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I consider myself very financially conservative but I like to buy new and keep my car for a VERY long time (10+ yrs, 150k miles at least). My current vehicle that I bought new in 2004 is almost 12 years old and I will change it when I hit 150k miles.
I think it's ok to buy new as long as you keep it for a decade at least. I like to buy new because I know how I have taken care of it from the beginning, and these days due to manufacturer rebates and aggressive pricing coupled with the fact that people are asking outrageous prices for used cars buying new is not that much more.
Buying new might be ok in Dave's world IF you are paying CASH for it. I will agree that a slightly used car has much less depreciation, but yes, but new, but pay cash! Your still going to take that big depreciation hit. You need to ask yourself if that is ok with you.
In all my years, I have only bought 2 new cars.... both cheaper ones.
I have regretted each time... not because of the car itself but because I know I'm paying a premium on the depreciation.
Always buy used cars because all of the cars today are priced for leasing. The MSRP is inflated because more and more consumers are willing to buy more car than they can afford through leasing... inflated consumer power.
I have no problems finding good used cars... many are off lease with less than 40k on the odomerter.
I've only bought one new car (fairly recently, the one prior to my current car) and I don't see myself doing it again. Used car pricing is too attractive to pass up when you can buy a 3 year old car for significantly less than a new one and experience less depreciation.
That said, we need people to buy new cars so that I can get these deals on used cars.
Buying new might be ok in Dave's world IF you are paying CASH for it. I will agree that a slightly used car has much less depreciation, but yes, but new, but pay cash!
Enjoying my life and getting a new car every few years trumps being a cash hoarder and missing out on certain things and experiences in life that I enjoy in order to save. Not only do I not buy a new car every few years, I lease instead. To me there's no pride in automobile ownership unless its a rare collectible/exotic. A vehicle is nothing but a depreciating appliance that will only end up in a scrap yard in due time.
Last edited by louie0406; 04-03-2015 at 10:37 AM..
My cost per mile to drive new is less than my cost per mile to run.
Cars are not assets. They are tools. New/used/lease/rental, compact/monster suv, it's all about cost per mile.
In six years my new minivan will have 60,000 miles on it and will sell for $12,000, costing me $14,000 in deperication from new, I'll throw in 10 oil changes ($400), 5 sets of wipers ($100), two brake flushes ($40), one brake job ($400), 5 filter sets ($100), a set of tires ($800), and two power steering fluid flushes ($15).
The total cost is roughly $16,000 for six years of operation in the safest car on the road.
That's about a quarter a mile to drive (plus gas and insurance), or $222/month. That's really cheap.
If I bought this car from someone like me, and drove it to 120,000 miles I'd have about $4k in maintence, plus a higher risk of breakdowns and could sell the car for about $6,000, for a six year, 60,000 mile cost of $10,000, or 16 cents a mile/ $138/month.
$$$ wise it makes more sense to buy used, but for me spending $1,000 more a year gives me piece of mind (even if I hate my car, I so hate minivans, at least I only have to drive it when I have kids with me).
If you're socking away 20% for retirement, and funding the kids college funds, and living as you want, and still have money to spare, then spend it on things that make life easier, and for me having a new car is just easier than having a used car (and crushes leasing, but that's another discussion).
If I had a weekend car, some sort of toy or hobby, then I'd buy used, but for cars that I need to function at 100%, 100% of the time, I've got to have new. Can't have my family broken down in a bad area, or without AC or heat, or in something with dated safety systems, it's just not worth the savings.
The leasing comment was not a jab at the poster ahead of me, I hadn't seen his post prior to making mine. The reason I said new crushes leases is because I priced out my latest car and anything over 36 month weighed in favor of buying new (hinging on stable trade-in values).
Again leases can work really well, and I'm not knocking anyone who leases.
People keep saying buy used...i'm willing to buy used ONLY if I get a HUGE discount over the new price. By huge I mean at least 25% off regardless of how "new" it is. Say it is a 2 year old car I am not paying 5% under the price of a new car, I am paying 25-30% off for a car in GREAT condition with ALL service records then it is a good deal to me otherwise why the heck would I take the risk of buying someone else's problem? Who knows how they treated their car?
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