Re: RIP 96 Town & Country -

This isn't true for elderly commercial planes, take for example the gas-guzzling Boeing 747. Many after their initial 30 year run were sold cheaply to 3rd world airlines.

But the main reason that older plane prices don't decrease is simply market economics and the laws of supply and demand.

With automobiles, they are priced with razor-thin margins and sold on economies of scale. In short, the price REQUIRES that a pretty high volume of the same model car is produced by an automaker - because pricing is heavily dependent on being able to buy large numbers of the same part for little money on a per-unit basis. Thus, the entire auto parts industry is the same way, this is why the subcontractors that make things like alternators, etc. all are going to Mexico, because every last dollar matters.

In fact it is pretty safe to say that there is not a single mechanical item with the complexity of an automobile that is as cheap as an automobile. For example, take a medical MRI machine - it is probably either simpler, or at the most, as complex as an automobile, yet the cost is millions and millions of dollars.

Anyway, because of the economies of scale, all automakers literally have to warp the auto market to consume the volume of cars they need it to consume. Producing a lower volume of cars isn't an option - this is why there is this rediculous artifically created model year baloney. All the model year exists for is to allow a car lot to have virtually identical cars sitting right next to each other on a car lot, and get away with pricing 1 of them double what the other is. For example, go into a Chrysler dealership and look for a 2003 Neon and ask what the price is, then ask what the price of a

What is effectively going on is that in years that the market cannot support the number of cars that the automakers produce, they steal sales from the following year, hoping that in successive years the market demand will get higher than the baseline number of cars they have to produce, and they also cannibalize the pricing on the used car market, by stealing customers that would normally buy used vehicles.

So as a result of all this sales stuffing, the used car market is almost always OVERSUPPLIED with used cars. Occassionally there are model shortages, but overall, there's too many of them. So, used buyers can afford to become either very picky, or very cutthroat on pricing, and the majority are cutthroat. As a result of this, used cars that aren't up to par get shuttled off to wrecking yards very rapidly, and the depreciation is ferocious on the ones that are left.

BY CONTRAST, airplane manufacturers only build the exact number of airplanes that the market will accept in any given year - this is why you have to order planes in advance. As a result, used airplanes that are for sale have virtually the same effect on the pricing of a plane that new, competitive airplanes have.

If you examine auto markets that operated like plane markets do today you will find the same pricing. For example, when people in the USSR and East Germany were not allowed to buy any car other than the commie-manufactured ones (like the Trabant) and the state-run automakers were so inefficient they couldn't keep up with demand, used pricing was pretty close to new pricing. And to argue that the manufacturing quality of the Trabant was desirable is a joke.

Ted