Omaha daily bee., 1910-04-17
INVESTING IN A MOTOR CAR
First Fix the Price Limit, Then EXer-
else Judgment.
SOME FIGURES ON CAR VALUES
Factors 20 he Considered in BuyinE
New Or Secondhand Machines
val OF the Factory
Name.

Naturally. the first question In consid-
crIng the purchase OF a car is the amount
TO be paid for L. Doubtless nine out OF
every ten intending buyers settle hat first.
In other words. there is usually a certain
sum available that cannot be exceeded.
The problem il then. Of course, how to
become the possessor Of the greatest posi-
BILE value for the limit thus
with so many good cars now on the mar
ket. this should not be a difficult matter
TO decide, IL IL merely a question OF eNer-
cising the same amount OF discretion and
judgment that would be applied to the pur-
chase OF any other commodity involving an
equivalent sum. But buying q motor car
Is not quite like buying anything else.
Next 10 the amount to be invested Is the
question OF whether to buy a hight priced
machine mat has seen service. or q new
car, the list price OF which comes within
tho purchasers means. This is probably
the commonest OF all questions concerning
the requirement OF a first car, and there
are doubtless few connected with the in
dustry in any capacity that have not been
approached az one time or another for an
answer to II. Three or four years ago. an
affirmative response would usually have
been forthcoming in regard to the second
. nhnN CAT me UuNRuk u any phe hlahoA ~
that time was a comparatively small frac-
ton Of what many companies now build
annually. a gerat deal OF expensive hand
work was considered necessary and there
were numerous economies OF manufacture
thai were not possible with a limited prod
uct. Moreover, the original price OF a
machine includes the agents commission.
a matter Of 10 to ~ per cent, and a SELL
ing cost to cover advertising and other ex-
penses Of a like nature that represents as
much more.
How Values shrink.
II Is only reasonable TO assume that the
depreciation Of so per cent, or close to It,
that the car suffers after a year Of service,
is really not much more than a wiping out
OF these two items which actually add
nothing to the value OF the machine. When
bicycles were selling at 800, II was COM
monty reputed that their factory cost rep
resented about 30 per cent, or a little less,
OF this figure. Three years ago, the writer
was informed upon excellent authority that
It cost St,1O in round numbers to turn out
a $3.50 car complete from the factory.
Taking this list price as a basis, II will be
apparent that the agents commission at
once took off $500. Confidence in the future
OF the motor car was not 30 firmly estab-
lished then as now, and advertising and
other lncldentals OF selling doubtless cut
off at least 500 more. leaving a matter Of
1880 for the northumberland 10 and
90 per cent gross profit, but then the turn
over was comparatively small and the over
head expense correspondingly greater. Had
It not been for the liberal margin, many
makers would not have survived the period
of experimentation.
or course, none Of these factors Of ex-
perse enters into the cost Of a hand
car. Where a car is sold by its original
purchaser, selling expense is not a very
important factor. This is also the case
where It is disposed of by the manufac
turer's branch house or agency, for. to q
certain extent, the sale of a used car Il
regarded as a means OF subsequently sell.
ing a new machine to the same buyer. Tht
majority OF good makers will handle onl,
used cars Of their own manufacture, anC
such machines are usually sold on honor.
they Will seldom be found otherwise thar
as represented. To do this with a view e
making and keeping customers naturally
permits Of but a small margin of profit
as compared with a new car. 1t will seen
from this that where a used car can b,
acquired al a price that may be supposed
TO approximately fairly its future servlc,
value, It can hardly prove otherwise thar
a good investment. A conservative esti
mate would place the average life OF a vel
built machine . at five years; good care
would naturally double this; but it is safe
TO say that a car bought in good condition
at the end OF one or two years driving
should be good for at least three years
more.
Expert Examination.
But there is an element in the purchase
OF a used machine that seldom, II ever, re.