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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)
What did you drive before, and was it still perfectly usable with maintenance? My strategy is to buy brand new and keep a vehicle for 15+ years, or until newer technology or better MPG is too tempting.
I'd examine the "need" to constantly upgrade, which many people fall into, but which is also the bedrock of this unsustainable economy.
do not use KBB. That's a retail model and you are retarded to use it, period. Use edmunds.com. And use that ONLY because you don't have hearst's publication, the black book. Do not use KBB and fool yourself into believing yours, or anyone else's car is worth that. It's not.
Start with average TRADE IN value and go don.
Don't add for alarm, compass, dual climate as no broker or dealer does. It just helps to sell the car.
Careful what color you choose. Light Blue, Black, Bright Red, Light Green, Orange, Yellow,are deducts. Few want them. Use it as leverage if you buy a used one.
Get both Key FOBs and any spare keys.
Ask to see receipts for maintenance
Smell the oil for burning
Smell the transmission fluid for color and burning
Look for poorly aligned panels for evidence of bodywork, run the carfax on the vin.
Check the title to make sure the VIN matches
In general, do not buy one with a salvaged title no matter the price
Bring a friend for security and 4 eyes are typically sharper than 2
Check the tires
Check the radiator
Check the date on the battery
Look at the disc pads on the brakes
Check the dash for cracks
Run the car for 10 mins for overheating
Bring a thermometer and check the AC.
Check the trunk for moisture
Check the operation of the sun roof if applicable
Check any leather thoroughly
Failure to do so could cost you thousands in reconditioning costs.
Ignore all of thes simple steps at your own peril.
Buying a used car makes good sense in certain circumstances. With interest rates near zero, one is hard-pressed to think of a circumstance when paying 11%+ interest on a car loan makes sense.
You can buy new cars with 0% financing. That makes a lot of sense. It's free money. Use the cash to earn money elsewhere.
I prefer certain types of cars, none of the newer ones were appealing so I purchased a used car with cash a few years ago. It was a good decision for me because of the total miles I drive varies quite a bit on a year to year basis.
That's the part that makes no sense. What were you thinking?
I paid cash for a 2006 Mazda 3 with 7,000 miles and a lingering new-car smell. It's now approaching 10 years old, has 114,000 miles on it, and (I'll probably regret saying this part) hasn't caused me much trouble. Barring any catastrophes, I'll keep it for another year or two.
If you have a credit score above 700, I would think you'd be able to get or refinance your loan to <3% interest. Having some DIY experience would do you some good when buying a used car. Most cars should be able to go 60K-100K before anything major needs to replaced. For instance, you should change the engine oil and filter every 5K-10K miles, air filters every 20K, spark plugs every 60K-100K, brake pads and rotors as needed, and coolant and transmission fluid every 60K or so. After 100K, you might want to inspect the CV boots, ball joints, control arms, wheel bearings, and any bushings and replace as needed.
I typically do the research on model-specific car forums and buy the recommend shop manual before I buy the car. Then I look for a 4 year old car with about 80K miles at about 60% off the original purchase price. This has worked beautifully when I bought my 01 VW Golf TDI and my wife's 07 Lexus Rx400h. Both cars have been problem-free, rarely sees the mechanic, and have a combined mileage of 400K miles between the two of them.
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