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Yep. With most cars, the street price is about 8% under MSRP. I've bought leftovers rotting on dealer lots in the fall that had rebates/incentives for 25% under MSRP. There's no way I'd buy a late model used car for similar money. I want the new car warranty and I want to know how the car was driven & maintained since that's the big impact on long term reliability.
Half the reason I'd want to buy new is to get the exact colors and options I want. Relying on dealer inventory late in the year doesn't really give you that.
While I don’t agree with everything DR says, lots of his stuff makes sense.
My criteria?
I won’t buy new anymore. I’ll go buy a CPO price cap at 25/27,000. Used? One owner 100/110,000 miles max 10 years or less age. Maintenance records. No paperwork issues. I’ll never waste 30% of my yearly income equivalent on a car.
I see plenty of applicants for rentals with nice new cars and big payments. And when doing the calcs their still or income is so jacked because of that nice high car payment I have to say I’m sorry you dont qualify.
Most people shouldn’t be buying the vehicles they currently drive.
Totally agree with this. Cars are probably the biggest issue in terms of people blowing money they don't have and don't even realize it. I have friends that probably make just over $100k but drive new cars that cost about $1,100 in payments every month and another $400 to insure. Can they "afford it"? Well yes, they do make payments on them. But if they came back down to earth with the vehicles, had $500 in total car payments and $200 in insurance they'd be able to put $800 a month towards investments. In 25 years at 8.5% thats $895,000!!! That would put them around age 55...
So instead of early retirement, many people give it all up for flashy cars with big payments, then complain that the world is against them and there is no way to retire at 65 let alone early.
I think this is another simplistic view of his. Every time I’ve looked to buy gently used I’ve been able to find deals on new cars where it doesn’t really make sense to deal with the additional 50-70k miles. I’ve bought two new cars after researching both used and new in the model I wanted. Both times the 3-4 year old models with 50-70k miles on them were almost the same price after negotiatons and rebates. The first one cost 15% more new and the second one cost 12% more. I’ll likely have both for the next 10-12 years. Both are paid off and one is 5 years old and just crossed the 30k miles mark and the other is 3 years old and just crossed the 30k mark.
But of course if you compare the sticker price new vs used there is a drastic difference (which proves his point). I guess I just didn’t know anyone actually paid the sticker price.
I found this same thing. I admit I've never been a big driver myself, I always have worked for myself and worked from home, so the idea that I'm going to pay $23,000 for a car with 65,000 miles and it's 4 years old versus just pay the $30,000 for a new car with 18 miles on it is ludicrous to me. I don't know how long cars last now days, but it'll be a cold day in hell before I drive around a car with 100,000 miles, I would sell it if it got anywhere close to that and move on with my life. So buying a car with 65K miles to me is like buying a more-than-half-used car, the useful life of that car is already mostly shot as far as I'm concerned. I don't want to deal with its issues. How in the world someone puts that many miles on a freakin' car in 4 years is absolutely baffling. Are they commuting to another planet?! My Camaro just hit 8,000 miles and it's 6 years old. My Nissan Rogue that we mainly use is around 8,000 miles per year and that's quite a lot, but still it'll be a long time before it hits 100,000 miles and needs replacement.
In my opinion if you want to sell me a car that has 65K miles it needs to be HALF the price of a new car, at the very most, and I even think that's a rip off. I go and look up the KBB value of these cars and they're nowhere near that high, but the dealerships will sit there telling you, "Well you can save a few thousand bucks by buying this heavily used car that's only 4 years old." Uhh, gee, you know, gonna have to pass on that! I wonder if they're just trying to sell their new cars. I found the discounts mostly worthwhile on the cars with 10-30K miles, they were a good substantial discount but not a huge one. Then the ones with 60-80K miles they were trying to sell for just a few thousand less, which I'm just not having.
I found this same thing. I admit I've never been a big driver myself, I always have worked for myself and worked from home, so the idea that I'm going to pay $23,000 for a car with 65,000 miles and it's 4 years old versus just pay the $30,000 for a new car with 18 miles on it is ludicrous to me. I don't know how long cars last now days, but it'll be a cold day in hell before I drive around a car with 100,000 miles, I would sell it if it got anywhere close to that and move on with my life. So buying a car with 65K miles to me is like buying a more-than-half-used car, the useful life of that car is already mostly shot as far as I'm concerned. I don't want to deal with its issues. How in the world someone puts that many miles on a freakin' car in 4 years is absolutely baffling. Are they commuting to another planet?! My Camaro just hit 8,000 miles and it's 6 years old. My Nissan Rogue that we mainly use is around 8,000 miles per year and that's quite a lot, but still it'll be a long time before it hits 100,000 miles and needs replacement.
In my opinion if you want to sell me a car that has 65K miles it needs to be HALF the price of a new car, at the very most, and I even think that's a rip off. I go and look up the KBB value of these cars and they're nowhere near that high, but the dealerships will sit there telling you, "Well you can save a few thousand bucks by buying this heavily used car that's only 4 years old." Uhh, gee, you know, gonna have to pass on that! I wonder if they're just trying to sell their new cars. I found the discounts mostly worthwhile on the cars with 10-30K miles, they were a good substantial discount but not a huge one. Then the ones with 60-80K miles they were trying to sell for just a few thousand less, which I'm just not having.
Like anything else you need to look for the deals.. To some people its not worth the time to look, just like everyone knows trading in a car gets you the least amount of $ but most people simply don't feel like dealing with trying to sell it on their own.
We were looking for a CPO santa fe for about 3-5 weeks. I wanted it loaded up and only 2-3 years old. Had to be CPO cause I wanted the 10 year 100k. We found a 3 year old model with all the bells and whistles probably about $35,000 when new. It had a very small ding near the front bumper an another little scuff on the passenger door likely from a parking lot. It was still a CPO and only cost $18,000 with 30,000 miles on it. So someone took about a $17,000 hit on that car in 3 years.. Which is why we look for CPO.
Half the reason I'd want to buy new is to get the exact colors and options I want. Relying on dealer inventory late in the year doesn't really give you that.
I don't have that kind of emotional investment in my cars. My car exists to enable my lifestyle. I don't care much about colors. My last one, I needed a car in a hurry and what I wanted was in short supply with none on dealer lots. I took the first one available at that trim level that wasn't black. The car is going to depreciate to zilch in 7 or 8 years anyways. Hopefully, I won't need the next car in a hurry so I can buy it as a leftover at a steep discount. I don't usually buy cars in the middle of a model year unless I have to. I want that multi-thousand dollar dealer incentive layered on top of the 8% off MSRP everybody gets.
Most young people I know buy a new car as the first thing they do after they landed their first full-time job as an early 20-something. They're still living at home, but that's a moot point. I have no problem with living with your parents as long as you have a full-time job.
Most young people I know buy a new car as the first thing they do after they landed their first full-time job as an early 20-something. They're still living at home, but that's a moot point. I have no problem with living with your parents as long as you have a full-time job.
Heh, I remember trying to buy a brand new Mustang after graduating college. Thank goodness even the sales guy at the Ford dealership told me what a bad financial idea that was! I lucked out big time by avoiding my own young stupidity there.
Heh, I remember trying to buy a brand new Mustang after graduating college. Thank goodness even the sales guy at the Ford dealership told me what a bad financial idea that was! I lucked out big time by avoiding my own young stupidity there.
Wow, that's a miracle a salesman would tell you that.
Most young people I know buy a new car as the first thing they do after they landed their first full-time job as an early 20-something. They're still living at home, but that's a moot point. I have no problem with living with your parents as long as you have a full-time job.
Meh, buying new cars right out of college is what keeps people at home with their parents. The new car money is money that could go for a down payment on a house, or toward retirement savings.
Wow, that's a miracle a salesman would tell you that.
Well he asked my income and knew I didn't have much of a real job history, so I think he was also saving himself some time since I doubt I could've been approved for a loan. He tried getting me into a new Focus with their "new college grad" program, but even that wouldn't fly.
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