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.
Maybe you don't understand how used/new cars are viewed
Once a car is registered by law can't be sold be sold as new. Even if it has 0 miles on it. What matters is that its been registered to a person
Which means banks have to finance it differently
Manufacturers warranty that applied to ORIGINAL purchaser and sold to 2nd owner may not transfer
Any rebates that apply to the new car do not apply to used car
Mileage depending on how much will also devalue.
These things alone devalue the vehicle
Your depreciation is based on more than just a few miles driven. Ok take your example. Two cars same brand options color. Basically twins in every respect. And one new zero miles one used with one mile. Let's give that one mile a deduction of $100 which is 200x the value of .50 cents a mile cost. Would you buy a used car for $100 less than a new car when a new car offers a longer warranty, cash back/rebate discounts, no mileage and better loan terms?
in what world would a manufacturer warranty (typically 36K or 60K depending on brand) would be reduced for the car with 1 mile on it?
and while you can get certain loan terms through the dealer, my credit union doesnt care if the car is new or used they'll give you that 1.49% either way.
i get the point you're trying to make, but it's not as drastic as people like to paint it to be.
I think roommate situations are a great way to make housing more affordable, and my own family has many examples of relatives pooling their resources during tight times. I've never actually lived completely on my own. When I was in college, I lived either with my parents or a roommate. Then I married and lived with my spouse. I don't understand why it's considered class warfare if a single person working a minimum wage job cannot afford to live on his own. I certainly couldn't have at that stage of my life.
I think roommate situations are a great way to make housing more affordable, and my own family has many examples of relatives pooling their resources during tight times. I've never actually lived completely on my own. When I was in college, I lived either with my parents or a roommate. Then I married and lived with my spouse. I don't understand why it's considered class warfare if a single person working a minimum wage job cannot afford to live on his own. I certainly couldn't have at that stage of my life.
It's not. It's just people whining because they feel entitled and the free market isn't giving them what they want, because they can't pay enough.
Sorry, that is class warfare. You want to keep me out of your neighborhood, get yourself a gated community, an HOA, or a deed-restricted subdivision.
Oh, and I would have loved to have been able to continue on to law school (my purpose in getting a useless degree), but I couldn't afford it. And I can't afford to go back to school, so I don't have the luxury of the same option you exercised. I had more than four computer programming courses - as a specific component of my degree, I had a minor in CS - but those were in legacy mainframe languages which were soon to be eclipsed by the emerging PC and all the software which followed.
You have more excuses for not changing your circumstances than an old barn dog has fleas! My guess is that you'd rather work a crappy, low paying job with no responsibilities and no prospects than put any real effort into improving your situation.
Have you bothered to check any civil service job postings with your city, county or state? What about with the Feds? Did you bother to apply to the US Postal Service when they were hiring a few months ago? Civil service is a good starting point for people with liberal arts degrees.
Pick up a few computer courses at your local community college. If you're truly making only minimum wage, you may very well qualify for some financial aid if you take at least 6 credit hours a semester.
My neighbor around the corner celebrated his 51st birthday and his one year anniversary as a NYS Corrections Officer about 5 days apart last week. He was tired of working jobs that kept disappearing, so he took the civil service exam, got himself in shape, suffered through the training course along with mostly 20 somethings, and now has the opportunity to make good pay and benies for the rest of his working life and have a decent retirement when he's done. If he didn't try, he'd have never gotten the opportunity. Again, get off your butt and put some effort into improving your situation.
A bank will not give the same rate on a used car as if they would on a new car financing. They just won't. Try getting a offered new car loan rate on a used car. Even if you get it you still lose out. a used car is more rusk to the bank. Because it's devalued and if you walk they hold a even more depreciated asset.
Dodge, Hyundai some others have had a extended warranty up 7/100 or lifetime in some cases on top of the 3/36 -5/60 bumper to bumper factory warranty that ONLY the original purchaser was eligible. It did not transfer to second owner. The initial 3/36-5/60 bumper to bumper was transferable. So you lost on the extended warranty coverage
A rebate is just that. A rebate. A coupon if you will. Which means if I buy a car for 22,000 and it has a 3,000 manufacturers rebate I now am only buying the car for 19,000. Ok if you get a car say MSRP at 22,000. now I talk them down 2,000 I'm at 20k before the $3000 rebate. Now I just got a NEW car for 17,000 saving 5k rather than just 3k. Even though it's msrp at 22k. That rebate is only applicable to new cars not used cars. That's why you talk price BEFORE you even bring in rebates
In order to sell that same used car you simply CANNOT price it at the MSRP of a new car. Why! Because it will never sell. Nobody is gonna buy it if they can get the new car rebate. And the higher warranty and the better loan rate. That's why a used car has to be sold for less than a new car.
Actually, if you're arguing that a new car depreciates substantially when you drive it off a lot - the risk to the bank is actually far higher with a brand new car that you'll be underwater on your loan than with a used car.
your logic here is flawed. a used car, if the depreciation argument is true, is going to depreciate at a far slower rate, so the bank loan would be less risky, not more.
In order to sell that same used car you simply CANNOT price it at the MSRP of a new car. Why! Because it will never sell. Nobody is gonna buy it if they can get the new car rebate. And the higher warranty and the better loan rate. That's why a used car has to be sold for less than a new car.
and this is why MSRP is meaningless and you can't use it in the new vs used depceciation argument. if a new car is $35,000 but always has a $2500 "cash back rebate" like GM is famous for - the real price is $32,500. so calculate how much a car has depreciated from $32,500, not from $35,000 - the fake "sticker price" that makes people feel like they got a huge deal when they got it for $32,500 - which is likely still far above invoice price.
The financing terms got used cars are much higher. Anywhere from 3 to 5 percent compared to a new car. Manufacturers offer low financing as part of a complicated business model to move vehicles.
this is correct- IF you finance through the dealer.
A few percentage points. I don't have concrete numbers for you. 1-2%. But your credit makesadifference. But a used car loan has a higher percentage charged. Banks charge more for used car loans. Over the life of the loan it adds up. Hundreds maybe a thousand depending on rate and price of car.
You can also finance a new car with no money down. You can't with a used car.
When your bumper to bumper warranty is out and the factory extra POWERTRAIN warranty covers a $6000 blown motor or $4500 transmission you'll be happy you have it. You're not paying for it. It may not have a cash value to the price like you're asking but it's a coverage that you don't get on a used car. Its included coverage in the price of a new purchase and it's not in a used purchase. To some it's worth buying new for that additional free included coverage which you are simply not given the choice to get on a used car. If you WANT a extended warranty on a used car it runs $12-$1500 and usually a 3rd party coverage.
The car driven off the lot
If financed
You have your loan and balance you must pay off. The payoff will be higher because of the interest rate. You're automatically upside down on the car value vs loan.
If you bought it cash you will have to entice a buyer and sell for less. Because as the second buyer you lose those things I spoke about. Unless you can get the buyer to buy cash he must get a loan. A bank will charge higher rate on a now used car. Which will in turn dictate how much he can borrow and pay. Up to you to drop price to sell.
There are a lot of factors that dictate the new vs used value. But there is a difference.
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.
