Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
2013 Ford Focus or Chevy Cruze with 60,000 miles can be bought from Hertz rental for around $10,500 all cash.
2014 Hyundai Elantra brand new with all the loyalty bonus holiday cash extravaganza can be had for around $16,500 all cash, they won't let you have 0% finance at this price and also 2015 is not this price.
Assuming you can buy either one all cash and it's okay financially, which you would do? Conventional says "used is better, let some other sucker waste the depreciation yada yada". I also see new 2014 would depreciate really quick given its already 1 year old.
Insurance is about the same, however you'd be able to drop the comp/colli faster on the used, this is a long term purchase, my current car is 11 years old, so planning on keeping whatever I buy at least 6+ years.
Input welcome
New Hyundai. No question. I don't trust formal rental cars and the new warranty + piece of mind + 60,000 less miles + me making sure the car is maintained correctly from day 1 is worth the extra $6K, IMO.
Why? Most people switch out cars every three to five years, for something new, simply because they want something new, or the lease is up, or whatever. Rarely is a late model used car being sold due to it being a problem. Hell, these days, anything less than 10 years old is generally still in great condition and hasn't had much of a chance to have problems yet, unlike the old days ('50s-70s) when a year old car was out of warranty and often needed major repairs. So the ONLY thing that is wrong with used cars between 5-10 years old is that they often have had the bulk of their depreciation set in.
Yes, you do have to watch out for accident damaged cars or flood cars, but in general, lease returns and late model trade-ins are going to be good cars.
If you buy new, are YOUR cars problems? After all, as soon as you drive off the lot, it's a used car. Maybe you don't maintain your cars so that when you do sell them 5-10 years later they ARE problems. My cars are generally in a least as good shape as when I got them, be that new or used.
I'll also only buy new because I don't trust that other people took care of their car. Also, if it's a ~20K Honda, with the resale value, how much do you actually save? I also like to drive my cars until they break and think I'm better off with a new car, because I can ensure it's maintained correctly.
Since you're planning on keeping the vehicle a longish time then the initial depreciation for a new one becomes a wash. You'll be getting a vehicle with 60K fewer miles (4 years? 5?) on it.
We have always bought new and kept them until they were costing too much to keep going. However, because of wanting to get rid of our 03 Accord V6 before the problems of the auto tranny surfaced, we got a 09 Lexus ES350 with 16.5 K on the odo. from a private owner this past January. It was a garage queen and looks new. It cost about the same as a new Civic. So far, I felt we made the right decision. We don't drive much, about 10 K per year anyway. I am driving my mom's 05 deVille with 52K odo. I will trade it when it starts having problems but so far, so good. I think that when it comes time, I will not automatically shop new, I will look for late model Lexus.
Wow so many different views and opinions, thanks everyone!
Bit more info: I am very partial to a used Elantra, just because I own an 11 year old Elantra which I bought when it was 5 years old. Has 70K then and has 160K now. Darn thing has been a rock, great car- only issues was a wheel cylinder and the radiator cracking.
I'm seeing wow, I can buy a 2013 with 50-60K for only 11,500 and with less driving, in 6 years it'd only have 120-130K. Cars are so much more reliable now that sounds like nothing, hell my current Elantra has 160K.
OTOH, in 6 years a new Elantra would have only 60-70K mileage. Is this worth the extra 5,000 to buy new though?
If you are looking for decent and reliable transportation, consider this model....
Look and source a "brand name" car that is between 4-5 years old...maybe 6....plan to spend 1-2k to FULLY recondition the car as most fluids will probably never have been changed. Try to find one with 50-70K miles.
Premium brands would be Toyota, Honda, Nissan in that order. Once everything is up to snuff, you should drive the car for roughly 4-5 years. The original acquisition for a common sedan (think Camry, Corolla, Accord, Civic, Altima) should be between 7-11K predicated on options...add 1K-2K in full recondition...drive 4-5 years and exit with anywhere from 4-6K depending on condition.
Why?
1) The car still has quite a bit of life left
2) Any major component has probably not failed IF you keep up the maintenance to include timing belts (if any), transmission and coolant flushes, perhaps plugs and wires and 1 batter, brakes, and a set of tires or two....
3) Time value of money. You will have it paid off and will recoup roughly 1/2 of what you have spent INCLUDING maintenance. This of course, is relative to the interior and exterior condition of the car. Keep it cleaned/detailed.
4) All of these brands, whether YOU like them or not, are ALWAYS easy to dispose of! Can't say that with a Mazda, Ford, Chevy, or Chrysler cars. Just can't. Just like a house. You can get into one easy but, how hard will it be to get OUT when it's time?
5) With any luck, your transportation costs will be roughly 1K-1.5K per year excluding insurance and upkeep. Not bad. Insurance will be less. If you live in a relatively safe area, consider liability only along with uninsured motorist. High deductibles (1K on comp). This will keep your total cost of ownership in line. A new car is quite a bit more to insure and you usually dump a healthy downpayment or, take on considerable payments. Assuming you are facing a $400 car payment on a NEW car you will have paid it off in 5 years. Problem is, the depreciation will be 50% or roughly 10K. Not good.
Follow this model on a used one and you might be out half that much. While not a huge homerun, 5-7K is well, 5-7K plus insurance savings ($300 or more per year) which in and of itself will probably offset ALL of your maintenance for the term....remember, even new cars need maintenance....
So, again, IF you are looking for good, decent reliable transportation, it's a good model. The only one better is to buy a very good used car, same brands, that are 10 years old, give or take. Those, you will again cut the losses by 50% more as those cars retail for 4-6K....in fact, the longer you drive those, the better the deal. Any car that is in average shape with a good interior, good automatic, good AC, tires and brakes will ALWAYS sell for 2.5K-4K used.....can't lose. There is simply no risk.
If you need an ego stroke, enjoy the smell of a new one knowing that NO one else has owned it and you don't care that it will smell and act like any other car after a year, get a new one. If you would rather put your money into something else for you and yours, buy a used one BUT, be PATIENT. Scour craigslist, buy from a private owner, do the carfax, really check it out....you might be surprised what yo find there AND the FRONT LINE of used cars at a dealership...yes, a dealership....sometimes if you are patient, you will find a sled there that is still top notch but, not moving as fast for whatever reason. Use Edmunds.com to gauge the USED CAR APPRAISAL and try to land it for private party or trade-in value...ignore all the extras as the car dealers do when you trade....should be the same when YOU buy.
I have always bought new. If you buy used, you are merely buying someone else's problems, and the higher interest you pay financing a used vehicle (as most people do) generally eats up a great deal of the "savings" over the term of the financing agreement. The only used vehicle I own is a Polaris ATV that was less than a year old when I bought it. It is also the only vehicle I own that seems to continually give me problems.
As for depreciation... Let's just say if you see buying a vehicle as an economic investment, you really should consider a course in basic household finances.
Since I have good credit, I was able to finance my used car at 2.9% for 5 years. My bank finances new cars at 2.49% now so that's not much of a difference. On vehicles where they are offering 0% financing, they are going to try and take you up the back door and you will probably be eating a bunch more depreciation as well.
A car is not an investment, unless it is bought purely for speculation and not driven often if at all. A car is a utilitarian machine, with an expected lifespan that can vary greatly depending on the quality of maintenance, driving conditions and build/component quality. And when buying a car, your goal should be to lose as little money as possible while doing the driving you need to do. This means taking a full view of operating costs, depreciation, financing, and how well the vehicle suits your needs, driving style and driving conditions.
The tradeoff between new cars and slightly used cars is typically a wash, effectively. You get a lower upfront purchase price with a used car, but what you're getting is a product with a lower expected life, and the worst of the depreciation is still ahead of you. The only way to really save money is to a) not drive, or b) do the repairs yourself.. but that's just using your spare time instead of paying someone to work. There are all sorts of things that we can choose to do ourselves instead of paying someone to do it - cooking, cleaning, home repairs, gardening. Unless you're Superman, at some point you're going to run out of time..
Why? Most people switch out cars every three to five years, for something new, simply because they want something new, or the lease is up, or whatever. Rarely is a late model used car being sold due to it being a problem. Hell, these days, anything less than 10 years old is generally still in great condition and hasn't had much of a chance to have problems yet, unlike the old days ('50s-70s) when a year old car was out of warranty and often needed major repairs. So the ONLY thing that is wrong with used cars between 5-10 years old is that they often have had the bulk of their depreciation set in.
Yes, you do have to watch out for accident damaged cars or flood cars, but in general, lease returns and late model trade-ins are going to be good cars.
If you buy new, are YOUR cars problems? After all, as soon as you drive off the lot, it's a used car. Maybe you don't maintain your cars so that when you do sell them 5-10 years later they ARE problems. My cars are generally in a least as good shape as when I got them, be that new or used.
You did neglect to mention a new car having a warranty. CPO is not the same thing.
My opinion - I would only buy a used car for my kids starting out driving. And nothing over $5k-ish. I can't stand the thought of spending tens of thousands of my hard-earned dollars on a used anything that automatically means a shortened lifespan.
You did neglect to mention a new car having a warranty. CPO is not the same thing.
I didn't mention it becasue it wasn't relevant to the response to that particular poster. Used cars are not automatically someone else's problems, as most 3-5 year old cars are not problematic or unreliable and have merely been swapped out for something new as a lease return or as the owenr just wanting something new.
CPO actually usually has a longer/better warranty than new.
And yeah, I like having my wife in a new car with a warranty so that if something were to go wrong, I'd just call up the dealership and say "handle it." Peace of mind. But I have no problem working on my cars either, if they are out of warranty.
Quote:
My opinion - I would only buy a used car for my kids starting out driving. And nothing over $5k-ish. I can't stand the thought of spending tens of thousands of my hard-earned dollars on a used anything that automatically means a shortened lifespan.
Why not? My '02 Suburban 2500 was $6500 and has a good decade of useful working life left. My '06 Mustang GT convertible was $17k and in excellent shape and was huge savings over a $40k new one. I'm looking at choosing from a trio of used cars right now for possible purchase next year, an '01 BMW 740i Sport, that tend to go for $8-13k, an '03-05 Jaguar XKR that are in the '$14-18k range now, and an '07-08 Mazda Miata Grand Touring that tend to go from $12-14k right now. All reasonable purchases that save many, many thousands of dollars off new and have many useful years left. But even at that, I'm looking at them because I like the cars and can afford them.
I've had over 130 cars in the last 38 years, and I've only had 4 that were with me more than 3 years at a stretch (three of which I had for 5 years each and one that I've had for 20 years). I have had five that were bought new (well, 3 were leased).
I prefer to buy used... It is a better deal. But I'd have to have a lobotomy to consider buying a used rental car.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
