Car Economics

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Last year, when I was living in Connecticut, I drove a 2007 Honda Fit. It was a great car—fun to drive, good milage, and tons of space inside. Last month, I sold it to Carmax, who offered me substantially more than the local dealership. The car is now listed on their website. I’m not sure what, exactly, their net margin is—it looks like they spent some time fixing the few dings on the body—but that’s not really the point; the point is that they’re selling my car for significantly more than I paid for it when it was new.

Indeed, it’s more expensive than the new 2009 model at the same trim level, and the 2009 is a completely redesigned vehicle. They can get away with this pricing because, however, right now the Fit is such an insanely popular car that dealers are marking it up left, right and center—that is, of course, when they actually have the vehicle on the lot…

I’ll miss that car, but, to be honest, it just doesn’t make economic sense to own a car in Manhattan.

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