The Rembis Report And Other Fascinating Topics - Volume CXIX

As we head into the American “Holiday Shopping Season” this newsletter is the second of six weekly editions in a series about the cost of everything, overspending, corporate profits, and general wastefulness. I am looking at what we do to save money while companies try to get us to spend more and will examine why cars and houses cost so much. Is the price of food fair? What about everything else? Is there anything we can absolutely do without? Who can afford to buy anything, really?

Click here to read: If It Ain't Broke, Don't Fix It - Part I

You never know what you are going to get with a rental car. It is always a surprise. Not a total surprise, though. You know what you like. It might be a compact, a full size, a van, or SUV, and you are probably familiar with the basics of operating it even if you have never driven that exact car before. But as new technology creeps into our lives, if you drive an older model vehicle daily, like I do, stepping into a relatively new vehicle takes some adjustment.

My rental vehicle in Iceland was a Mitsubishi Outlander hybrid. I could not start it. The rental agent had to come out and show me. You won’t hear the engine turn on until you hit the accelerator and start moving, and even then, it is notoriously quiet. Took a while to get used to, but I got the hang of it. Other than that it was a fine car. No complaints.

In Michigan’s upper peninsula they gave me a Honda HR-V and I could start it and drive just fine. But it had a lane sensor feature that kept shaking the steering wheel when you edge a little more left or right than the vehicle liked. That was annoying. I found the control switch for that feature and shut it off. It also had a TV screen in the center of the console that flashed images of the rear when backing up, or the right or left when putting on a turn signal. Again, annoying. I use mirrors and turn my head to see things so I know exactly what I am looking at and am able to gauge the size of objects in my vicinity. Looking at something on a TV screen doesn’t convey all the information I want and can distort the size of objects.

It took me three days to find the radio. At first, I thought there was none, that you had to sync up your phone via Bluetooth, and that was the only option. You can’t play a CD, there is not even a USB port for a stick full of mp3s, and of course, cassette decks are no more. Somehow, in trying to try to figure out how to shut off the cameras, which I could not, I found the AM/FM radio hidden deep within the windows of the touchscreen. Then, I found out that the speakers were crap.

They really were. Audiophiles trying to tune this thing will take offense. Controls offered only the basics: bass, treble, balance, and fade. You would think that with all the technology at your fingertips it would be nothing to add software for a graphic equalizer, dynamic bass boost, and total surround sound. But no. Screw anybody who truly enjoys music while they drive. Thanks for nothing Honda.

Except for inundating us with a screen full of safety features that help take eyes off the road way more than buttons would. This vehicle is not for me. The cupholder is in the wrong place, and there is a shelf hidden under the console, perfectly positioned to help you forget whatever you put there. Hard pass.

I like a simple ride. Music, cruise control, cupholder, comfortable seat. I don’t need more than that. Good wiper blades are always nice, but otherwise, It makes me wonder if anybody actually utilizes everything a car has to offer now? I can go without the touchscreen. Never had a car with one. All the extra gadgets, like the lane controller, the cameras, seat warmers, warnings that chime, chirp, beep, and talk, are all things that you will pay for whether you use them or not. Most of them can’t be shut down or ignored.

The extras are there in the name of safety. So they say. Aside from airbags and reinforced windows and cages for rollovers, the only way to make them any safer is to stop distracting the drivers, but that is exactly what all this stuff does.

But do we need cars to be safer? Not really. Every life saved just gives that person more time to destroy the Earth. It might mean less spent on lifesaving procedures, sure, but then medical personnel have less work and their hours get cut, and prolonging death may also contribute to the rise in funeral costs because they can’t bury you when you are alive. So think about that when you are dead. There is a trade-off for everything.

In researching today’s article I had a nice chat with Bard, the AI experiment by Google. I usually seek out information on my own instead of asking for help, but this subject is big, and in looking for answers, I found multiple resources all offering similar statistics, with many being outdated. So I asked Bard, who can search the whole of Google and find reliable, specific answers at instant speed, some pointed questions.

I wanted to know if it is at all possible to build a car without a computer, like we had when they were first installed in vehicles 50 years ago. The thing about Bard is that it gives you long thoughtful answers at instant speed. So I boiled down our conversation to a few simple Q & A’s, shown here:

Q. How difficult would it be for a manufacturer to eliminate chips/computers from a car and start a new line of simple vehicle, a stripped down car like we had before computers in cars?

A. It would be very difficult for a manufacturer to eliminate chips/computers from a car and start a new line of simple vehicles. Semiconductor chips are used in a wide variety of automotive components, including engine management systems, braking systems, and infotainment systems. Even the most basic cars require dozens of semiconductor chips to function. It is unlikely that we will see cars without chips/computers on the road anytime soon. Eliminating chips/computers from a car would be very difficult, expensive, and would make the car less safe and less feature-rich.

The rest of our conversation revolved around car and parts pricing in the U.S. and overseas. When I asked for citations on Bard’s sources, it always sent me a link, so I consider Bard to be accurate.

Q. Can you provide an example of what a car costs as parts to the manufacturer, versus the MSRP?

A. Sure. Here is an example of what a car costs as parts to the manufacturer, versus the MSRP: Car: 2023 Toyota Corolla LE MSRP: $21,100 Cost of parts to the manufacturer: $13,500

That is a 56% markup. All those little pieces add up and you are not ever going to go out and buy them all individually and build your own car. There are tons of other little things that might feel like price gouging, but this is what it costs for manufacturers to stay in business. Dealers might even charge more if inventory is low or a car is in demand.

Q. What is the cheapest new car in the USA?

A. The cheapest new car in the USA is the 2023 Nissan Versa, which starts at $17,075 (MSRP).

Q. But what about other countries? Many others don’t make as much as Americans and there are cars all over the world. What about them? How much are they paying for cars?

A. Yes, there are cheaper vehicles available in other countries than the Nissan Versa base model. Here are a few examples:

• India: The cheapest new car in India is the Tata Tiago, which starts at around $4,000.

• China: The cheapest new car in China is the Chery QQ, which starts at around $3,500.

• Brazil: The cheapest new car in Brazil is the Renault Kwid, which starts at around $6,000.

• Mexico: The cheapest new car in Mexico is the Nissan Tsuru, which starts at around $8,000.

It is important to note that these cars are not available in the United States. Additionally, the quality and safety of these cars may not be as high as the Nissan Versa.

You are missing out if you don’t click all the links today. If you want to get any of those cheap cars, you can go to their respective countries of manufacture and have one shipped, but by the time you do that you would have been better off going to your local dealer and buying something safety rated for wherever you live. You will spend just as much and it will probably come with a computer built into the dashboard. Plus, you will never be able to get parts.

Or, if you are old school like me, you will keep driving whatever you happen to have now, for as long as it will run. And even if it is a little broken, does not necessarily mean you must fix it. There might be a tear in the seat cushion, a couple of dings and dents, or a scratch from that time you cut somebody off in traffic and they followed you into the grocery store parking lot and keyed the hell out of your passenger side, but so what? It still runs. Don’t worry about it. You can’t see it while you are driving and you never look at the passenger side anyway.

My daily driver, the Hyundai Santa Fe has a fickle gas gauge. It works sometimes. Most of the time, it just says empty, and the indicator light that tells me there is a problem (meaning the gas gauge), stays on all the time. But they already got me to buy two of these things. Not again.

The first time was in the Hyundai Sonata we once owned. It cost $800 to fix because the sensor is located within the gas tank. In addition to it being a $300 part, it is $500 labor. Then we had the same problem with the Santa Fe, and it cost another $800. Then it broke again. Forget it. I can live with a broken gas gauge. Every time I fill up, I set the trip odometer to zero and fill up when I hit 200 miles or so. It works for me. So, even if it is broken, I am not fixing it if I don’t really have to. Let them keep their spare parts.

I have hobbled cars along my whole life. Bought plenty of parts from junkyards from time to time. The Santa Fe is a 2009 and doesn’t give me much trouble, but I still shop for parts and pay for auto repairs at least once a week. Not for myself, but in my work at Florida Fish & Wildlife Commission. I manage a fleet of around 40 state vehicles. One is 24 years old and still going strong. Some were built last year. We follow a strict maintenance schedule and fix stuff as soon as it breaks. But sometimes, you can’t get a part.

Try finding a window visor for 2001 Dodge Ram. You won’t. They stopped making those years ago, and if you do find a used one from a junkyard, you are looking at anywhere from $150 to $300 for a single visor that is probably ripped, stained, and smells like tobacco, and they don’t take credit cards. (Just kidding. They all take credit cards. But, that would be funny if they didn’t right?) Every time I have purchased new aftermarket parts, they don’t fit - ever! So I end up shipping them back for a refund.

At some point you have to give up and get a new car. Or stop driving.

But that is not happening, is it?

I sold cars in the 1990’s. One dealership I worked at, Dishman Suzuki in Spokane, I had a great boss. Dewey Hebeler. He was a fun guy and loved chatting about sales with other salesmen. No matter what anyone sold he wanted to hear about it. One customer I had was a salesman who told me he needed a car with somewhere around 70 - 80,000 miles on it, so he could put on another 40 or 50K in the next year and not worry about it. He would trade it in and get another car the next year with 70 or 80K on it, and keep doing that over and over. Said he had been doing that for years. Better than a lease, and if he got a lemon, he could usually get half his money back out of it.

We went on a couple test drives and he found one that met his criteria for around $5,000. Then he showed us his trade that had over 100,000 miles on it, just like he told me he would, and he and Dewey had a fun time smoking cigars, laughing about driving around the state, and haggling over the difference. I never saw a guy buy a car so fast. When he explained his logic in buying used and trading in a car that still worked, paying out that lump sum of a few thousand dollars every year, and just driving whatever came his way at the time, it seemed to make sense. His buying season was the height of summer, he said, because he could spot oil leaks and red flags like AC and radiator problems more readily. So, this was his routine every July or August. It worked for him.

But that does not work for everyone. Lots of people prefer new cars. Many adhere to some self-prescribed buying system which makes them most comfortable. Two or three year leases. Selling their car and getting a new one at five, seven or ten year intervals, or when a car reaches a set mileage. Or it gets smashed. Or they just feel like something new. I generally drive a car until it won’t move anymore so the only person I need to concern myself selling it to is the junkyard whose final offer is whatever they will give me, take it or leave it. Know what? I have never left the junkyard in search of another one to buy my used heap. It is an easy transaction.

I am not the typical consumer. I spend thousands to fix state vehicles, and even though I know what things cost, have done my fair share of shopping, and absolutely understand what to expect when I hear what is broken, in my humble opinion everything costs too much.

It just does. Feels that way to me, anyway. I can’t get into ever thinking that anything is a good deal. I must just be wired that way.

Parts cost what they do for every reason you can think of. Take the guy who works out of his garage, somewhere up a dusty Montana backroad, grinding gears for transmissions. (I know they do because I used to sell steel and drill bits to machinists in the Yaak.) He gets the specs from the manufacturer, starts with the raw material, doubles the price, adds his labor to make the part, ships it somewhere, adds a premium for the shipping, so he makes money on that, then the guy who buys it doubles the price again and sells it. Everybody gets paid. When the gear breaks, you will pay even more because it is a rarity, new or used. You might need a whole new transmission. At that point you are better off buying a new car.

Regardless of how you feel about mining for raw materials for electric vehicles or pumping oil out of the ground, it is going to happen no matter what, whether you decide to drive or not. Those buses and trains need everything the cars do, and you are going to pay to ride them.

You are not going to fight the system and win. The deck is stacked against you, so get what you pay for and deal with it.

But Mike, why can’t they just make cheaper cars, without all that extra stuff? You know, like with everything you like, but none of the stuff you don’t care about?

You mean like three cameras? It is not cost effective to redesign cars for people like me who don’t care about all the bells and whistles. It is easier to keep making vehicles overloaded with features whether anyone uses them or not, because the manufacturer makes money on every piece of the car, and the more pieces it has, the more money they make.

In case you wondered about comparing the average cost of a new car in the U.S. in 1973 to the average cost of a new car today, I asked Bard about that, too.

Q. When adjusting for inflation and the cost of living, are new cars more expensive now than they were 50 years ago? Or, are they actually cheaper now?

A. New cars are more expensive now than they were 50 years ago, even when adjusted for inflation and the cost of living. According to the Bureau of Labor Statistics, the average cost of a new car in 1973 was $4,046.19. In 2023, the average cost of a new car is $48,008. When adjusted for inflation, the average cost of a new car in 1973 is equivalent to $30,384.24 in 2023. This means that the average cost of a new car has increased by over 50% since 1973, even when adjusted for inflation.

All that inflation has to come from somewhere, so I thought perhaps, since the average car can last for years, with folks like me pushing them to their limits, hanging on to cars as long as possible, eking out every last mile, even from the tires and brake pads, it hit me that new and used cars may sit around longer, waiting for somebody to drive them. I thought that maybe my lack of participation in buying new was a strong contributing factor to prices rising for automobiles. I started to feel like it was my fault that prices got so high. That cheapskates like me made all the prices go up. I asked Bard.

Q. Do people who do not buy new cars, only used, contribute to the increase in prices of new cars?

A. No, people who do not buy new cars, only used, do not contribute to the increase in prices of new cars. In fact, the opposite is true. When more people buy used cars, it reduces the demand for new cars, which can help to keep prices down.

No mea cupla from me baby! I am not to blame. Find a senate or a congress or a president you don’t like and blame them. If it wasn’t for guys like me, prices would be at an all-time high.

They are already at an all-time high, Mike.

Then, without me, they would be way worse, wouldn’t they!

You’re welcome.

Thanks for reading.

Click here to read: If It Ain’t Broke, Don’t Fix IT - Part III

If you are new to the Rembis Report and would like to read any of the previous issues, PLEASE CLICK HERE to access the archives. To read it from the beginning, PLEASE GET A COPY of The Rembis Report: An Observation.