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For some vehicles you may need to go a bit more than two years old. I bought my truck used for $18,000 (about $20K all said and done). The sticker in the glove box said it was $60,000 when new,and some other paperwork said it sold for $55,000. So they got a decent discount. Still I would never pay that much for a car regardless of affordability. It is just ridiculous to me. At 5 years old with 70K miles, the tuck still had more than half of its life left, but was less than half the cost when new. At 8 years old and with 160,000 miles, it still has quite a bit left and still has some value left. (sell for $12K - $15K now, it appears).
I bought it below its market price (they hold their value pretty well compared to some other vehicles), but with use cars, you have the opportunity to find an amazing bargain. Not with new cars. You are not going to find a new one being sold out of bankruptcy or the close out auction of a failed company.
Last edited by Coldjensens; 10-30-2017 at 11:41 AM..
My current car was purchased used after a 3-year lease. The car was 3 years old, had less than 15K miles on it, and I bought it for 40% off the original MSRP sticker. THAT'S why I buy used.
I am in the same boat as you. I bought a 3 year lease return that had only 22,000 miles on it for less than 50% of the original sticker price. Car was issued the CPO label, meaning extended warranty after original expires in late 2018. What was the car? A 2014 Mercedes Benz E350 4Matic, nearly fully loaded.
This purchase came about when I decided it was time for my 44 year old butt to retire my beloved VW GTI days. Love the car, but just too sporty for a 60 mile daily commute. Went to replace it with a new Toureg that was being heavily discounted down to $52k. Turned out that my GTI (2 years old, 33k miles) was worth 50% of the price I paid for it, which was a discounted below-msrp Costco price to begin with. No damage, no mods, just adult driven, fully loaded, claybar detailed, garaged, etc. I told the guys that I wasn't going to give the car away. They showed me why it had fallen so fast, and I believe them. Basically the subprime lending world is in the automotive realm now, meaning new cars for everyone.
Long story short - for less than the price of one new, I now have two used. One used by me from mile 1, and the other a low mileage lease turn in for 47% of original purchase. For roughly 10% less than the one new, I can spread the mileage out between two (meaning I can keep them longer), and when I get bored driving one, I can drive the other for a while. Two totally different driving experiences, as one is a highway cruiser and the other is a back roads pocket rocket.
I look at this as a general thing. Most cars are built to last, easily, to 200k miles. A great deal of people, especially those who buy brand new, keep their car until it reaches 100k, and they trade in. If they're driving an average of 15,000 miles per year, then they would have kept this car for about 7 years. By that point, the car will have taken the bulk hit of its depreciation, and now you have a car that's a third of its new sticker price.
This seems to be the new sweet spot for used vehicles. People don't trust that a 100k mile vehicle can last another 100k miles, and I can sort of understand. A lot can happen within a 100k miles, but there's a lot of vehicles out there that has been taken well care of for the long haul, and the owner just wanted something new. I've found that with my habits, I get tired of driving the same vehicle more than 7 years, but I don't want car payments. I'm probably going to try my hand at this game and see how it turns out.
I think it depends on what you're buying. We typically buy used.
Our current vehicles:
2012 Ram 2500 Crew Cab SLT 4wd diesel
New (window sticker) - $56,628
Bought used with 53k miles 2 years ago - $40,000
Current NADA value (83k miles) - $36,725
A 2018 model with the same equipment MSRP's at $63,200. If I had bought a new truck on a 5 year loan at 3% interest, I would still owe around $39k today on a truck worth about $36k. Because I bought used I owe less than $14k on the truck today and it is every bit as reliable as a brand new one.
For me, not running DEF fluid was a requirement and 2012 was the last year that allowed that. Body and interior changes were very minimal, so I really didn't lose anything by not buying brand new.
2014 Ford Expedition EL Limited
New (window sticker) - $58,855
Bought used with 32k miles as a CPO 2 years ago - $38,414
Current NADA value (75k miles) - $31,725
A 2018 model with the same equipment MSRP's at over $73k.
If I had bought a new Expedition on a 5 year loan at 3% interest, I would still owe around $38k today on a vehicle worth about $31k. Because I bought used I owe less than $16k on the truck today and it is every bit as reliable as a brand new one.
On this one, we wanted the 5.4L V8. 2014 was the newest model that still had a V8 at the time we were in the market. Styling hasn't changed between 14-17 so we didn't lose out on any new "features" by buying used.
Since we bought used, we avoided the larger depreciation hit.
MSRP is meaningless though. Margin shrinks significantly when you see that you can get around $10k off both of those. Possibly more back in 11/12 when the truck market wasn't as insane as it is now.
It's all dependent on the vehicle of course. There are high demand with high reliability vehicles selling within hundreds of dollars of new when 2-3 years old. Makes no sense to buy used at that point.
MSRP is meaningless though. Margin shrinks significantly when you see that you can get around $10k off both of those. Possibly more back in 11/12 when the truck market wasn't as insane as it is now.
It's all dependent on the vehicle of course. There are high demand with high reliability vehicles selling within hundreds of dollars of new when 2-3 years old. Makes no sense to buy used at that point.
Definitely dependent on the vehicle. A diesel doesn't lose value at the same rate as a gas burner. To note, you'll also pay much closer to MSRP on a new diesel truck than a gas burner. They're in a much different category. That being said, it didn't make much financial sense to buy the Expedition new either considering all we would have gotten for the extra money was an extra 30kish miles out of it. It hardly made up for it. Neither scenario would have made much of a difference even if we got $10k off MSRP.
I think it depends on what you're buying. We typically buy used.
Our current vehicles:
2012 Ram 2500 Crew Cab SLT 4wd diesel
New (window sticker) - $56,628
Bought used with 53k miles 2 years ago - $40,000
Current NADA value (83k miles) - $36,725
A 2018 model with the same equipment MSRP's at $63,200. If I had bought a new truck on a 5 year loan at 3% interest, I would still owe around $39k today on a truck worth about $36k. Because I bought used I owe less than $14k on the truck today and it is every bit as reliable as a brand new one.
For me, not running DEF fluid was a requirement and 2012 was the last year that allowed that. Body and interior changes were very minimal, so I really didn't lose anything by not buying brand new.
2014 Ford Expedition EL Limited
New (window sticker) - $58,855
Bought used with 32k miles as a CPO 2 years ago - $38,414
Current NADA value (75k miles) - $31,725
A 2018 model with the same equipment MSRP's at over $73k.
If I had bought a new Expedition on a 5 year loan at 3% interest, I would still owe around $38k today on a vehicle worth about $31k. Because I bought used I owe less than $16k on the truck today and it is every bit as reliable as a brand new one.
On this one, we wanted the 5.4L V8. 2014 was the newest model that still had a V8 at the time we were in the market. Styling hasn't changed between 14-17 so we didn't lose out on any new "features" by buying used.
Since we bought used, we avoided the larger depreciation hit.
Good synopsis except nobody pays sticker for Rams or Fords and most folks struggle to get NADA value for used cars with big miles.
Used is still the way to go. The classic saying, that a car loses 20% of its value once you drive it off the lot, still holds.
Not true if you look at some of threads posted already......
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