Does buying used cars even make sense anymore? (gasket, tires, trucks)
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I just bought a 2005 Volvo V70 2.5T with 70k miles and I'm not sure that really made sense.
The price was $8700 and with 11.5% interest over 4 years the total price is about $11k. Fine, but there's no warranty. So I added a Wells Fargo engine and powertrain 3yr/36k warranty for $2600 which comes out to $65/month (yes generally a bad idea but I can cancel it whenever I want).
So I've spent almost $14k for a 10 year old car with 70 miles. My payment is $290/month. In 5 years I'll probably have put another 70k on it and it will be worth $3000 maybe.
Wouldn't it have made more sense to buy a new VW Golf Sportwagen for $23k? I'd have a more reliable vehicle with a full warranty. If I got 3% interest over 5 years I'd be paying $436/month. The car would probably be worth $15k.
If you look at it as cost per year, I'm paying $11k to own a vehicle for 5 years, while if I bought new I'd be paying $8k. That's not even factoring the benefits of reliability, and the gas mileage (30mpg vs 17mpg).
Conventional wisdom says that buying new cars is a bad idea, and I think conventional wisdom is dumb (and so am I)
Wow you messed up man...
First, with that APR you have no business buying cars with anything other than flat out cash.
Second, those warranties are money pits and hard to get refunded even though they say it can be done. Good luck getting them to pay out for any major repair, you'll be without a car for a month while they hold things up.
Third, you bought a TEN YEAR OLD car. and on credit!
I recently(last feb) bought a used 2013 Impala LTZ with 24k on the clock for 13.2k @ 2.9% APR.
Its got a full GM warranty till 06/2016 or 36k miles and has a full GM powertrain warranty till 100k miles or 2018 at some point.
Ive already had a heated seat fixed under warranty and it involved no third party warranty BS, which I have dealt with before.
My monthly payment is something around ~220 but I pay 500 or so, I could never justify what you did but good luck man.
Try comparing brand new car against 1-2 year old of the same model. You'll soon find out that brand new cars are a better value especially with 0% financing and/or cashback and full warranty.
You're possibly right. I compared the lowest price Toyota Highlander that's brand new, with the lowest price Highlander that's two years old on Autotrader. Both same trims/options. The lowest price new one was around $42,000. The lowest price two year old was $36,000. If you can get 0% interest on the new one with a full warranty, I agree with you. When it's all said and done, you're spending the same amount money, because there's probably going to be some sort of interest on that used car loan, and you might want to take out an extended warranty for a couple years to have a "full" three year warranty on the vehicle (this one in particular only had 18,000 miles and still had a warranty on it.)
Some vehicles hold their values really well. If I'm going to spend over $35,000 for a vehicle, but can get a brand new one for $5000 more at 0%, yeah, I'd take the new one because it is a better value.
Then again, I'm a cheap skate and would be willing to drop down to one that's 5 years old or older.
I purchased a new car for my job last fall. I just wanted the cheapest transportation available that would work year-round in rain, snow, cold, heat, wind, etc. I originally planned to buy used, but because I drive 30-35K miles per year, I finally decided that buying new was the better answer for me. I bought a Prius. I'll drive it for another year or two and trade for another new one. I like having free maintenance (a Toyota gimmick) and no worries about repair bills, which had become VERY expensive with my old pickup. I think if you don't drive much, an older used car is probably cheaper. But also more of a gamble.
True. An older used car was a better choice for me because I only drive about 9000 miles per year and my wife and I can usually drive each other's cars if we're in a bind. Oh, and Wyo, Prius is a good choice, so don't listen to the naysayers. My ex-FIL has a 2003 Prius that is still going strong, and he drives a lot. Toyota sends him a quarterly postcard begging him to sell it to them, and it has 120K miles on it. And the gas mileage on them is astronomical. But you already knew that
the question was... "why by airfare with a credit card?" many reasons to do so.
buying a CAR with a credit card? No problem for me to buy a $35 car with a credit card... it costs more to license it than to buy it.
I don't do 'credit' (for cards or cars), as mentioned... get a less expensive car, rather than get credit. Car is just a tool / appliance. in 10 yrs it will be dead and gone (for most people) Mine is 39 yrs and not dead yet, I will probably die first.
We are in agreement. I misread the post. I thought it said using credit to by airfare. My bad.
Quote:
Originally Posted by wpme
Buying a used car from a Stealership and taking out a loan to pay for it has NEVER made sense.
Nope.
Quote:
Originally Posted by sspistol
I can't imagine ever purchasing a brand new car with the drop in value right off the lot.
Exactly. Most people never factor in the 20% your going to lose in the first year or the 15% each year after that. Most all cars can be bought for less than 50% of their original price after 5 years. Losing 10s of thousands of dollars in depreciation is hard to swallow unless your making 100s of thousands a year.
Quote:
Originally Posted by IShootNikon
Try comparing brand new car against 1-2 year old of the same model. You'll soon find out that brand new cars are a better value especially with 0% financing and/or cashback and full warranty.
I find this to almost never be true. Except for a few particular low volume, highly sought after models you can buy a 2 year old car typically for about 68% of what the original msrp.
The toyota highlander example listed in another post did not work out for me. 2015 LE was listed at 38K and 2013 models were going for 26K. 38K x 0.68 = 25.84K. Limited was 41.5K (avg price paid is 40K) and lots of 2013 models were available at 28K to 30K. So a bit over the 68% but again thats advertised price without any dealer negotiating so I am sure you could get one down to 28K which is right at 68%.
Now if you could buy that Highlander limited for about 34K or 35K then you could probably start justifying buying a new car over a used 2 year old car. Still tough to do unless your at a really low interest rate. Your still gonna lose about 15K in depreciation over five years, but its better than the 20k most people are gonna lose.
I bought an '06 Kia Sedona, 53k miles for $11k in 2009, it was 4 years old. Now at 9 years of age it still only has 80K on it.It replaced a 1992 {17 years old}.
I paid 8% interest for 5 years financing, which I thought was little high given my very good to excellent credit rating. But I NEVER intended to take the full 5 years to Pay anyway, and I paid it of way early. I bought it as what money I had I didn't want to sink into a vehicle at the time, as I usually pay CASH. This is only the second vehicle in all my years that I financed.
It had a manufacture's warrantee until it had 60K or a certain date nearly a year after I bought it, whichever came first. The year up came first..
Perhaps things have changed in Hawaii, but I have perused {last year} the used car listings on CL and the dealers in Honolulu on their websites, and FOUND LITTLE difference for the prices here, mainland small city upstate NY and Hawaii {I was looking as we are contemplating wintering in Hawaii when we retire, so I was comparing costs}. So I don't quite buy the "more expensive because it's Hawaii" argument. I WOULD buy that perhaps it is more expensive because it s a Volvo.
I won't call you dumb, but...a little desperate maybe?
I would have shopped around and searched well. { I looked at about 10 minvans before I bought the Kia Sedona from a dealer}. I also would have shopped for a better interest rate if I were you, but they go UP^ as the age of the vehicle goes ^ also.
I will keep the Sedona until it is about 15 years old, if not longer. I expect to put about $2-3K in it in repairs for the remaining 5-6 years I plan to keep it, things, at 10 years old, WILL wear out. I will have a tune up done, and even if it cost me another $1000 to do, the $3-4K I would spend is FAR CHEAPER than buying another vehicle.And it could last longer. AND I will save the money of the payment towards a new used model or a brand new one in the meantime.
So, Does it make sense?
If you:
1} can't afford a brand new car, it does.
2} if you realize it will need some work, it does.
3} if you KEEP it longer than the loan, and it still runs well, it does.
4} keep up with repairs, and not neglect the repairs, it does.
5} If you pay off early {TELL the financer to "apply to principle" when paying extra, or you get screwed!} It does.
6} If you can easily afford the payment over a new car payment, it does.
7} If your mechanic OK's it before purchase, it does.
If you bought it because you ONLY wanted THIS vehicle and it was the ONLY model around, Maybe it DOES NOT make sense.
I still think you could have done a better deal, but I am NOT THERE, nor looking anymore in Hawaii {or here for now}. I'd be interested to know why your interest rate is so high?
NEVER buy a car-new or used- with the idea of what it will be worth when the loan is retired, but on the value of service it will give you over the time you have it. And always plan to keep it longer than the loan- ideally so you can "save the payment" each month after it is paid for so the NEXT time you buy you can PAY CASH. OR so you will have the money to repair it!
JUst my opinion.
Your mileage may vary.
Close cover before striking.
Do not iron while wearing.
Do not use in or near water.
I just bought a 2005 Volvo V70 2.5T with 70k miles and I'm not sure that really made sense.
The price was $8700 and with 11.5% interest over 4 years the total price is about $11k. Fine, but there's no warranty. So I added a Wells Fargo engine and powertrain 3yr/36k warranty for $2600 which comes out to $65/month (yes generally a bad idea but I can cancel it whenever I want).
So I've spent almost $14k for a 10 year old car with 70 miles. My payment is $290/month. In 5 years I'll probably have put another 70k on it and it will be worth $3000 maybe.
Wouldn't it have made more sense to buy a new VW Golf Sportwagen for $23k? I'd have a more reliable vehicle with a full warranty. If I got 3% interest over 5 years I'd be paying $436/month. The car would probably be worth $15k.
If you look at it as cost per year, I'm paying $11k to own a vehicle for 5 years, while if I bought new I'd be paying $8k. That's not even factoring the benefits of reliability, and the gas mileage (30mpg vs 17mpg).
Conventional wisdom says that buying new cars is a bad idea, and I think conventional wisdom is dumb (and so am I)
It would have been a good buy had you stopped at 8700 . You have wasted on warranty . 70k miles in 10 years means its been used nominally and should last well as long as you perform the routine maintenance.
You can use that 2600 in case something breaks, rather than paying it as insurance.
IMO Volvos are better than German brands and last longer.
I just bought a 2005 Volvo V70 2.5T with 70k miles and I'm not sure that really made sense.
The price was $8700 and with 11.5% interest over 4 years the total price is about $11k. Fine, but there's no warranty. So I added a Wells Fargo engine and powertrain 3yr/36k warranty for $2600 which comes out to $65/month (yes generally a bad idea but I can cancel it whenever I want).
So I've spent almost $14k for a 10 year old car with 70 miles. My payment is $290/month. In 5 years I'll probably have put another 70k on it and it will be worth $3000 maybe.
Wouldn't it have made more sense to buy a new VW Golf Sportwagen for $23k? I'd have a more reliable vehicle with a full warranty. If I got 3% interest over 5 years I'd be paying $436/month. The car would probably be worth $15k.
If you look at it as cost per year, I'm paying $11k to own a vehicle for 5 years, while if I bought new I'd be paying $8k. That's not even factoring the benefits of reliability, and the gas mileage (30mpg vs 17mpg).
Conventional wisdom says that buying new cars is a bad idea, and I think conventional wisdom is dumb (and so am I)
I paid $13,000 for a 5 year old Acura with 35,000 miles in 2003...and I'm still driving it 12 years later, it now has 308,000 miles and still runs great (knock wood). I will definitely buy used again when I get another car. I've never bought a new car ever and I'm 53. I feel like I can afford a better used car than I could buy new.
The toyota highlander example listed in another post did not work out for me. 2015 LE was listed at 38K and 2013 models were going for 26K. 38K x 0.68 = 25.84K. Limited was 41.5K (avg price paid is 40K) and lots of 2013 models were available at 28K to 30K. So a bit over the 68% but again thats advertised price without any dealer negotiating so I am sure you could get one down to 28K which is right at 68%.
Now if you could buy that Highlander limited for about 34K or 35K then you could probably start justifying buying a new car over a used 2 year old car. Still tough to do unless your at a really low interest rate. Your still gonna lose about 15K in depreciation over five years, but its better than the 20k most people are gonna lose.
Yeah, my example just assumed that the buyer is willing to purchase at those prices that I found, and the assumption is that the buyer can get 0% on the new Highlander, but would have to pay interest on the used loan. I used 5% interest on the high end, but often, I know a lot of people who do pay that type of interest rate on car loans, so it's not out of the realm of possibility. I also took into consideration that the buyer would purchase an extended warranty for a couple of years on the 2013. In the end, it wound up costing the buyer around $41,000 to purchase the 2013 Highlander (same trim, same package), and about $46,000 to purchase the brand new 2015 model. It's about a $5,000 difference, but once you get into that type of price, I'm not sure $5,000 would be a big enough savings to consider the 2013 over the brand new vehicle.
Why would you spend $14K on a 10 year old used car that has 70K on it?
I just bought a 2006 Lacrosse with 114K on it for $4200. Sun roof, leather, blah, blah......cash. You could of bought three of these and took short trip to Las Vegas with the change.
Nice car Coalman. That baby is barely broken in at 114K miles, especially the way it's obviously been taken care of.
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and on credit! 
). I will definitely buy used again when I get another car. I've never bought a new car ever and I'm 53. I feel like I can afford a better used car than I could buy new.
