Why Buy New?

[BGD]

crinklystarfish - 2007-10-30 3:36 PM

Bruce

Only true if you accept the premise that this nebulous and arbitrary notion of utility is a priori. And I don’t, and it isn’t.

Economic theory is a restrictive way through which to view the world. 

Therefore, the cost is, in reality, just one more factor to weigh in the ‘Is it right for you’ question.

Crinkly - Now I'm intrigued!You reject the notion of utility as the universal economic measure which drives consumption; but what other measure(s) could one use for your relative valuations of all the consumer choices facing you, if not their "utility" value to you (the amount of pleasure one would derive from obtaining/owning/using each available good or service)?Cheers,Bruce.

[BGD]

LordThornber - 2007-10-30 3:37 PM

 

BGD

 

But personally I cannot see how anyone would get ten times more (note, 10 times, not twice, or 3 times etc) more pleasure from paying 40,000 or more pounds for a brand new equivalent...............indeed I would get less,

 

 

BGD, let me show you our example of "ten times more pleasure" Many moons ago we paid 2K for a 2nd hand VW Westfalia, purely to see if it was for us as they say. Well it wasn't for us (the van, not the motorhoming), because we wanted (and could afford), the "ten times more" factor. Better lighting, bathroom, etc, etc, etc. Yes easily ten times more was achieved by spending 20K on a new Swift. I don't think for a second I've blown your argument into the water but I wanted, and hope I have, redressed the balance a little.

 

Martyn

 

 

Hya Martyn -

 

I fully accept your point that van two gave (is giving) you substantially more "utility" than van one.....no argument there at all.

 

What I still don't accept is your premise that the increase in your utility derived from the purchase of van two for ten times more money was a factor of TEN.

 

I would submit that you are much happier with van two.........perhaps even twice as happy, (ie a 100% improvement in your derived utility) but in all honesty I wouldn't accept that your utility has increased by 1000% -

 

Now if on reflection you accept that your pleasure derived from van two is anything less in reality than a 1000% increase over your ownership of van one, my point remains valid: there is a diminishing marginal rate of return on buying an any more expensive MH than the minimum that you need to in order to own a basic functioning vehicle.

 

Oh, this is good stuff!!!

 

Cheers,

 

Bruce.

 

 

[crinklystarfish]

Bruce, 

My objection stems from the implicit assertions that utility is a fixed and measurable entity, and that it is directly proportional to cost. It isn’t, and it isn’t. 

The problem economic theory has in my non-economist view is people.  

Is it not the case that some derive greater pleasure from a lack of material possessions? 

In that one short truth your whole argument fails. 

Don’t look at the world through a letterbox, open the door. You clearly have the capacity, and the world is much better with a greater panorama. 

Capitalist commodity production and consumption pretty much rule the world I grant you. It’s a long leap from there to defining human behaviour though.

[KD]

BGD You belong on question time your argument is absolute mumble jumble. Money dont buy happiness but it sure helps.

[bigal55]

CONGRATULATIONS BRUCE 26 posts and nobody has called you a *&%$£" also you have got people philosophising surely a ist. is anything really worth the money, i bet there are some self build people who would say you paid too much, i certainly cannot justify, on economic grounds the big white thing outside my house, we tend buy things on emotional as well as financial grounds, hence my wife needing another pair of shoes, ooh and i need a handbag to match.the strange thing is i would never spend the same money on a car, i drive a toyota camry 8yrs old all the toys leather, climate, etc £2000 3yrs ago at auction, i,ve done 25000 miles, most of it tugging, france, spain,anddorra,etc and nothing other than service items have had to be replaced, it is immeasurably more comfortable to drive than the brand new m/home but i,m still happy i bought the m/home, theres nowt as queer as folk

[Guest Tracker]

Then there is the added bonus for some of us that for every pound spent on a motorhome or car or anything else extravagent, that means 40p that grasping Gordon will not get his sticky little paws on?

 

And that is satisfying!

[Jackal]

BGD,

 

Surely the value is immaterial, it is the utility/experiences that you obtain from it that matters. if you can experience all that you want to in a £4,000 rather than a £40,000 van, then that's the way to go.

 

However, by definition the new should last longer therefore it should give more enjoyment.

 

Speaking personally, my own enjoyment would seriously be undermined by the worry that an old thing could, dare I say it, mysteriously break down at some inopportune moment, like crossing the Millau bridge whilst suffering from vertigo.

 

Of course, I recognise that new doesn't assure you that it won't break down but surely the probability is loaded in its favour.

 

The other thing, is that perennial problem of the MOT test. Just the thought of some mechanic rubbing his hands together whilst becoming 'creative' with my pride and joy sends shivers down my spine. New gives me 3 years grace to this dreaded experience and I attach a large premium to not having to worry or get my hands dirty.

 

A motorhome is different to a car, IMHO. A motorhome is a holiday. It provides memories and experiences and the more of them you get the less you worry about values.

 

A car is just a means of getting from A-B. There is quite literally less riding on it, IMHO.

[Guest Tracker]

Value is purely subjective.

 

One man's value is another man's folly?

 

As long as we all get what we want within our perceived budget is all that really matters.

[BGD]

Tracker - 2007-10-30 8:49 PM

 

Value is purely subjective.

 

One man's value is another man's folly?

 

As long as we all get what we want within our perceived budget is all that really matters.

 

 

 

Nope.

 

Sorry Tracker.

 

Not good enough for the Bruce school of bulls**t.....

 

Value is of course subjective. I don't think any of the posts in this thread have suggested otherwise.

But RELATIVE value CAN be compared by that same subjective individual, at any point in time.

 

And...nope: "so long as we get what we want within our perceived budget is all that really matters" ain't accurate enough for this here pedant.

I will now demonstrate: you have ten pounds and you want a packet of (superbly yummy) Walkers Cheese and Onion crisps.

Shop 1 offers you a packet for 30 pence. Shop 2 offers them for sale at 9 pounds per packet.

Both offers are within your budget.

Acceptance of either offer will deliver what you want, within your budget.

But no rational person would (ceteris parabus) do anything other than buy the (superbly yummy) Walkers Cheese and Onion crisps other than from the shop selling them at 30 pence.

Ergo - it is not just whether it fits within your perceived budget that matters when deciding between competing offers for the same or (perceived as) similar products or services......

 

 

 

(By the way, have I mentioned how much I like Walkers Cheese and Onion crisps................?)

 

Cheers,

 

Bruce.

 

 

 

 

 

 

 

[LordThornber]

Well Bruce, I wrote a rather lenghty reply and for some reason it's b****y disappeared. Never mind, to be brief my response in terms of your "1000%" comments is this, Andrea's and my own pleasure at our now 3rd van, which is better than the 2nd which was better than the 1st, (are you keeping up?), is this...

 

Priceless

 

Martyn

[Dave Newell]

But Bruce your argument doesn't compare like with like. Of course you would not pay £9 for the bag of crisps you could buy elsewhere for 30p but then they are both the same and not been opened. Let's say you go out for a meal to a nice restaurant. You pick your meal from the menu at £10 and the waiter says " a customer has just left who had the same meal but he didn't finish all of it, you can have the rest for £5" would you do that to save £5? No of course you wouldn't. And that is why some people prefer to buy new motorhomes, because they can and they don't want a half eaten bag of crisps :-D

 

Besides which if we all bought only second (or third, fourth or even fifteenth) hand 'vans the motorhome industry would collapse and there would soon be no pre loved vans available.

 

D.

[crinklystarfish]

Come on Bruce, answer the posts that debilitate your theory; not just the half-cocked posts that you can answer.

Some out here in reader land might be begining to suspect that after a bit of a flurry and some latin, there really is no substance to the power of econimic models to explain all the nuances of human behaviour.

Try other explanatory frameworks. Social 'sciences' offer a start, but for real explanatory power, well... you'll know it when you find it.

[Guest Tracker]

If you find yourself lost in the desert having recently just won the lottery jackpot and you like Walkers cheese and onion crisps and if you came across a stall selling them miles from anywhere at nine pounds a packet you might buy some.

 

Good value under the cuicumstances maybe?

 

Most people, even with a huge budget would shop around at least locally for the best deal on any major purchase, so I am afraid Brucie baby I consider that your cheese and onion theory is not one of your better attempts!

[BGD]

Tracker - 2007-10-31 10:51 AM

 

If you find yourself lost in the desert having recently just won the lottery jackpot and you like Walkers cheese and onion crisps and if you came across a stall selling them miles from anywhere at nine pounds a packet you might buy some.

 

Good value under the cuicumstances maybe?

 

Most people, even with a huge budget would shop around at least locally for the best deal on any major purchase, so I am afraid Brucie baby I consider that your cheese and onion theory is not one of your better attempts!

 

 

Hi Tracker - But with respect, your post actually endorses EXACTLY my point!!

As I said earlier: different individuals relative valuations of the uitility that they would derive from the same good/service vary.......and then I also said that this does not preclude an individual from making his/her own relative utility comparisons at any point in time, between a range of similar goods available to him/her at that point.

 

:-D

[Guest Tracker]

OK then Bruce please clarify exactly and with exemplary pedantry what your point about crisps was please?

[BGD]

Dave Newell - 2007-10-31 9:26 AM

 

But Bruce your argument doesn't compare like with like. Of course you would not pay £9 for the bag of crisps you could buy elsewhere for 30p but then they are both the same and not been opened. Let's say you go out for a meal to a nice restaurant. You pick your meal from the menu at £10 and the waiter says " a customer has just left who had the same meal but he didn't finish all of it, you can have the rest for £5" would you do that to save £5? No of course you wouldn't. And that is why some people prefer to buy new motorhomes, because they can and they don't want a half eaten bag of crisps :-D

 

Besides which if we all bought only second (or third, fourth or even fifteenth) hand 'vans the motorhome industry would collapse and there would soon be no pre loved vans available.

 

D.

 

Ok Dave - I'll respond to your two points:

 

1. The meal scenario.

In my present situation, if I had £10 or more of diposable income, I personally would not eat the part-finished meal if the price demanded was £5 compared to the full meal at £10.

However, as I sought to point out earlier in this thread, everyone has differing relative valuations of the utility derived from spending their money in one way compared to other ways at a particular point in time.

 

So let's change the circumstances of the person faced with the choice:

Now we watch a homeless man shuffle past the same restaurant.

He does have ten pound in his pocket and so could equally afford the £10 meal.

And yet he has to pay £2 per night to sleep in the hostal down the road - and they do not provide food.

He's very hungry, and there are no other restuarants open wthin easy walking distance.

Now I suggest that the utility that he waould receive from spending £5 on the half-finished meal would be substantially greater that that which I would derive.

And thus faced with the same choice, he would quite possibly pay the £5 because of the opportunity cost he would incurr if he'd spent the whole £10 on the full meal (even though it might itself have given him yet more utility) would be foregoing a dry warm bed for the night afterwards.

 

2.The fact that the new MH industry would collapse if EVERYBODY only bought second hand is nothing to do with what drives customer choice. Because that would be the RESULT of all the consumers making thier individual choices, not a CAUSE of their choices.

That's a macro-economic result of the micro-economic choised of individual customers.

 

I simply do not believe for one moment that you are seriously trying to suggest that people who choose to buy brand new MH's are doing so for philanthropic reasons, in order to keep the dealer/manufacturer in business.

That argument simply doesn't wash - people buy because of reasons that they perceive benefit them, not in order to profit the manufacturer.

The manufacturere/dealer DOES indeed profit from that purchase decision, but they do so as a by-product of the customer deciding that he would like to buy that van becuase of the particular range of features/price/etc etc that the customer wants.

 

 

Cheers,

 

Bruce.

 

 

[Guest Tracker]

BGD - 2007-10-31 2:34 PM

 

2.The fact that the new MH industry would collapse if EVERYBODY only bought second hand is nothing to do with what drives customer choice. Because that would be the RESULT of all the consumers making thier individual choices, not a CAUSE of their choices.

That's a macro-economic result of the micro-economic choised of individual customers.

 

 

What would very likely happen is that the laws of supply and demand would kick in and prices of used vans would climb as used stock became more scarce.

 

Simultaneously new vans would become cheaper to clear existing stocks until such time that the stock was cleared at which time the surviving makers would start building new vans again but in smaller numbers and over time the entire market would gradually return to roughly where it is now.

 

It's all really very simple and does not need fancy names and terminology but I still do not follow what your original point was Bruce?

[BGD]

Tracker - 2007-10-31 2:48 PM

 

BGD - 2007-10-31 2:34 PM

 

2.The fact that the new MH industry would collapse if EVERYBODY only bought second hand is nothing to do with what drives customer choice. Because that would be the RESULT of all the consumers making thier individual choices, not a CAUSE of their choices.

That's a macro-economic result of the micro-economic choised of individual customers.

 

 

What would very likely happen is that the laws of supply and demand would kick in and prices of used vans would climb as used stock became more scarce.

 

Simultaneously new vans would become cheaper to clear existing stocks until such time that the stock was cleared at which time the surviving makers would start building new vans again but in smaller numbers and over time the entire market would gradually return to roughly where it is now.

 

It's all really very simple and does not need fancy names and terminology but I still do not follow what your original point was Bruce?

 

 

Hi Rich -

 

Of course that is what happens to the MH industry as a whole - the laws of supply and demand act to adjust the relative prices of new versus used and to re-balance the market over time.

 

 

But with respect, that's not the thrust of the discussion here.

 

 

 

In this thread I am seeking to debate what it it that drives INDIVIDUALS to buy brand new, and my contention remains that the amount of EXTRA individual utility that they derive from doing so is not sufficient (on, as the Americans like to say, a "bangs per buck" basis) to justify the extra bucks spent, because of the concept of diminishing marginal rate of return.

 

 

Individuals simply DON'T make their individual purchase decisons based upon the tiny effect that their one individual purchase choice will have upon the industry as a whole. They just don't consider the effect their purchase choice will have on the market as a whole.

I suggest that they choose based upon their own, personal relative valuations at that point in time of a whole range of personal factors/desires.

 

The fact that every time someone buys used, a potential new sale has been lost by a manufacturer just ain't something that the individual buyer even bats an eyelid about at that point in time.

The fact that by buying used, he's in a tiny tiny way contributing to an increase in demand for used MH's and thus, in tiny tiny way acting to increase the future prices of such used vehicles; and also possibly reducing the prices of future new MH's (unless the marketplace demand for new MH's grwos due to additional new purchasers enering the market) is a total irrelevance to his decision. It may or may not be an unexpected consequence, but it's not a factor in his personal purchase choice.

 

Cheers,

 

Bruce.

 

 

 

 

[Guest Tracker]

If you say so Bruce, and forgive me for being a bit of a bumpkin, but I still don't understand specifically what point you are trying to get across so perhaps you could clarify it for me please?

 

If anything all you seem to be doing is reinforcing the theory that it is an individual choice made according to individual budget and all that matters is that the individual gets value for their money?

 

It really is that simple - as I said - one man's folly is another man's delight.

 

Place all the man made hypothetical complications aside and I really can't see that the reality is ever going to be any different?

[BGD]

Eddie - my point was the point made in my OP, to explore the rationale for buying brand new rather than used.

 

All subsequent posts by me later in the thread have been to further explain and expand upon the issues and questions raised in my original OP.

 

The discussion seems to have become somewhat circular in the last few posts, so the thread has probably run its natural course now.

 

Cheers,

 

Bruce. :-D

 

 

 

[davenewellhome]

But Bruce, the rationale for buying new is clear and easy. People buy new because they want to and can. It really is that simple.

 

D.

[bigal55]

Tracker - 2007-10-31 5:16 PM

 

If you say so Bruce, and forgive me for being a bit of a bumpkin, but I still don't understand specifically what point you are trying to get across so perhaps you could clarify it for me please?

 

If anything all you seem to be doing is reinforcing the theory that it is an individual choice made according to individual budget and all that matters is that the individual gets value for their money?

 

It really is that simple - as I said - one man's folly is another man's delight.

 

Place all the man made hypothetical complications aside and I really can't see that the reality is ever going to be any different?

exactly, why arn,t the chinese wearing there blue mao suits they did the job perfectly well, reason they now have the choice not to, which is why my wife insisted buying new shoes and outfit for our daughters wedding, i told her your walking boots have years of life left in them , but did she listen.when i was 18 i spent 2wks wages on a leather coat, my dad " more money than sense" he was probably right but i was happy and more important at the time the girls liked it so to me it was value for money

[olley]

How many who buy new do so on impulse? How many times have you heard "we only went to look" I suspect a large proportion do, that's why crap dealers can get away with being crap dealers.

 

The impulse buyer does no research, is just convinced by the salesman that this is what he wants, needs, is entitled to. Logic doesnt enter the equation.

 

Olley

 

 

 

[Rayjsj]

Dave Newell - 2007-10-31 9:26 AM

 

 

 

Besides which if we all bought only second (or third, fourth or even fifteenth) hand 'vans the motorhome industry would collapse and there would soon be no pre loved vans available.

 

D.

 

 

Quite Right Dave ! Go On ! All you who can afford It, Buy a New One. you are doing us all a favour,in the long run. :D

[crinklystarfish]

crinklystarfish - 2007-10-31 9:48 AM

Come on Bruce, answer the posts that debilitate your theory; not just the half-cocked posts that you can answer.

Some out here in reader land might be begining to suspect that after a bit of a flurry and some latin, there really is no substance to the power of economic models to explain all the nuances of human behaviour.

QED.

Some decent efforts at defence though Bruce, even if most of it was just smoke and mirrors.

It made for some decent reading, so ta for an interesting thread.

Steve