The most common car I have sold in the last five years is a rental car special: the fourth generation Ford Taurus.
That may sound like an aesthetically sad and mechanically mediocre reality. But the truth is my choices in what to sell and finance have always changed with the tides of the wholesale market.
Those last generation midsized Tauruses of the 2000’s, with the Vulcan V6 and the AX4N transmission, still represent the Detroit equivalent of a Camry or Accord in the older used car market. Especially compared to the nightmarish Chrysler LH sedans equipped with the Soviet quality 2.7 Liter engine, and the cabal of endless mediocrity that represented GM’s pre-bankruptcy midsized lineup.
I like financing Tauruses because you can still get them cheap at the auctions, and retirees will often get the vehicles maintained at the new car dealership with OEM parts. Conservatively driven and well maintained cars with cheap replacement parts are the bread, butter and gravy of any good used car business and Tauruses represent a Golden Era vehicle here in Atlanta.
What also helps is that Atlanta is a Taurus happy town. Since it, along with the Mercury Sable, were made south of Atlanta for well over 20 years.
Before the Tauruses became a staple at my dealership, I focused on selling Volvos and Subarus for cash money. In our business we called them the ‘wanna-be’ cars, along with Saabs, because those who bought these brands usually preferred to have Lexuses, Benzes, and Beemers. They just couldn’t afford the price premiums that came with buying those later vehicles. So the less loved brands here in the South ruled the economics of that time. At least until late 2008.
Once the sub-prime mortgage crisis hit, I had to change my entire selling methodology and become the bank of Steve. Within a year, I would reduce my Volvo purchases by half. My Subaru purchases declined by about 80% (dealers from North Carolina began buying them up) and the Taurus quickly became my most popular vehicle.
For the last five years these Tauruses have receive $700 down stickers at my lot. After a quick sale and two years on the road, my customer would get a clear title, and I would get the profits needed to keep buying more of them.
Not every Taurus I bought would turn out to be worth retailing in the end. But with the financial risk of losing a few hundred dollars, versus making a few thousand, it didn’t take long to become a dedicated buyer of all things Ford and aquatic. I even learned a few things about the Duratec and SHO engines along the way… none of which were good.
Interesting. I’ve noticed that the buy-here-pay-here lots here in Indianapolis migrated to Tauruses as well over the past 5-7 years or so. It’s to the point when I see one of these on the road I assume it’s a subprime driver.
Taurii? are popular to work on as they age with independent garages because their replacement parts are cheap an plentiful. Jobs go quick, and tickets became mostly labor. Even if we have major engine issues, we can buy Vulcan (Vin U) motors for $400-500 in the spot market with a 6-12 month warranty install it and be out the door for less than a grand for the customer. You just can’t beat that.
So while everyone likes their favorite vehicles (including me) that can sometimes be obscure and or quite fussy to own, on the repair side of the business, simplicity = $$. So when a guy walks in and puts $700 down on a car and $60 a week after that you know he isn’t going to be able to put out for major (quality) repairs on an expensive European make. We have actually repaired cars where the original seller refinanced the repairs into the original note just to keep the process going.
I do that quite a bit. So long as the employment situation doesn’t change, putting the repair at the end of the loan at no interest keeps a lot of customers from going underwater over the course of two years.
A dependable inexpensive automobile is a blessing to millions.
Sounds like a fortune cookie.
…and quite possibly the shortest VanillaDude comment ever. 🙂
LOL!
You are back too!!!! You’re missing your avatar.
“I will build a car for the great multitude….. it will be so low in price that no man making a good salary will be unable to own one — and enjoy with his family the blessing of hours of pleasure in God’s great open spaces.”
Henry Ford 1922.
Almost a century later Ford is still sitting in the sweet spot of value in the middle of the market.
When all you need is something to get you from point A to point B, those Tauruses started to make sense. If you can get something that’ll get you places for less over something that might drive better or looks cooler or whatever, why not? I think the only fly in the ointment here is the AX4N tranny, unless they’ve finally become dependable in its later years.
Yes and no, but one thing you have to consider, and I stress that in my comment above, is cost and ease of service. You can buy a car that does well in initial reliability but it something of a nightmare to physically service and maybe quite expensive to do so. That changes the equation considerably when you get to the second and third + owners… My 93 Century is an example of this, it is 20 years old has nearly 300K on it and while I baby it driving and maintain it like Swiss watch, inevitably it will need attention (although surprisingly has needed little). But parts grow on trees and I can service it blind with one hand tied behind my back so unless a nuclear bomb goes off, it will still come out cheaper in the end (for me) to keep it going.
So when you are in the $2-5K range of a car, especially one that has to be financed like we are talking about, that becomes a key concern. Sometimes we are harsh with our regular customers on maintenance and driving habits. Technically I would love to have a car in the shop 24-7 making me money, but in reality that is not the best way. Steady business is better than front-loaded business and happy cars = happy drivers.
Steve, you mentioned Subarus as having been the bread and butter of your business at one point.
We’ve dabbled in them a bit. How do you address the very common and expensive head gasket leaks? The lower the price of the car, the more profuse the leak…just looking for a Pro Tip.
I bought a lot of 95 and up Outback models back in the day. A few late 90’s… right up to around 02′ and 03′ models as well. I would never touch one unless it was dealer maintained and I inspected the hell out of them.
I tended to get ones that simply didn’t have the head gasket issues. A few were listed as ‘engine needs service’ were perfectly fine. But these days I simply don’t finance any more Subarus.
I find the knock sensors and endless oil leaks to be bigger issues than the head gaskets.
Do you have an onsite repairman or do you farm it out? The trend around here (Charlotte, NC) has been to farm it out since everyone is looking for ways to increase business and a good relationship with an independent mechanic can be better than going through a string of half-ass shade trees.
We have relationships with several small lots who don’t want the hassle to manage repairs and we like servicing cars but don’t want the hassle of chasing down people that are flaky on their notes.
Farm out. I learned my lessons on that long ago.
From what I read on the Interwebz, the original gaskets on the 2.5 (even the later ones) weren’t up to the task, but when Subaru did warranty gasket replacement, they simply took a plastic bristle “whiz wheel” to the heads before installing improved gaskets.
My 03 Legacy had the gaskets done under warranty at about 30k miles, and they lasted until about 160k, when oil started leaking out of them…when the car started leaving puddles withing 10 minutes and I had to add a quart every 100 miles, I did the gaskets again and took the heads to a machine shop and had them checked and decked flat. I also used a multilayer steel gasket (MLS), opionions vary on what the best one is. I have about 10k on the repair, oil consumption is down to the quart every 1,000 or so — but I tow with it and run it wide open in hilly terrain a lot.
Now here is an article that I can get behind! Yes, these cars didn’t set the world on fire, but their design still looks good years later and they are indeed cheap, reliable transportation. My dad’s 2006 Taurus (which I did a CC on) feels just as good at 170,000 as the day we bought it.
Steve, I’m curious to know what you learned about the Duratec and SHO motors, as I thought the former were almost comparable to the Vulcan in terms of durability.
Duratecs become increasingly complex as they age. The Check Engine lights on them are serious headaches at times.
The SHO requires a unique engine fix and careful watch of the transmission as well. I am currently financing one. Ford simply didn’t spec out the powertrain to be as durable as the other two choices and the lack of cheap parts along with limited real world value compared to the conventional models make the SHO not worth the trouble.
Yup. Gotta weld something to the cams in the v8 of the SHO, correct?
When Chevy redid the Impala in the Honda Accord’s image back in 2006, that redesign reminded me an awful lot of how Ford salvaged the previous generation Taurus with this restyle in 2000. In both cases, the manufacturers decided that simple, if boring, sheetmetal was preferable to overwrought fishhead shapes (1996-1999 Taurus) and John Cafaro on crystal meth (2000-2005 Impala.)
Even today, both cars look reasonably contemporary – something that cannot be said for their previous iterations – and they’re also fairly reliable for Detroit metal with the right powertrains.
You know, you hit that nail on the head with the 2000-2005 Impalas.
I owned an ’04 for over 8 years, and it took me FIVE YEARS to get used to the quirky design. They look best in monochrome white everything. My Impala was a great car and still is every time I see it at work when a co-worker drives it!
As soon as the 2006 models came out, I wanted one very badly, as it was a very clean design. I am finally the very proud owner of a 2012 LTZ.
The last-gen mid-size Taurus wasn’t a bad ride at all. We had one several times as rentals, once in NoCal. Funny thing was, at a scenic area along 17-mile-drive, our car was identical to another one, and when we got back to our car, the people who had the Taurus parked right behind us were sitting in OUR rental, wondering why the key wouldn’t turn! We all got a belly-laugh out of that one!
Yes, often boring and run-of-the-mill can be beautiful…
I liked what Cafaro did with the fourth-gen Camaro and (especially) the C5, but he seemed to lose his gourd with the 2000 Impala. Way too many cutlines and bulges, never mind the completely incongruous tail lights. The 2006 was a significant improvement, though I can remember the design getting slammed in the press for being too derivative. It really does look like a 2006 Accord from some angles.
I doubt I’ll ever personally own another GM product, but I grudgingly admit they have some fine products today. If I ever pry my Dad away from his love for Chrysler minivans, a used 2012 Impala coming off light fleet duty would be my first, last and only choice for him.
I imagine that the 2000 Impala we got and what was designed originally were 2 different things, it probably was a good looking car in the design concept that lost a lot when the bean counters started the “production feasability” part of the program.
A similar thing happened to us on Hawaii…picked up the rental Sebring, stopped at the first fast-food place we came to in Kona, and parked next to the identical car with the next plate number after ours.
Steve, I’m curious what you think would be the Taurus’s equivalent today… what will you (or someone like you) be financing in 2020, if you want to keep your customers on the road and paying their notes?
Ten years from now I seriously doubt that this business will exist.
Bad decisions, worse credit and the need for cheap transportation will exist as long as a free America does (so, you may be right, Steven…)
Still, I’d guess… 4-cylinder 2006-2012 Fusion?
Not enough of the 4-cyl units on the road. Taurus was a huge seller, so even with attrition there’s still many to choose from.
Good point, though towards the later years (2010-2012) it seemed all the dealers around here had in stock were the 2.5L Fusions, even on top-line SELs.
I’d guess the Impala – generic, reliable, dirt-common former rental fodder, cheap enough to buy, run and fix, without the perceived value of a Japanese nameplate.
Dito Buick Lucerne or LaCrosse. Maybe if I someday end up with my mother’s 06 Lacrosse (that just hit 20K miles) it can be my grubstake into a BHPH second career. 🙂 After all, life is too short to drive it.
How to interpret that statement? New cars today won’t have enough service life left in them, without the risk or major/expensive repairs, by the time they’re 10 years old?
Yikes! The BHPH business? Or the independent used car business as a whole?
My wife has a 2006 as her driver. It is perfect for her. We got it in 2008 for all of $8500. She loves it and it has gone perhaps 1400 km in the last year.
I cringe every time I have to drive it. It just doesn’t go down the road very well. Recently, I put new tires on it. Driving back from Bellingham, I noted it didn’t track very well. I took it to my trusted shop for an alignment and the told me it wasn’t necessary. “They all do that,” I was told.
Yuck.
She must not ever go anywhere. 1400km/yr is like 900 miles. That’s like around the block once or twice a month.
I drive my TL 9000 km a year. We live in a walking city. We walk to the bank, the market, to go out to eat, our kids’ schools, the library, the swimming pool and the park. My wife is attending college and they have a great deal called the “U-Pass,” which allows her to go anywhere in the Lower Mainland for $30 a month, so she takes the train to school, as the station is 500 metres from our door. When we need t travel, we take the train to the airport, which is 30 min form our door. She uses her pass, I pay $3.50.
I love the freedom of having choices.
Sounds very much like Japan… With proliferation of 15+ y.o cars with barely 40-50kkm on them.
My 2000 TL had 66,000 km on it when I got it in 2010. I paid top dollar for it, but at that mileage, it was worth it. Haven’t spent a nickel on it yet.
Recently, I found a 2002 Infiniti Q-35 with 85k km on it. These were real old school Japanese luxury cars, extremely well built and very reliable. OTR was $7600 taxes in. A nice driving powerful car for like the first year depreciation on an F-150.
Here in the midwest, a lot of older Ford loyalists switched out of Panthers into these around the mid 2000s.
There always seems to be one car that rises to the top in terms of low cost, durability and low repair costs. From the early 80s GM B body, to the 90s GM H body and now these. These cars are now starting to follow my rule – a good used car is one that has either AAA Plus or AARP stickers on the back bumper.
The BHPH experience is going to get a little bumpy in a few years, when the 2004-07 stuff starts getting flushed out of the market and before they can afford the 2011-13 stuff. 2008-10 were horrible sales years and the supply of good used ones is going to really dwindle.
True, I see lots of 70+ y/o people in pristine 00-07 Tauruses, usually white, biege, sky blue, or ‘willow green’. Late 06-07 Taurues got left over Sable alloy rims, one way to tell its vintage.
That “metallic olive drab” color was popular too, my mothers cousin has one….
I drive a 98 S-70 glt . The reason I own a volvo is because I do not want to pay a premium on parts, IMO volvo parts are cheap compared.to their BMW and MB counterparts. I have had my car for four years this month and put well over a 150k km and havent done anything other than oil changes and tires, though It does need its steering rack replaced and a timing belt done on the very near future. This last weekend my family and I left on a race weekend 450 km away. Fifty km into our journey the car started loosing throttle responce and a short while later I had only the very top of the peddle left, I drove it the 70km to my mothers house and parked it and continued on in MOMS civic. While It didnt get me to the race track it did not leave me stranded in the middle of nowhere, also volvo seats are among the best in the bizz. something the 2012 civic showed me very well, even my eleven year old nephew commented on how uncomfortable the rear seat was compared to the volvo.
“2008-10 were horrible sales years and the supply of good used ones is going to really dwindle”
True, there will be shortages of ‘cheap’ used cars by 2018-20. Will be either 300K 2001-07 cars or more costly 11-13’s.
I’d say future good cheap cars will be the pre 2013 Escapes/Fusions, Ford blew out a lot 2010-12’s with rebates before the restyles. So, will be an oversupply of these cars in 5-10 years.
Also, the much maligned 2008-11 Focus is another underated used car. Reliable and cheap to fix. May not have won purists’ hearts, but were good transporation for commuters. OTOH, the 012+ Focuses may get buggy as they age, with all the ‘My Ford Touch’ electronic stuff getting outdated, and the DCT trans wont be cheap to repair in a decade.
+1 on this, particularly as the owner of a blowout special 2012 Escape.
I also recently had a 2010 Focus loaner while that Escape was in having its (6F35 Ford/GM) transmission rebuilt at 18,000 miles. Apart from a too-low seating position and El Cheapo interior materials, it was still a solid and fun little car to toss around; some of the first-gen Focus DNA was still present in the suspension and engine.
Agreed 1000%. That generation of Focus stands to be a real go-to car. We have an ’09 stick right now and it’s a blast to drive, with ridiculously good fuel economy. Wish they made it in a wagon/hatch.
But above all, it’s simple. Way simpler than what replaced it. We may be in the golden age of relatively low maintenance/low tech cars with this generation of 3-7 year old vehicles. I shudder to think of replacing the $3000 touchscreen on a ’13 five years from now.
I’ve got a 2011 Focus SE that I got on a blow out right before the ’12s came out. It’s been reliable and cheap to operate daily driver. Is it the most fun car ever? No but it gets me around fine. It’s simple and does it’s job while getting great mileage (I’m averaging 26+mpg in stop and go Chicago traffic with no highway driving, long trips with speeds at 70mph+ get low to mid 30s in fuel economy). It’s still fun to toss around (not like the older ones but still kinda fun) and the DOHC Duratec (Mazda) 2.0 is spry enough to scoot around in traffic. Being that it’s simple, with a standard 4 speed auto and no Sync or touch screens, I figure it’ll go for a good long time. I’ve had it for 2.5 years and just rolled over 21000 miles. I figure it’s got another 10+ years or more before it’s worn out. I’ll probably get tired of it or need a larger car before the thing dies.
Yep, totally not a fan of touchscreens, power lift gates, or any such optioning on cars that are “normal”. Nightmares waiting to happen once out of warranty.
From flipping used Volvos to leasing Tauruses, fascinating! It’s like the real estate market, where buyers could no longer qualify and droves became renters. Apartment owners have done well. Carmax is like the RE investment funds buying up the better used properties for cash, and driving up prices.
It’s sad how little aesthetics matter when it comes to basic transportation. The 3rd gen Taurus always reminded me of a dolphin, friendly and distinctive. The next face, with those ultra-generic almond headlamps, is just plain awful. What a scourge these were to 90s car design. The peanut lamps were just as bad.
How do you deal with yellowing on the lenses? Just let them go? Polish before showing? Does it even matter?
Great article, thanks Steve!
That’s an excellent analogy. Except the premium late model inventory will usually be held captive within the dealer network of the manufacturer.
I have a detail person take care of yellowing lenses. There are plenty of dirt cheap solutions for them.
The 08-12 Escape is a future ‘4th gen Taurus’. Somenone low on funds, but wants an SUV for ‘style’, a used Escape is best bet in a few years. No My Ford Touch, better mileage than truck SUV’s, and no turbo motor to mess with. With so many coming off lease, after the ‘record sales’ of past few years.
Wouldnt it be whatever is the most common car in the Hertz, Budget, Enterprise, Avis fleet these days? Seems there is more variety from the rentals then in years past? I remember I briefly worked for Budget in the mid 90s and it was Full, Mid, and Econ>
Full-Tauruses, some Camrys
Mid-tempos, contours
Econo-Corrolla, escort
Whatever that is I would assume will continue to be the same pattern going forward? I mean don’t all generic American cars pretty much end up as rental and then the note lots? Not an expert just my .02.
Some rental agencies are tied to certain manufacturers but lately there are less and less rental queen cars. I rent every few months and judging from what I see on the lots the selection is quite varied now. I know for certain that GM has been cutting back on it’s fleet sales to rentals and mixing up the model selection. The Cruze is GM best selling passenger car and it’s not that commonly found on rental lots – at least no where near the extent of it’s sales. I think if you start searching the websites and look at their sample models that will reflect the variedness.
Avis at Albany Airport seems to have every car currently in production. I reserved a Focus, got stuck with a Chrysler 200 and was offered an upgrade to a Toyota Camry that I didn’t want to pay for. The guy in front of my was returning an Impala.
I really wanted the Focus.
I can’t help but wonder how the airbag circuitry will hold up as these cars continue to age and accumulate temperature fluctuations, vibrations, etc.
I’ve noticed some steering wheel airbag covers have lost their elasticity already & become quite stiff…stiff enough to where the horn can no longer be actuated.
I cut apart an inertia switch for kicks a few months ago and saw a capacitor or two in it. Hopefully the epoxy these units are sealed in will prevent capacitors from going bad as they age (not that I know what affect a bad capacitor would have in such an application).
Sometimes I wonder about these things as I occasionally poke around the dash of a persnickety 4th gen Camaro.
Well airbags have been in most cars for 20 years now and I am not seeing anything major. It has been a major source of totaling for marginal cars with light front end damage but other than that no major problems.
Every 10 years or so we worry that the technology will render cars unserviceable after a period of time but it doesn’t seem to materialize. So at this point I am not to worried, necessity is the mother of invention I am sure that the market and crafty mechanics will figure out how to make it work.
I worry about the start/stop switch. That’s got “nightmare fail at a stop light” written all over it.
A couple of years ago we had an 07? Nissan Maxima the first year with the keyless start and it developed a short in the start/stop switch. Since it is supposed to activate when you are in the car with the fob, the switch shorted on sometimes, and there was occasion that if the owner would go near the car it would spontaneously start. It was fun trying to replicate the problem trying to make the car ghost start.
Actually I think there is a mechanism in the circuitry that prevents accidental shutdown if the car is in drive. Unless of course you run out of gas…
That is one reason the keyless start cars are a nightmare and will only get worse going forward. Before a first responder is supposed to start his job of saving the person they are supposed to find all fobs and make sure it is a minimum distance from the car.
Seems like the airbag bits and bobs were designed to be over engineered. My 1990 Volvo 240 DL wagon has a drivers side airbag. The dealer(yes I took it to a Volvo dealer because having a airbag randomly deploy while driving sucks like no other(been there done that) ) looked it over and pronounced everything fine as can be.
So if first gen airbag stuff looks good 23 years later then the modern(aka 2006-2013) airbags should be even better
For what it’s worth, I remember 1990s Volvos having stickers in the driver’s door reminding you to have the airbags inspected every 10 years. I have also heard of 1980s VW and Audi products lighting up the SRS light after 10 years.
Neither of these seem to be needed anymore – the technology has been proven through and through.
Great to see you here Steven! Thanks Paul for giving him a forum to post his stories 🙂
What nobody has mentioned regarding the BHPH business model is the effect that the prime rate, and therefore the interest rate on a $3K Taurus or similar old car, will have on the business.
Prime is close to zero. There is now not much margin for any creditor, regardless of the type of property upon which any loan is made. The supply or type of vehicle may not be the problem. The margin between close to zero and whatever has to work for the BHPH dealer seems to be a likely current issue and one for the very long term – given Fed policy and its clear intent to continue a historically very low interest rate. Doesn’t the market for money matter most to BHPH business?
The market for money doesn’t really have an effect on the BHPH lots, they are carrying the note out of their own pocket and often charging the highest interest rate they legally can. If that isn’t high enough then they “lease” to own.
Note I’m not saying Steve charges the highest interest rate he can in his state, but there are many that do.
First off, welcome Steve. I enjoyed your posts on TTAC especially the one called Saving Bluebird(as I have an old Volvo 240 wagon)
Lots of folks seem to knock the Taurus as a rental car special(auto mags, websites, supposed car buffs etc) but it is a fine car for somebody that wants a reliable daily driver especially the 2000-2007 Taurus(the 2007 Taurus was fleet sales only but are now making their way to regular customers via Carmax and other dealerships). I actually like the 00-07 version over the 96-99 version due to its less oval looks.
My folks have a 2003 Sable and a 2009 Taurus(aka Five Hundred with more fake chrome and wood trim). The 2003 Sable has more then 100,000 miles and it runs very well. In fact over the 10 years of ownership the only issues it had was a bad starter, burned out cluster lights,two batteries and a few pairs of headlights and tail lights. About $600 in parts over the year(I work on all the cars). All in all a good no frills slow(140hp 3.0 Vulcan engine) reliable car. Which gave no trouble
By contrast, my 2001 Accord and 2012 Scion XB (both bought new) have given me nothing but trouble. The accord with transmission issues(like all from 98-02 had) and the XB with small minor issues but I had major issues with the dealership/Toyota corp arrogance on how their product was great and it must be my fault.(yup the fact that the stock untouched radio blows fuses all the time is my fault)
Honda covered the trans repair with no fuss and the car performed well until some drunk jackass hit it in the parking lot and totaled it. I fixed the 2012 Xb’s issues by taking it to Carmax and getting cash and a nice 2010 Ford Ranger regular cab pickup with no frills.
Now as for future Taurus like cars that would be for sale in 2020. Well the 2006 and 2007 Taurus(the last of the 4th Gen) would only be 14 or 13 years old respectively. So it is not a stretch to say those two years could wind up still for sale on a used car lot. The 2006-2012 Malibu and Impala could also be joining it there and so could the Ford Escape or Ford Fusion
You must be lying, everyone knows that all Fords are constant trouble, there is never an issue with Hondas or Toyotas and the dealers always treat their customers like kings and queens. 😉 They would never blame the customer for defects and bad engineering on their respective brands.
riiiiggghhtt….. 🙂
The Honda folks were not that bad and fixed the tranny without any issue.
The Toyota folks were arrogant. I went to several dealers in Maryland and all were exactly the same. That leads me to believe that there is an internal memo from Toyota to treat their customers like crap because that exact same level of douchebaggery could not exist in all the dealerships independently from Toyota USA
Now by contrast I went into a couple of KIA dealerships with friends for work on their cars and those KIA folks bend over backwards to assist. The KIA product is impressive now
I have a 2004 model and it has been trouble free and boring. Welcome here Steve always enjoyed your TTAC columns. This site is a move up in quality for sure.
Glad to see you here on CC, Steve.
It seems like 3/4 of the 1996-2007 Tauri and Sables (sedans only) I see have a bad sag in the rear suspension. Why is this?
If you live in the Rustbelt ’96-’07 TauruSable are known for rear spring breakage.