It may be that buying a new car is an unnecessary expense, at least when it comes to consumer electronics. Best Buy Co. Inc. (NYSE: BBY) claims it can “tech up any car to feel like new.” The transformation comes with a high price tag.
To make the car feel like new, Best Buy offers “professional car electronics installation”:
We’ll take care of your installation, even if you bought your products somewhere else. Our Autotechs are Mobile Electronics Certified Professionals, plus you’ll get a lifetime workmanship guarantee.
After that, a very long list of options. In car entertainment, it includes amplifiers, speakers and satellite radio. It’s not cheap. A speaker can cost $100, a touch screen TV at $600, a tire pressure sensor at $180, and a Rand McNally tablet for $400. (Installation is $49.)
Is it worth the cost? Maybe. A seven-year-old car may not have had most of these items available. (Seven years is the average period Americans own a car bought new.) Not only were the cars not available with current generations of many of these consumer electronics devices, but dealers have little or no capacity to install them.
Many cars bought new lose well over 60% of their value in seven years. A $30,000 car becomes a $12,000 car over that period. For $2,000 or $3,000, that car will be like new, at least in terms of consumer electronics.
Replace the tires, much of the engine and the drive train, and for $15,000 it seems pretty new. Why spend $30,000 for a brand new one (many of the Best Buy products and installations would add thousands if the dealer did them). Many actuaries would argue it’s a good deal.