Is America's last cheap minivan worth it?
Wed, Dec 16 2015
Back then, middle-class America loved these people-movers and even the well-to-do were glad to load them up with unique luxuries such as power sliding doors, captain's chairs, integrated child seats, and DVD players that entombed cacophonous kids into a temporary silence. Back in the '90s, the minivan market regularly realized well over a million sold units a year. In 2000, minivans finally hit their familial peak of 1.4 million vehicles in a year with the help of two top-20 bestsellers: the Dodge Grand Caravan and Chrysler Town & Country.
Today the minivan just isn't popular. This year it'll likely represent only a half-million in annual sales, with not a single minivan hitting America's top 30 in overall volume. But as I always tell folks, "If you want a deal, you have to hit 'em where they ain't." So you want a cheap and affordable minivan for cash money that isn't a 15-year-old Plymouth in purple? Does it have to be new? Really? Well, if you're married to that type of person, this Grand Caravan with the American Value Package is the cheapest thing going. Deals can also be had on the mini-minivan Mazda5, but since it's been discontinued due to low demand, let's focus on the still-popular Chrysler minivan.
The cost for this 2016 Dodge Grand Caravan according to TrueCar is right around $19,500 depending on where you live in the USA. But let's take a look at the 2015 models instead since they tend to have even stronger discounts during the wintertime thanks to manufacturers and dealers who are busy shoveling out all this older inventory.
If you opt for a 2015 model instead, you're looking at a market price right around $17,800 and luckily these minivans are still sitting in multitude. Wanna click those rebate and incentive buttons? If you currently lease or finance a FIAT or Chrysler product, have AAA coverage, and finance the car with FCA, you can make off like the proverbial bandit for a price of only $15,229 before the dealer inflicts their bogus fee money dance.
That's almost cheap enough to be a loss leader par excellence except for one thing. Chrysler wants you to be a leasing and financing junkie with them as your soul supplier. Don't lease a car with them at the moment? Or anyone else? You're looking at $17,800, which wouldn't be a bad thing if it weren't for one other unpleasant market reality for this minivan.
The used car market is completely overloaded with millions of minivans that range from extremely popular (Honda Odyssey and Toyota Sienna) to ones that are virtually unknown to anyone other than a hardcore automotive historian (Mercury Monterey, Buick Terraza). In the case of the unpopular ones, the Big 3 overproduced these vehicles to a massive scale and then had the bulk of these vehicles sent directly to rental-car fleets. This overproduction over the course of several years in concert with flagging retail demand has severe financial consequences today. It creates a lopsided supply and demand curve that makes a used minivan a far better bang for the used-car buck.
These are the numbers. Let's assume you purchased a 10-year-old Dodge Grand Caravan SE with 100,000 miles for $3,300 which online estimators say is private party value for a mid-level model equipped almost exactly the same as the 2015 Grand Caravan with the American Value Package. You can even opt for the surprisingly useful Stow N' Go seating if you like.
On an apples-to-apples level, you'll likely be paying less than 20 percent of the new-car price for a vehicle that still likely has over half of its useful life ahead. And it gets even better thanks to that money-sucking scourge we know as depreciation. While the newish 2015 Grand Caravan has a depreciation curve that will be marred by the same overproduction issues related to rental demand and fleet customers, the 2005 model has already taken that $15,000 hit.
Depreciation kills the new-car buying equation whenever you're looking at an unpopular market segment. In fact, it's usually the number one long-term cost that nobody likes to admit to in the car business, and for good reason. Even with a generous repair allowance for the 2005 model, the used Grand Caravan will likely cost around a third as much as the new model over the next eight to ten years and 100,000 miles.
So you want a cheap minivan? It's pretty much a used minivan paradise so long as you avoid the stiff Toyota and Honda price premiums. The death of new minivan sales has not only happened due to changing tastes, but also a relentless overproduction of rental car specials and one-generation wonders that should have never seen the light of day. For those reasons, I think older is the way to go with minivans.
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- Image Credit: Fiat Chrysler, Associated Press, Associated Press
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By Steven Lang
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