Saturday, June 25, 2011

Watched Pot

After two weeks of no bites on the Mazda, I decided to give up for the weekend and relax with the family out of town. This, of course, instantly led to emails from three interested buyers, four if you count the low ball dealer cash offer. At least he was very polite about it. Two came from Craigslist, one from and the dealer from Ebay. is also the originator of a bazillion spam emails that at this very moment, threaten to overwhelm the mail servers at Yahoo. Sorry Yahoo. Avoid

As a sign of some sort, I also received my lost vehicle title in the mail from the DMV today, along with finding my second set of car keys and remote. I could have done without both, but it makes the transaction that much cleaner. Now all I need is the $900 the IRS owes me for an old tax refund to help with the down payment. Also, since we're asking for miracles, lets have the insurance company (or the completely MIA police) do their job and find the uninsured motorist who owes me $1000 for hitting and running away from Titania's car. That's a financial hole I've filled in with emergency savings and have completely blanked from my consciousness.

Wish me luck. Best case scenario leaves me on the side of the road, carless tomorrow. If I sell the Mazda I'll likely have to wait until early July for the white GTI I've decided I really want (black is more readily available). This is actually alright because sales tax in California drops 1% in July, making this the magic week in which it actually makes sense to rent a car for the purpose of reducing my sales tax liability. See what happens when I get crazy ideas in my head?

Thursday, June 23, 2011

JD Powers and the GTI

This was announced today. Although Volkswagen is still near the bottom of the pack in the manufacturer category, the GTI was in the top three in its class.

Wednesday, June 22, 2011

It's Definitely Sucking

The used car market is a mess. People are driving their cars longer and looking for economical used car. Gas prices have created a mental shift for many people, myself included. I've got a mental benchmark of what good gas mileage is now, and it's significantly higher than it was five years ago. This is driving up the price of economical cars, while cars that don't fit that description are ignored.

Normally you have a book value for your car, an amalgamation of Kelley Blue Book, NADA and Edmunds. Then you have the private party resale value or trade in price. Usually there's a reasonable spread for these two numbers. For example, my wife's Scion is valued at $6k and would normally retail for $9k. However, in the booming used car market, her $6k car is actually selling for $11-12k. Meanwhile, my non-economy Mazda 6 has a book value of around $7k and theoretically sells for $9k, but isn't economical, so it languishes.

So yes, there are great deals on new cars. Volkswagen offers 1.9% financing for up to 5 years and they're negotiating like mad to move cars, even at below invoice pricing. At least that's true with a car like the GTI. If you want a TDI, there's far less negotiating power due to demand and limited supply (it's hugely economical). The problem is, if you have a used car, you're either really happy to drive it until the wheels fall off if it's economical (my wife's car) or you have trouble selling it (my car). The dealers are happy to take trade ins, but you'll take a bath and suddenly that low invoice pricing and cheap money is awfully expensive looking as your down payment evaporates.

Tuesday, June 21, 2011

Counter Intuitive

The GTI is a counter-intuitive choice. It's essentially a Golf, a somewhat sensible economy car that retails for around $18k. However, the GTI is much more than that, and with a much more than that price tag starting around $25k. As my father pointed out on Father's Day, you could have a Camry for $16k, so...?

Yeah, about that. For that $7k price difference, roughly $125/month in 5-year financing terms, what you're buying is far more up market. The engine in the GTI is the 2 liter turbo from the Audi line that can burn rubber in first and second gear while providing 25 MPG overall. The interior, although it doesn't come standard with leather, is far superior to anything under $30,000 (you can have leather for about $30,000 with the every option Autobahn package).

It's comfortable, it's quiet, and it puts a grin on your face when you drive it. It's made in Germany, not in Mexico, if that's a plus for you. At the same time, it's not a BMW or Audi, if that's a plus for you. However, you've got to be willing to pay that $7k, that $125/month, for a premium Golf, which is a very European concept. The average GTI owner is male and 40, which means this 40 year old guy is turning his back on more mainstream cars his peers are driving: Passat, Camry, Accord or even the new Regal. Feeling sleepy yet? Well, you could be getting a slightly used BMW or Audi, so clearly it's not all image. There's something that's just compelling about this understated "hot hatch."

Then there's reliability. Volkswagen has had a bad reputation, "had" in the past tense. There are many stories about poor reliability from the 80's and 90's and even now JD Powers puts Volkswagen towards the bottom of the pack in initial quality. I'm not concerned about initial 90 day quality though. I will assume that the car will go back at least once to fix some small issue or another, like a dribbling rear windshield washer. What I care about is long term reliability, and VW seems to be much better at that.

The car is a Consumer Reports top pick for 2010. This is a company that doesn't recommend a lot of BMWs and high end cars because of reliability concerns. The enthusiasts love it as well.  Check out all these awards:

It's no wonder then that the residual value is high, and you would be hard pressed to find a GTI used car bargain.

This is all in spite of the GTI not being great at any one thing. It's simply above average at everything. You get the impression that it could have greatness if it just exceeded it's price range; another 20 horsepower, better brakes, different stock wheels and tires. It does all this with evolutionary styling and class that the likes of BMW and other top marques have simply given up on (as has VW but with a few exceptions). A MKVI looks much like a MKV and will likely look much like a MKVII when it's released next year. It had it's period of being lost in the woods, but Volkswagen has learned not to mess with a good formula.

Monday, June 20, 2011

The Waiting

I've done the research. I've wrangled the finances. I've even test driven the car and chosen the dealer. Now it's a waiting game. I'm waiting because I need to sell my current car, a hard to find 2005 Mazda 6 S Sportwagon with a manual transmission. It's turning out to be equally hard to sell. What's it worth? Who knows. Good luck finding one online to compare it. As I lower the price to attract buyers, the new car recedes in the distance, meaning I'll have to save for longer to get it. However, once the car is sold, the new car process will be moving very quickly.

I know what I want and it's only a matter of time. It will be a 2011 or 2012 (they're basically the same at my trim level) Volkswagen GTI.  We are probably six weeks from the 2012 model year, but I'm happy to take a 2011, since they're offering some special deals. If I were patient, as was my original plan, I would pick up a MKVI in July of 2013. My plans for patience were dashed when my wife's car was badly damaged and I started shopping early. Now I've got the bug.

I want four doors and a manual transmission. No packages. They're all too expensive and the four packages are not customizable enough. Plus the sunroof makes me feel claustrophobic and the Clarion navigation system is anemic. I would gladly pay for some a la carte options if they were available, like the steering wheel with controls, xenon headlights, or some 17" wheels, but the next step up in trim is a couple grand. Even the base model is pushing my budget, but any GTI is hardly a hardship.

Color? I'm somewhat ambivalent. I would jump on red if it were available (it's not). Black is easiest to get (the number one color according to the VW website). I'm a little tired of black. White is a bit harder but still possible.I've had two VWs in white before and I kind of want a break from that. If I have to order and wait: red. If I had to buy one now, probably white. Yes, white is growing on me.

I will be getting one perk, one extra option, an aftermarket head unit, navigation system, the Pioneer AVIC-X930BT. The system is a big toy, a way to make up for the fact that the GTI has fewer perks than the Mazda: no leather seats, climate control, or steering wheel controls. My brother is in the aftermarket car biz and has a guy.

So why the blog?  Two reasons. First, I won't stop talking about this car for ages after I buy it and this safely funnels that dialogue away from my other endeavors. Second, the InsideLine blog at Edmunds for the GTI was very helpful, mostly in just getting a feel for the car and I had wished there was more to read. I'll likely remedy that volume issue.