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That's why I said "IF" you pay cash for cars. I know most don't, but for those of us who do, it doesn't make sense buying new if the depreciation is so steep. For us, interest rate really does not matter. It's depreciation versus repairs.
Who says depreciation is steep? Like I said it only appears steep if you pay sticker price. According to KBB if I do private sale my car is still worth more than I paid for it in November. In just very good condition and about what I paid for it if I do trade in. We plan to keep our cars for 10+ years as we only put about 10k miles/yr on them I'd personally rather pay the extra 10-15% and get 4 more years of use out of a car than pay 10% less and buy one with 50k more miles on it.
So as I've said before, if you aren't willing to wait for opportune times to buy cars and negotiate a little used cars are much cheaper, if you are you can often get just as good, if not a better deal, especially if you are looking for newer cars (last 2-3 years) with under 50k miles. If you are comparing new to 5-7 yr old cars with 80-100k miles on them, yes used is much cheaper. I didn't want to replace a 10 yr old car with 175k miles on it with a 7 yr old car with 100k miles on it for my wife to drive around our newborn in.
For some brands buying a 2-3 year certified used car doesn't have that much depreciation compared to new. Go look at a precert 2014 Honda you'll see what I mean.
If the cost of ownership ends up being equal (repairs, gas) obviously buying the slightly used is wiser, but if you're planning to keep it ten years the cost of ownership spread over that time isn't significant enough to worry about it too much. It isn't the same as someone who buys a new car every four years.
Who says depreciation is steep? Like I said it only appears steep if you pay sticker price. According to KBB if I do private sale my car is still worth more than I paid for it in November. In just very good condition and about what I paid for it if I do trade in. We plan to keep our cars for 10+ years as we only put about 10k miles/yr on them I'd personally rather pay the extra 10-15% and get 4 more years of use out of a car than pay 10% less and buy one with 50k more miles on it.
So as I've said before, if you aren't willing to wish for opportune times to buy cars and negotiate a little used cars are much cheaper, if you are you can often get just as good, if not a better deal, especially if you are looking for newer cars (last 2-3 years) with under 50k miles. If you are comparing new to 5-7 yr old cars with 80-100k miles on them, yes used is much cheaper. I didn't want to replace a 10 yr old car with 175k miles on it with a 7 yr old car with 100k miles on it for my wife to drive around our newborn in.
This just goes to show that everyone needs to do their homework before buying a car. Depending on lots of factors, the savings of buying used vs. new may or may not be enough to make sense. Fair?
Yeah, but you're talking "Capital U" USED. You're not going to get a lease car coming off a 36 month lease for anything like that. I live in the land of road salt, I have no interest in a car that has seen the years of road salt to depreciate down to $4,700.
The price of late model used cars has dropped some. At the Great Recession, new car sales ground to a halt so there were 3 or 4 years where there weren't many 3 year old used cars available. Now, 30%+ of all new cars are leased and you'll have some fraction of owners who buy & trade every 3 years. Late model used cars are cheaper than they were in 2012 but they're still pretty expensive. Personally, I like having the peace of mind of knowing my car is under warranty, that all the maintenance has been done, and that the car hasn't been beat on.
I also know that the odometer hasn't been rolled back. With digital odometers, that's a 30 second operation through the ODB II port on most cars. Tons of people with leased cars roll the odometer back before turning the car back in to avoid the mileage surcharges. I know a couple of places around me that would roll mine back for $100 cash. If the car hasn't been into the dealership in the last year, you can make a year's mileage vanish with a few mouse clicks. That 35,000 mile cream puff may have been used for Uber and seen 60,000. Detailed and with any rock dings and door dings touched up, it's impossible to tell.
I only buy used with a good service record, so I am not worried about the odometer being rolled back. With the continued rise of new car sales, the used car lots are jammed with inventory in our area, so it is not hard to find a really good car at a reasonable price.
This just goes to show that everyone needs to do their homework before buying a car. Depending on lots of factors, the savings of buying used vs. new may or may not be enough to make sense. Fair?
Yes, that is essentially the point I was trying to make. Everyone always bashes buying new and basically implies if you buy new you got screwed. So much so that I spent the first 6 months of car searching only looking used. If you only ever look used you might miss a potential deal for a new car. The best deals I've ever seen are when the body style is changing. If you were looking used you wouldn't care about that change anyway.
We have two paid off cars. I am indeed plannning to replace the elder of the two with a new 30k+ one in about a year. I'm in the business and I pay my bills. This car will cost about 4 times more than our first brand new car. Our income has more than kept pace with that. So what.
Bottom line. After paying $30,000 plus other fees after the last payment is made what do you have? The potential for major repairs on a 4-5 year old car or starting over again. It's a never ending cycle unless you have an asset such as a rental property to pay that monthly nut.
Depends. I kept cars well over a decade and it worked out. My current car is 15 years old and runs like a top. So if I buy a good car and pay a fair bit, I expect to be able to do that again.
Yeah, but you're talking "Capital U" USED. You're not going to get a lease car coming off a 36 month lease for anything like that. I live in the land of road salt, I have no interest in a car that has seen the years of road salt to depreciate down to $4,700.
Quote:
Originally Posted by mizzourah2006
The list price on the car I bought was a little over $32k, I paid a little over $23k. Like I said the same car used in a 2013 model with 45k miles listed at $21k. Perhaps I could have negotiated down further but certified pre-owned don't typically have a lot of wiggle room. Is 45k miles worth 2-4K? To some people it may not be, to others it may be.
Off-lease cars are still used and dealers put that CPO label on them to pimp them as "like new" to keep the price above avg used.
I wouldn't bother looking at those when private parties sell the same car for much less.
It doesn't sound like you've looked hard enough to find used cars, I never look at used car dealer lots when there are tons of listings on line and within forums too. If there's a specialty car that I wanted I go to the forum and look for private sales directly and neg. with the owner directly.
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