Buying a car--new or used??

[Harriet Vane]

We are moving to a city without public transportation and will need to buy a second car for dh to take to work. We had assumed we should buy used, but are now pondering whether or not to buy new. A friend of mine who recently bought a car says that a good used car isn't that much cheaper than a new car, so spend a little more on the new car.

 

We will likely have to buy a new minivan in 1-3 years. Ours runs well but it's old.

 

It's been a loooooooong time since we bought a car. Advice?

[Ottakee]

Can you buy outright or would you need to finance? Do you plan on keeping the car long term---like 10 years or more or selling sooner?

 

I have always heard the general rule was that if you plan to keep the car for at least 10 years and can get very cheap financing or don't need it, then new is good to consider. Otherwise a car that is 1-2 years old is generally a good bet for a long term reliable car.

 

Dave Ramsey would say to buy the best car you can without financing.

[Melissa in NC]

I am looking at buying a car in the next year. Recently I read an artice by a car review writer who recommended getting a car that was 4-5 years old and had less than 50,000 miles on it. I do not remember all the reasons for this but it did include the improvement of the lifetime of more recent cars and depreciation. I wished I bookmarked the page but I did not.

 

HTH

[Murmer]

My dh just got a new car with 0% financing....a used car would have had 8% financing...so in the long run the new car was cheaper than a used car for him right now. So really look around at financing if that is something you need to do you might find a new car with financing is cheaper than a used car.

[mom2att]

I guess it depends on what "new" and "used" means to you. To me a new car is whatever is not as old as the car I am driving. We have always bought used and save a lot of money. But to some people, new means exclusively that you are the first owner ever, and used means the car is only a couple of years old. Those people don't see driving a used car as much of a savings, because while a car does depreciate significantly as soon as you drive it off the lot, it's a few years later that the difference really shows. Especially when you can get more car for your money when it comes to bells and whistles.

 

Our current car is a 2003. We bought it in 2008. At five years old it was the newest car we'd ever owned. When it was new it sold for around $40K, with way more features than we would ever consider paying for. We bought it for 1/4 of that price and guess what--all of those expensive features were still there. Five years later we've put close to 100K miles on the car, it still runs great, and those expensive (for somebody else) bells and whistles are going strong as well. So for me, buying used is the way to go. YMMV (pun intended!).

[Alice]

We usually buy a car that is about one year old. We’ve found the price difference to be fairly huge just to have it not be “new†but it is still in very good condition. We’ve also had good luck with getting cars that are about one year old but that have high mileage for that one year, it makes the price lower but the overall mileage is still low. Usually they have been driven by business people who trade up every year. Our mini-van was a dealer’s test car for a year so it had higher mileage than you would expect but was in excellent condition. We don’t ever do financing so that isn’t a factor for us.

[Pawz4me]

We almost always buy new. I agree it depends on how long you plan on keeping the vehicle, and how much mileage you plan on putting on it. And also what manufacturer you go with. We're huge Honda fans. They hold their resale value very, very well. Low mileage used Hondas are fairly difficult to find, and they're often not much less than a brand new one. Vehicles made by some other manufacturers depreciate much more rapidly, meaning used cars of that manufacturer can be found for considerably less than a new vehicle.

[gardenmom5]

we're done buying new. I refuse to pay for the priviledge of driving it off the lot (cars depreciate ALOT by that one act.). even a car that is only a couple years old, will be a huge discount over new.

 

know what you want, do your background and go shop. we've had very good luck buying used, buy good cars with low miles that are well taken care of. we put around 10K miles on a car per year, so we can easily get as many as ten years out of a used car.

[Jennifer3141]

We always buy new but keep them FOREVER. I have a new SUV and a 13 year old Ford Focus with 235,000 miles. I'm not a big fan of the idea of inheriting someone else's problems. But only buy when you've got a 0% interest deal!!!

[Erin]

Personally, I would never buy a brand new car. That's just pouring money down a hole.

Now, there are a lot of ways people pour money down holes (ask me about my unrideable horses :glare: ), so if that's where you want to pour yours I'm sure not going to judge. ;)

 

But, if this is about the economics of the thing, then you want to find something in the 2-4 year old range. The fastest depreciation has already occurred, for the most part, but it's still a nearly-new vehicle. Even 0% won't make a difference when stacked against a car that is upside-down in value after the first six months.

[mamajag]

I bought a 2010 Grand Marquis with 21,000 miles on it almost 2 years ago. On the surface, we got a great deal. However, just outside the warranty we started having electrical problems. We just traded it in for a 2013 Honda Odyssey. We were afraid of the repair costs and the dealer couldn't replicate the problems. We took almost nothing in depreciation because it's a Honda and they are in such high demand.

 

I don't see myself buying another car used because we lost almost 3k on that deal when we traded it. It didn't hold its value well enough, and I think the dealer had a glitch on their test drive though they wouldn't admit to it. Be careful if you're buying used to avoid depreciation...

[Erin]

We took almost nothing in depreciation because it's a Honda and they are in such high demand.

I think I'm missing something here. This isn't making sense...

How can a brand new car, that you just bought, have any depreciation??

[gardenmom5]

I think I'm missing something here. This isn't making sense... [/size][/font][/color]

How can a brand new car, that you just bought, have any depreciation??

 

depreciation is the difference between what you paid for something, and what you can now sell that item for. people who want a new car - will not buy a one-day old car from you unless it is thousands less than the dealer price. they want the cachet of getting it from the dealer. people who are prepared to buy a used car, won't pay anything near a new-car price, even if it is only a day-old.

 

and yes, there are people who buy new and bite off more than they can chew and then try to sell and can't get anywhere near what they have on their loan. (we've met some.)

 

 

and we've had cars that we bought used, and sold for as much as we bought it for even after driving them for a few years. that's zero depreciation.

[Erin]

depreciation is the difference between what you paid for something, and what you can now sell that item for.

Precisely.

So how can one "take nothing on depreciation" on a just-purchased 2013?

[AngieW in Texas]

We buy new, but drive the cars into the ground, typically keeping them for about 15 years.

 

After the thousands we spent on repairs for the van during its last two years, I was more than ready for a new car with a nice warranty. My Hyundai has a really nice warranty.

https://www.hyundaiusa.com/assurance/america-best-warranty.aspx

 

Fortunately, our van that we finally disposed of back in October had its first major repair issue just 500 miles before the warranty ran out. That was great because they had to completely rebuild the a/c system. Unfortunately, we ended up having to completely rebuild it again about every 4 years after that. You can't roll windows down in a van and the heat in Texas is just too much to do without a/c in a van.

[gardenmom5]

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Precisely.

So how can one "take nothing on depreciation" on a just-purchased 2013?

 

who are you, an owner, going to sell a 2013 model car to?

[Erin]

Uh huh...I'm wondering the same thing.

And that's why I asked for clarification of mamajag's comment. lol

[msjones]

We buy used. Four years ago we spent $4700 on a used Volvo, put about $2,000 into it to get it up to snuff, and it's been a great car!

 

I have never once wished we paid for a brand new Volvo instead.

 

No car payments. No repairs after the initial repairs. We just pay for occasional maintenance.

[Wildcat]

. 

 

[Catwoman]

Personally, I think you should either buy new, or else a certified pre-owned vehicle from a new car dealership (and also buy the extended manufacturer's warranty.) If you get a low-mileage CPO vehicle and the extended warranty covers everything, it's almost like getting a new car, but you're paying much less for it.

 

I wouldn't buy a car from a private owner or a used car lot.

[msjones]

We pay the seller to allow us to bring the car in for a 'check-up' before we buy it. The mechanic can give an estimate of what work needs to be done to make it a reliable car. I think we paid the seller $50 last time. That way, the needed repairs were no surprise -- we considered them part of the price of the car. We also had the last one detailed for about $200 and the thing looked incredible!

 

It was completely worth it for the amazing deal we got.

[mamajag]

[/size][/font][/color]

Precisely.

So how can one "take nothing on depreciation" on a just-purchased 2013?

 

 

It's simple actually. According to KBB.com, my Odyssey has a trade in value that's the roughly the same as I paid for it. I haven't lost any value driving it off the lot if I were to trade it in today.

 

People look up this stuff all the time to see how well their vehicles retain their value. Honda is really good about holding its value, which was part of the reason I bought the Odyssey.

[PinkInTheBlue]

I bought new once and it took that to teach me I'll never do it again. I save a minimum of $12,000 by buying a car that's less than a year old. I still get the great new car warranties and everything else. I'm just not ever going to take that financial hit for bring the first to drive if off the lot again. :)

[Erin]

According to KBB.com, my Odyssey has a trade in value that's the roughly the same as I paid for it.

Well I should HOPE a 2013 that you "just bought" hasn't depreciated much!

(Though personally, I'd be torqued at the idea that it has depreciated at all, at this point, but that's just me. As mentioned, new cars are a place where I don't blow my money.)

[peachskittles]

I have always bought used vehicles. I love my used vehicles and this year is the first time for any of my vehicles that I had to make a major repair. Since we have been together for 6 1/2 years and this is the first vehicle of...5...that needed a major expense, I think we have done pretty well. I am extremely picky about cars though. I overthink every purchase but I've gotten a good idea of what I would trust used and I what I wouldn't touch with a 10 foot pole. This year I bought my newest vehicle ever, a 2008 Smart Fortwo Passion. It is an awesome little car and exactly what we need for my SO to get back and forth to work. It hasn't been our year for vehicles BUT the problems that happened (an accident in my awesome Ford Windstar and a random freak fire in my VW Beetle) were not because my cars were older. If something (knocking on wood) would happen to either my van or car this year, I would again buy used. My friend bought a brand new vehicle recently (although I wonder how she managed to do that). She has had nothing but problems with it. The sound of the words "new car" or "first owner" sound nice but I don't think they are the perks that people make them out to be.

[NicksMama-Zack's Mama Too]

Considering that I went 21 years between buying my first new car and my last new car, (both Hondas), I say buy new and run the wheels off them. I bought my Pilot at the end of model year clearance and paid way under MSRP with great financing ($400 interest over 5 years).

 

2-4 year old low-mileage Hondas for reasonable money are like unicorns. If you find one, it's probably been wrecked.

[TrixieB]

A friend of mine who recently bought a car says that a good used car isn't that much cheaper than a new car, so spend a little more on the new car.

Depending on the car you're looking for, you may see this. Last summer we were looking for a couple of years old high MPG car. Dh found very few cars that were much of a discount over buying new; the "affordable" cars had salvage titles or super high mileage. The situation may have changed in the last year, but at that time people were hanging onto their cars so the used car market (for the type of car we were looking for) was very slim and not the typical pricing situation. So we bought new, first time ever for either of us. Assuming that the car lasts like our previous ones, we'll own it for 10+ years.

[Parrothead]

I can't buy a used car without it being rather a burden. So we generally buy new vehicles from Asian countries and drive them until the wheels fall off.

[GWOB]

Personally, I think you should either buy new, or else a certified pre-owned vehicle from a new car dealership (and also buy the extended manufacturer's warranty.) If you get a low-mileage CPO vehicle and the extended warranty covers everything, it's almost like getting a new car, but you're paying much less for it.

 

I wouldn't buy a car from a private owner or a used car lot.

 

 

This is exactly what we did. In 2011 we bought a certified per-owned 2009 Honda Pilot. We also purchased the extended warranty. We got a whole lot more car than we would have buying brand new. We've put almost 50,000 miles on this car in 2 years. I am about to take it in to the dealer to fix a few small problems, all covered under the extended warranty. Because we got such a good deal, we just paid off the car. CPO cars are definitely an excellent option.

 

We have purchased a brand new car before. Due to our experience with that car (a 2005 Ford Freestyle), I will never buy new again. We had more problems with that car than with our 13yo Jeep.

 

I will say, right now you can purchase a new Honda or Toyota with 0% financing. I would consider buying one of those brands new. Other than that, we will buy CPO cars in the future.

[Mom in High Heels]

We've bought two used cars over the course of our marriage, and decided we prefer new. I just don't like the thought of buying what could have been someone else's problem, even if it has a warranty.

 

Fortunately, for us, I purchased the extended warranty on one of them and 3 weeks after it kicked in, the entire transmission system went out and had to be completely replaced. It would have cost us $10,000 in repairs, but I had to pay only the $100 deductible. Yay. Once it was repaired, I traded it (to the dealer that repaired it) for a newer version of the same car. Even though the car was repaired, I was uncomfortable driving it, afraid that something would go wrong. The car I traded it for I'm actually trading in on Mon for a new car. It's out of warranty (and you can't buy the extended warranty here in Europe-even though it's a European car!) and I want something slightly better on mpg (it's an SUV).

 

JB's car was bought new in 2007 and is out of warranty, but only has 24,000 miles on it, as he's walked to work for the past 5 years and been deployed for a year. We'll be keeping it for a while. It's a VW Passat and I LOVE it. It's so fast. Of course that won't be good when we get back to the States and no longer have the autobahns to zip around on. :(

[Barb_]

People are driving their cars longer than they used to due to the economic downturn. Also baby boomers are beginning to hit retirement age so they aren't turning their cars over every 3-5 years either. Depending on your location, you may find a good deal on a gently used car (try Carmax, possibly), but it will take a lot more legwork and patience than it used to. A new car usually has more included extra features for the price, better safety features, and better financing/cash incentives that will considerably narrow the price between new and gently used.

 

That said, we just bought a second car for my husband to use when he was transferred from the city to the suburbs. We had cash so we didn't need to take financing into consideration. We got a 2012 Ford Focus from Carmax with a sunroof and upgraded sound system/GPS and hatch (adds 1k to the price) with only 8k miles on it for under 16k. I don't remember the price, but it was just under 18k with TTL included. I noticed the Focuses tend to slip in price a little more than a lot of other models because rental car companies and company leasors heavily utilize that model. There seem to be more gently used ones on the market. Rental car companies often resell their vehicles as soon as the new model year comes out.

[Lizzie in Ma]

If I were a millionaire I would still buy used cars. I like solid steel around me and engines without computer chips so I can fix them.

[JFSinIL]

We have always had good luck getting used cars that are only 2 - 3 years old and that have been owned previously by a rental agency. Low mileage, still under warranty, and the maintenance was kept up.

[Shellers]

We always buy new, with one exception, an old Jeep which we bought used.

 

Yesterday, I traded in my gas guzzling 10 mpg Tundra for a VW Passat TDi. I got 39.6 mpg on the way home. I am thrilled!

[lailasmum]

We always buy ancient cars but if I had more money to spend on them I think I'd go down the 2-3 year old car route. I think the only time I would buy a new car would be if it was some new amazing piece of technology that was likely to only be available new.

[Erin]

If I were a millionaire I would still buy used cars. I like solid steel around me and engines without computer chips so I can fix them.

 

Me too!

People always talk about the nickel and diming of used cars, not stopping to count how many nickels and dimes are actually IN the thousands of dollars of difference between new and used.

Even with repairs, you're still money ahead.

 

But like I said, if you want to throw your money down this particular hole, more power to you. Everyone has the right to blow their money as they want! And a lot of people like to drive new cars. Which is good, because then I can pick up their used one. ;)

 

I am extremely picky about cars though. I overthink every purchase but I've gotten a good idea of what I would trust used and I what I wouldn't touch with a 10 foot pole.

Again, me too.

I research for months before we ever buy. I read owner reviews, depreciations, car mag. reviews, price out common repairs, etc.

That's why we have two, 10 year old Foci, at the moment. One we just got, so no comments, yet. The other we've put 135,000 miles on in the last 6 years.

We've put on tires, changed the oil and replaced a fan. That's it. :) $6,000 well spent.

[Wildcat]

.

[elegantlion]

We always buy used, way used. We prefer the safety of no payment. My house costs less than some new cars. If budget and financing weren't an issue/hassle, I'd probably buy 2-3 years old from a dealer. I do a lot of research on used models before we shop, random repairs usually get budgeted in. Insurance and property tax are cheaper on used too.

[dirty ethel rackham]

I guess it would depend on whether or not you need to finance a car. While I agree that you should buy the newest car you can afford paying cash, if you have to finance a car, new may be cheaper in the long run. Financing on newer cars is often SOOO much cheaper than on used cars.

 

We needed to buy a car about 18 months ago due to an accident that totaled our other car. While I would have preferred to buy a smaller car and paid cash, our van was not great on trips anymore and we needed a bigger car for family trips with a large dog, moving a kid to college, etc. That meant we needed to finance a car rather than pay cash. We had planned on buying used and found the Honda Pilot we wanted at Carmax. However, when we went to look at a comparable used car at the Honda dealership, it turned out to be salvage, so we started walking out, knowing we had another car. Well, the Honda salesman knew that a sale was a sale, so he was able to get us a new Pilot for about the same price as the used one were going to buy. It will end up costing us less over the life of the loan due to the better financing offers. Sometimes, you can buy a previous year model off the lot with new car financing and get a good deal.

[mamajag]

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Well I should HOPE a 2013 that you "just bought" hasn't depreciated much!

(Though personally, I'd be torqued at the idea that it has depreciated at all, at this point, but that's just me. As mentioned, new cars are a place where I don't blow my money.)

 

I lost more on my "smart" gently used car, and that upset me because usually that's the smart move. :( Most new cars lose several thousand for setting tire off of the lot, so it's not bad at all. I can understand not wanting to buy new. We did the gently used twice. The first time with the truck we had fuel leaks, transmission failure, and something in the wheel. Luckily those were within the warranty period but were still a pain. The second was the Marquis, and electrical failures and them having to get Ford corporate to get my door's security code because the brain wouldn't give it up correctly started to scare us so we got rid of it. We couldn't get an extended warranty on it or we'd have done that. We're planning on an 8 year, 120k warranty on the Odyssey but didn't want to pay what our dealer wanted for it. We can get it cheaper online through another Honda dealer.