of jobs, closure of factories, and reduction of benefits.
Thomas Friedman taught us to always think globally. You can survive only if you are the best in the world for what you do. Halfway across the world, there are thousands or millions of people that do not care about preserving your way of life. And none of your neighbors, friends, or even family are paying $4,000 extra, regardless of who made the car.
I am glad that American cars are now better. I am happy that they are now globally competitive. Don’t take my word for it. Ask your insurance agent.