Is Now the Time to Buy?

Factors to Consider

While corona and its variants no longer dominate news cycles, we do have residual elements to contend with such as the proposed G20 covid vaccine passport. This no doubt will prolong the pressure on our economy, unfortunately, this is not an isolated concern. There is another approaching impact that has the potential to disrupt our fragile economic outlook even more.

Carbon Scoring

It’s no secret the automobile market has been crippled by governments around the globe overreacting and mandating corona shutdowns, along with the deliberate Chinese strategy to make many microchips unavailable. Now as if that were not enough, we have a sleeper challenge “carbon scoring”.

Early this year my wife was browsing the aisles of Super-Pharm.  Picking up a box of throat lozenges she looked at the back to review the ingredients and noticed a carbon score on the box.  She put it down to look at a competitor’s packaging and no carbon rating was found on it.  This alarmed her since we had just been discussing the new MasterCard program being launched in cooperation with the UN called “Doconomy” here are 3 links the first from the

World Economic Forum  https://www.weforum.org/agenda/2019/05/this-credit-card-has-a-carbon-emission-spending-limit/

The second from Mastercard https://www.mastercard.com/news/press/2021/april/mastercard-unveils-new-carbon-calculator-tool/

The third from PCAF (Partnership for Carbon Accounting Financials) https://carbonaccountingfinancials.com/financial-institutions-taking-action

As we’ve witnessed before what starts out as an “educational” and “volunteer” program has the propensity to grow beyond the information stage into something more controlling.

                                                           Should You Buy a Car Now?

While it is accurate to say there are carbon emissions in the creation of a can of Pringles or a throat lozenge, these spent carbon emission levels pale in comparison to the creation of an automobile and more importantly the operation of that automobile over its lifetime.

It takes very little imagination or foresight to understand where this is all going. Cars that are being bought and sold today, even hybrids, run the very real risk of being worth a lot less or difficult to sell in the not-too-distant future.

The national vehicle turnover rate in Israel is 36 to 42 months.  The car you buy today if you track with the national average will be ready to sell in the year 2026 or 2027. What impact on the future value, and or ease of vehicle sales, may we face at that time given the eagerness of national and international entities to regulate the carbon output?  What will be your complications at that time given the enthusiasm of individuals today to prefer electric cars (EV), and government-sponsored promotion of EVs? Only time will tell, one thing is absolute: our 2019 type economy will not return.

The good news

The good news is a lease protects you from all these concerns.  You get to use the car of your choice now, for a lower monthly cost than buying and financing, and yet all the responsibilities, future compliance issues, and trends affecting car ownership fall squarely on the car owner, the lease company.