I bought a new car this summer - with some advice from dopers - and it was so much fun that we’re thinking of buying another car soon. This time we’re thinking of buying a used car, but it seems like used cars are vastly overpriced compared to new cars.
For example I got an email from a dealer today who is selling a 2007 Honda CR-V with 75,000 miles on it for over $17,000. The same email lists a new 2012 Honda CR-V - same model - for about $25,000.
So, if I pay 68% of the price of a new car I can get a 5 year old car with 75,000 miles on it??? Sounds like much too much money. I seem to remember that back in the day a new car lost one third of its value as soon as you drove it off the lot. Am I misremembering? Am I missing something?
While we’re at it, is there some kind of an index out there which tells us whether this is a good time for a used car purchase or a bad time?
Used-car prices are crazy right now. Part of it is “Cash for Clunkers” taking old cars off the road, part of it is the downturn depressing new car sales for the past few years and reducing supply.
You can often get better financing terms on new cars, and it’s easier to get the price down because the pricing is more transparent. Go to a site like truecar.com for pricing information, negotiate with the dealer by email and you should be able to buy at invoice minus incentives. Few if any cars will lose 30% of their value “the day you drive it off the lot.”
Part of it may just be that the used CR-V is overpriced, though. Do some checking to see what it’s really worth and then compare that price to the invoice new.
FWIW, the Nito family bought two cars in the first half of 2010: a new 2010 Outback (paid invoice, with 2.9% financing) and a certified 2006 Acura TSX (paid a little more than half the new price, similar age and mileage to your 2007 CR-V). So I’ve done it both ways pretty recently.
I don’t think it was ever like that, but then again most people who aren’t car dealers don’t really know how much cars cost.
A car can have lots of prices, there’s MSRP, actual transaction price when new, wholesale used and retail used. If you bought a car new, the difference between what you would get for it on a trade to a dealer(wholesale used) might be quite a bit less than the MSRP. The retail consumer doesn’t always have a good idea of what these different prices are.