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February 15, 2005

Et tu, Suze? (Part 2)

Remember those "Lock 'n' Roll" advertisements Suze Orman was doing for GM back in November of 2004? I do, because I never figured I'd see Suze stand in front of a camera and urge consumers to buy new vehicles. That, however is exactly what she did. Readers will recall that I even wrote an article about this sordid state of financial-guru affairs.

As I was doing some research for that article, it became evident that pinning Suze down on her recommendations regarding buying new or used vehicles wasn't going to be easy. There just wasn't much discussion of it in any of her books — at least, not in those which I have in my possession.

Now, though, I've come across something pretty concrete.

Suze has a one-hour, call-in talk show which airs Saturday nights on CNBC. I don't always remember that it's on, nor do I always have the opportunity to watch it even when I do remember it.

Three weeks ago, for whatever reason, I ended up taping the show. And wouldn't you just know it? Halfway through the episode, a female caller took center stage, asking Suze for advice. Here is the transcript of that little exchange:

CALLER:   When it's time to buy our next car, are we better off buying used, or buying new?

SUZE ORMAN:   You're better off buying a "new" car for you, but a "new" car that happens to be used. The day that you drive a brand new car off the lot — do you know — well, let's try it this way — how much do you think that car depreciates in value the second you drive it off the lot?

CALLER:   Uhh . . . is it twenty percent?

SUZE ORMAN:   Twenty percent. Sometimes thirty percent. Why in the world do you want to buy something that as soon as you take it home with you is worth thirty percent less than five minutes before that? You don't. So you're far better off taking advantage of cars that other people have purchased that they couldn't afford — they got to take the depreciation for you — and then you buy them when they are used but still relatively new. That's how you go about buying a "new" car.

That, in its entirety, was Suze's response to the caller. Obviously, she didn't spend a lot of time on the topic. But her thoughts on "used versus new" seem pretty clear . . . at least on this Saturday night. But I guess those thoughts can change, right?

Especially when you're tapped to star in commercials for big car companies.

Michael | February 15, 2005

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