I’m stuck with a real lemon at the moment that I’ve been driving for about 2 years. In the last 6 months I’ve put in about 400 dollars in repairs in the last 6 months and now I’ve discovered I need a new radiator.
I’m planning on getting a new one because I’m starting to think that long term I’ll save more money without having to spend all this $$ on repairs.
My mums accountant has suggested I buy a new car rather than a used one as I don’t need to worry about another lemon (did I mention I know squat about car problems?) and it’ll still have some value when I eventually resell it.
My girlfriend thinks this is dumb and that I should get another second hand car, albiet one that’s 2-3 years old rather than 20.
Keeping in mind that I know nothing about cars, am looking to spend about $10,000 AUD either way and only want a car that’s automatic, reliable, and fuel efficient which is the better way to go? And what kind of car would be a good idea to get?
I just read a couple articles today about buying cars. This article’s most persuasive argument for used cars is that a new car depreciates 10%-15% just driving it off of the lot. If this is true, I would just as rather buy a car a year or two older.
If your priorities are geared towards reliability you can get nice used cars, with plenty bells and whistles, paying less than for new. If you get a year end model around August or so then you can still have an “esteem car” and keep a bit in your pocket for gas.
This section on financial planning has some good articles. Just search for “buying cars” in the section search.
I, myself, am dying for an older model El Camino. My mom thinks they are tacky. But then she likes the PT Cruiser.
Depends on how long you plan to keep the car. Keep in mind that cars built in the last 10 years or so (US doper so thinking of one’s like Dodge and Chevy) are all very well built nowadays. Unless you’re looking at “entry level” models, they all are very reliable. New or used.
FWIW, I’m basing this on models like the Dodge Stratus or Chevy Malibu. Reliable and an '01 is very similar to an '05.
A long-held rule of thumb is if you plan to keep the car 5 years or longer, new is a reasonable option. You lose a bunch of equity in depreciation the first year, but it evens out by year 5 so you don’t really lose any value. If you plan to keep the car for only 2 or 3 years, buy used. The biggest depreciation is taken care of, so you’re not paying for the loss in equity. (I hope this is making sense, I’m reverting to my car salesman days, though being honest here)
Depending on the make and model you choose, used will get you the same reliability and performance of new, with a lower price tag.
I’ll end it there, with follow ups on anything people point out I missed. For now, I’d say used is a great option based on your current situation.
If you don’t care about looking cool, I would also suggest looking at a Volvo or a Ford Crown Victoria (the car that is used for taxis and police cruisers–so you know it’s got enough room and is going to keep going forever.)
I’m also a poor uni student so I’m looking at something smaller anyway: something that won’t cost an arm and a leg in gas. It’s up to 1.15ish a litre some weeks!
When buying a used car, the big unknown risk factor you’re taking versus buying new isn’t the out-of-the-factory quality; you have the same risk of a fundamental defect in either case, unless the newer cars are all coming out of a new factory with measurably better workers or something. What you should be worried about is the “invisible” risk of the used car’s maintenance and use history.
Was the engine broken in properly, was the oil changed frequently enough or the right grade used, was the transmission beat on with lots of hard aggressive driving, has the electrical stuff such as the power windows been used a lot? This is the stuff that breaks down with use that may not correlate with mileage on the car.
In this light former police cars and taxis would make the worst choices for a used car, unless you’re looking for a discount on a car you don’t plan to use for more than a few years.
Of course I don’t think Sage Rat was actually suggesting you buy a used taxi, just pointing out that cars like the Crown Victoria seem to have a good track record for reliability and abuse-taking. Fair enough, but be sure you find out if the previous owner has already used up the equity on that account before you buy a used one!
Find a 24 month lease return from a reputable dealership. You still get a year’s warranty, and the first owner took the big hit in depreciation. I’ll second the sentiment that just about ANY car you buy today will be dependable. I’ll also second that Japanese cars can be dead nuts reliable for much longer that you’ll care to own 'em.
I think buying used, you’ll be able to get more car for your money, as it were. For example, you could buy a used Accord (a more upscale model) for about the same chunk of change you’ll need to buy a new Civic (the more basic, economy model). (Feel free to substitute different brands and makes, but the argument holds.)
Personally I agree with your girlfriend, that a 2-3 year old car makes the most sense financially. At 2 years nearly all cars are still under warranty (though 3 years is the base level, here in the US some brands have 5 and 7 year “bumper-to-bumper” (all-inclusive) warranties as their standard). Usually “Powertrain” warranties – which cover the engine and transmission – extend even longer than the bumper-to-bumper coverage.
I would suggest that you take any used car to a trusted and independent mechanic for a mechanical inspection before putting money down (ask your friends, professors, etc. if you don’t have a trusted mechanic). In the US, this would cost about $100, peanuts compared to the total cost of the car.
Yes. One of the reasons I am so awed by the Crown Vic is that I have been in enough taxis that I know that the Engine Light is on by default for them–and yet it runs without a hitch. So good car, BUT DON’T BUY A USED TAXI!
About the only thing I’d add is that, in the past, I took a look at how cars depreciate. At that time (10+ years ago), Japanese cars had a lot faster depreciation over the first 3 years. If this is still the case, you can probably get a late model used Japanese car with less mileage and general wear and tear than an equivalent European model. That, of course, is assuming you want to keep the car. The math gets trickier if you only want to keep it a couple of years.
Now THIS sounds interesting. Could you explain more about what that is? Why does the original owner return the car after 24 months?
I definately want to keep the car – I want something that I can drive around for at least 5 years without doing anything but buying gas, getting it serviced and changing the oil!
Thanks for all the replies, by the way. For some reason I wasn’t getting any e-mail alerts so I thought the thread had sunk and I just had a very pleasant surprise!
There are many reasons a person (or more importantly, a company) would lease a vehicle. They may get easily bored with a vehicle, they may not want to deal with the hassle of offloading a car they OWN when they want a new car (you’re effectively renting a car in a lease). They may want a better car then they could normally afford to buy outright. A company may just need a car for a short period of time and the money spent in a lease can be written of as a business expense.
The two most popular lease periods are 36 and 24 months, there’s also a mileage cap of, roughly, 12,000 miles a year. When that period is up, the end user has the option of buying the car at it’s devalued worth (he/she has already paid the depreciation), or return it to the leasing company for another vehicle.
What ever car you purchase, check the recommended service intervals. As likeley as not, you’ll have a timing belt replacement between 60,000 and 100,000 miles. This is something you must not ignore! You motor has every chance of making it to 150,000 miles or more, but only if you follow the sevice intervals closely.
You’ve spent $400 in repairs in the last six months. What would potential replacement cars equate to for six monthly payments?
If you just want a new car, I get that, but you can nurse a beater along for a fraction of what car payments run.
Fix the radiator and put yourself in a position where you don’t need another car immediatly, then start looking for a great deal…want ads, etc. check bullitin boards at credit unions for repo’s etc.
If buying used, I much prefer to avoid dealers. A private seller can lie to you just as easy, but at least they maybe don’t have as much practice.
Yeah, but I don’t know enough about cars to do that myself, and while I’ve got a great mechanic I’m sick of visiting him. I want something that won’t break down, not something that’s cheap to fix when it does.
The best strategy for you is to find a private party selling a 3-5 year old vehicle. I don’t know what model is the best choice for a young adult in your situation in your country.
Have the vehicle inspected by your mechanic prior to buying the vehicle.
By the time you have to see your mechanic for problems more often than not inbetween 15K service intervals, you’ll be out of college and able to afford another car.
If you use a dealer to handle your trade-ins and purchases, you’ll lose $3000 (if you were in the US world) every time you swap cars.
The thing to avoid with used cars is oil leaks. You want to buy the car that leaks the least underneath after its been test-driven a bit. Be sure to check the oil and trans fluid levels to make sure they’re at the proper levels, and also take a look at the engine and see if it’s showing any leaking; but don’t but the car if the engine has just recently been “scrubbed clean”, because the reason they scrubbed it was that they didn’t want you to see how much it really leaked–and internal engine/transmission leaks are big repairs to make, and are nearly-impossible to conceal. The engine should be dusty the way car engines normally get. Get a car with minimal leaks and it’ll probably be in good shape overall.
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If I was going to get a new car I would look at one that is 2-3 years old. I think those are the best financial deals. People make rash decisions at times when they are in a hurry so Kevbo’s advice to repair the current car and then search for a replacement makes good sense to me. Of course you realize that all cars do break down now and again but Japanese cars seem more reliable overall.
