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Let's say you don't care about the new car smell, isn't buying used a much better deal?
For example, a 2016 Honda Accord EXL costs about $29K, but if you buy the 2013/2014 version with 20,000 miles on it, you can buy one for about $19K. That's a $10,000 saving.
Not in my case. With the discount amounting to 20-30%, there is no sense going with a truck that's 1-3 years old. In fact, if this trend continues, I'm getting a new one every year.
Also if you buy used from a private owner cost is usually just somwhere halfway between trade in value and dealer used car price, plus most states they are very strict on dealers and sales tax but not so much private owners.
For instance I went to look at a late model land rover. Car was mint, mint, mint guy actually wanted same as dealer used price. I fought with him and said skip it. He sold it at that price a few days later.
Why, well he told me I am a CEO, bought it new, it is a third car, as a businessman I want to keep 100% of the profit the dealer would make if I traded it in. What do you get in return, you meet the owner, see where car was parked, get all paperwork and I sell it to you with no sales tax which in my state is a $2,500 savings.
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You really think you can register it without paying the sales and use tax? It would be impossible in Vermont.
I buy new. The savings was negligible on my last car.
Plus, life is short. I enjoy owning nice things and knowing the history of my vehicle. I also drive them for 200k or more miles and 10 plus years so the savings isn't really there if I bought used. My cars are pretty much worthless when I get rid of them.
If you're the type that gets a new one every five years then used is better.
You really think you can register it without paying the sales and use tax? It would be impossible in Vermont.
VT and CT and a few states are strict. Places like NY in a private party transaction folks it is on the honor system.
Plus unlike VT in NY anyone can gift you a car.
Many years ago I bought a One year old Jeep from an estate where the daughter just wanted me to pay off car loan. Which I went to bank with her and paid if off, then she transferred title to me. We used the Gift form as no money changed hands.
She inherited a Jeep, lived in Manhattan, she also got payment and insurance. Dad put hardly any money down.
No one at DMV batted an eye why I was given a Jeep, honestly none of their business.
If I lived in VT I would register my cars in NY where sanity prevails.
My brothers 1967 Firebird he bought used in 1980 he never changed the tranny fluid or raidiator. Car runs fine. Prior owner said she changed it once around 1976,
I also bought my mothers 1969 Plymouth in 1989 sold it in 1993 with original tranny fluid and two of the original tires on the car.
Too bad Japanese cars are delicate little snowflakes.
Just because something will still run with old fluid and old rubber doesn't mean it should. Nothing is bulletproof and everything mechanical will eventually wear out and fail. Neglecting to do maintenance is just helping push that along much faster. Food for thought.
Not always. If you keep a car a long time, buying new costs you less in the long run.
The used car will start needing repairs before the new car.
The new car has a long warranty.
New car will get a bit better gas mileage at first than used car.
The new car will last longer.
Finance rate for new car is lower.
Depreciation doesn't matter, when you keep a car a long time.
You know it doesn't have a shady past.
Used cars cost less.
Ins. might be less.
Less depreciation (if you're not going to keep it longer than 5 yrs)
You can never be 100% sure how the car was maintained or driven or had damage.
Saves you money at the front end, but costs you more at the end, if you keep it a long time.
Check intellichoice.com and other sites to compare the 5 yr cost for a vehicle, used or new.
If you're only going to keep a car for 5 years, it's probably a better deal to buy used, I think, depending on the used car.
Used will cost less..cause the initial cost is much less. Obviously you don't want to be stupid and buy a junker used car.
Look at sites daily, find a 1-owner car with lots of records. Get a 5yr car. Even with the timing belt and other big service it will cost less.
Who keeps a car 25 years these days anyway.
But if you are buying used you are going to be more likely to do your own work/know to buy used cars...and so you save money...whereas some people who buy new are always buying new because they are afraid of old cars...and they end up spending TENS of thousands.
I bought a 1995 Honda Accord in 2004 for $5000. I drove that car for 11 years and spent estimated $5000 for repairs/maintenance during that time. So total cost of $10000.
A new 1995 Honda Accord in 1995? $20,000 (and this is 1995 dollars mind you). And if I kept it for 11 years, I would've at least had to do the big timing belt service too...which is another $1500 + other maintenance over 11 years....another $1000 to be nice.
So now we're at $22,500 over 11 years for a new Accord
vs.
$10,000 over 11years for a used Accord.
Yeah used cars is WAY cheaper than new car. I just bought my 2nd car ever, a 2006 Acura TL (brand new MSRP is $35,000 btw) for $7500. Spent about $500 so far in maintenance and some work I was able to do myself. So I'm at $8000 so far. I think I'll beat the $35,000 easily over the next 10-15 years that i will drive this car.....
Buying a proper used car is almost always going to be way cheaper than a brand new car (obviously don't get a used AMG/M5/RS/etc. high performance used car as they are exceptions since they will be expensive to maintain) but otherwise it is way cheaper:
Lower insurance, lower tax, less having to finance, less dealing with salesmen (if you buy from private seller), less worry on cosmetics if something scratches paint, etc
Not always. If you keep a car a long time, buying new costs you less in the long run.
The used car will start needing repairs before the new car.
The new car has a long warranty.
New car will get a bit better gas mileage at first than used car.
The new car will last longer.
Finance rate for new car is lower.
Depreciation doesn't matter, when you keep a car a long time.
You know it doesn't have a shady past.
Used cars cost less.
Ins. might be less.
Less depreciation (if you're not going to keep it longer than 5 yrs)
You can never be 100% sure how the car was maintained or driven or had damage.
Saves you money at the front end, but costs you more at the end, if you keep it a long time.
Check intellichoice.com and other sites to compare the 5 yr cost for a vehicle, used or new.
If you're only going to keep a car for 5 years, it's probably a better deal to buy used, I think, depending on the used car.
I wanted to address this as I missed it previously.
The used car will start needing repairs before the new car. - While there is SOME truth to this, you are choosing to make a higher monthly payment in lieu of repairs. The money is still coming out of your pocket, but going into a payment bucket instead of a repair bucket. Often times a new car costs more per month than a repair bill.
The new car has a long warranty. - True.... but you are paying more to get it. If you don't use it, you paid for nothing. Often times it is still cheaper to pay for repairs than pay for a warranty "just in case". Obviously this is a gamble either way. You might not use the warranty, but you might buy a car that needs a lot of repairs.
New car will get a bit better gas mileage at first than used car. - Myth. If the used car were properly maintained, it will still get the same (or extremely close to) fuel economy.
The new car will last longer. - Of course. But you are paying more to do it plus eating depreciation. Also assumes that you also keep all of the maintenance up to date. It has less miles. That doesn't mean that you cannot go hundreds of thousands of relatively trouble free miles in a used car. All depends on you.
Finance rate for new car is lower. - True in most cases. But we're back to the whole amount paid thing. If you finance Vehicle A at $40k at 1.9% interest for 72 months you are going to pay out a total of $47,600 plus GAP insurance. Per month that comes out to roughly $661 per month. Add in GAP and you're at almost $670 ballpark.
If you finance Vehicle B (used car) for $18,000 at 3% interest for 48 months, you are paying $487.50 per month. Total financed would be $23,400. If it's low mileage, and you finance at 60 months, your payment is around $390.
Now, let's assume we can get 200k miles out of both vehicles. Vehicle A will cost you $.24 per mile in monthly payment. Vehicle B has 70,000 miles on it already. So you've got 130k miles left. It would cost you $.18 per mile in monthly payment.
After 2 years, your free maintenance is typically gone. Your cost of ownership increases. After 3 years in many cases your warranty is gone. Now you have to pay for maintenance AND repairs, and you still have the same monthly payment for another 3 years.
Depreciation doesn't matter, when you keep a car a long time. - Correct. If you plan on running it in the dirt, then it really doesn't matter. But many consumers buy a new (or different) vehicle every 2-3 years. If you're one of those consumers, you're absolutely going to eat the depreciation.
You know it doesn't have a shady past. - Most of the time this is true. Unless you buy a new car that begins to exhibit problems that the dealer cannot fix. This happened to us on the 2014 Venza that we purchased. Toyota didn't even know how to fix the problem and told us we were out of luck. We had more problems with that brand new car than we ever had with our used vehicles. If you get a used vehicle inspected (if you don't know how) and you can get maintenance records (if it were serviced by a dealership they will have the records on file) it's safe to assume it was maintained properly.
You know it doesn't have a shady past. - Most of the time this is true. Unless you buy a new car that begins to exhibit problems that the dealer cannot fix. This happened to us on the 2014 Venza that we purchased. Toyota didn't even know how to fix the problem and told us we were out of luck. We had more problems with that brand new car than we ever had with our used vehicles. If you get a used vehicle inspected (if you don't know how) and you can get maintenance records (if it were serviced by a dealership they will have the records on file) it's safe to assume it was maintained properly.
But your 2014 Venza will have a shady past as a used car (when you or the dealer off loads it onto someone else).
It didn't have a shady past as a new car. It was just a lemon.
But your 2014 Venza will have a shady past as a used car (when you or the dealer off loads it onto someone else).
It didn't have a shady past as a new car. It was just a lemon.
By "shady" past, my assumption is that the OP means you do not know if the maintenance was kept up or what type of work was performed. A dealership has the maintenance records and will provide them to whomever owns the car (minus the previous owner's info).
The Venza didn't have a shady past when we bought it as it only had 8 miles on it. BUT..... my point was to show that even a new car isn't guaranteed not to have problems. It's a gamble. For us, warranty covered the repairs they did do, but we were still out multiple trips to the dealership and out use of the vehicle for weeks at a time.
As of right now, that Venza has a shady past. The local dealer has all the service records. But they didn't fix the problems. The dealer we bought it from one town over has those records and since they attempted to cover up the roof issue, it's likely the local dealer won't see it in the warranty history.
It's a gamble to buy a used car. But it's also a gamble to buy a brand new one.
It's a gamble to buy a used car. But it's also a gamble to buy a brand new one.
But are the odds the same?
Going back to something you mentioned earlier, the average initial ownership length of new cars is just under 8 years (Dodge and Buick being over 9 years and Benz being around 6 years).
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