Quartz, I’ve got to repeat my query: If new cars are such a bad deal, I think people over the last 50 years or so would have “wised up” to that fact and the market would have responded so that buying used would not be so preferable. Maybe in certain instances, such as buying a new luxury car where the prestige value would be enhanced by newness, would people be willing to pay such a premium. But not across the board.
I actually like the fact that you mention the Aveo rather than something like the Fit and the Yaris!
(Point taken, by the way :))
Man, talk to my county tax assessor. He thinks it’s worth nearly $10,000. A '98 Pathfinder!
Here is a timely article addressing this.
Personally, I keep a car until it has a big break down. Because I’m single and my commute is nearly an hour’s drive away, a need a reliable car. Once a car breaks down once, I no longer trust it.
My current car has 163K on it and I am expecting to keep it another 2 years - right around the 200K mark. That will make it 12 years old. At that time I will buy a new one. Hopefully by then we will have some cars that do well on gas economy.
I think you are wrong on this Aeschines. I find it hard to believe that new cars make economic sense except in extreme cases. And i don’t find it at all hard to believe that people have not ‘wised up’. I doubt most people buying new cars do it for economic sense, i always understood the most cost effective way was to drive it to the grave.
People spend silly money on all sorts of things that have nothing to do with ‘value’ in any real terms. Does it make ecomic sense to drop $6000 on that new fitted kitchen? Is it more economical than your old one? Etc etc.
People buy new cars because they want a new car, simple as that. People attach huge value to things like comfort, reliability etc. It’s not necessarily wrong to do so, but if you want to just look at hard economics most of these ‘assets’ can’t be counted.
ETA - Nobody has mentioned environmental cost btw. As a general rule it’s almost certainly more eco-friendly to repair an old car.
It’s not costing you a nickel if you don’t actually sell it for $5000.
Used cars depreciate too. Yes, not as fast, but* all that matters is how much you get* when you finally sell it/trade it in.
You would think so wouldn’t you? However important economics is, that’s only a small part of the reason people buy cars.
The main criterion for buying a cars seems to be, “Can I make the payments?”
Heck, for some people I know even THAT doesn’t factor into the equation.
I think what matters is the delta between the cost and what you get when you trade it in. I’d rather buy a used car for $15K and trade it in 5 years later for $2k then a new car for $20 k, trading in 6 years later for $2K. That’s $18K / 6 or $k a year vs. $13K / 5 or $2.6K a year. Click and Clack have a booklet showing it almost always makes sense to buy used.
My car is 10 years old and 114K miles, and is working great. There are other factors. I’ve got a great mechanic in walking distance who I trust, and we’ve got a spare car, so the car being in the shop is not a big issue. My daughter’s boyfriend has an older version of the same car at 180K, which is running fine despite having gone through about 5 years of inadequate maintenance. I also want to wait for 2 years until my kid is out of college - then I can accumulate enough to pay cash unless I get a really good deal. Finally, I’m waiting for hybrids to keep coming down the price curve - it’s already better than it was a few years ago.
I’m also not car proud. I’d much rather have the money than a brand new Lexus, thanks.
That kind of brings up a good point. The finer, fancier cars are targeted at people that have sufficient income that there’s not much of a question of preferring to have the money; it’s disposable income. They’re not trying to decide between a brand new Aveo versus a two year old Focus. It’s more like the decision between a new Lexus or a new Infiniti. Of course there are still fools who are (as you say) “car proud” and bury themselves upside down for the cachet of a new Cadillac Escalade. (Then there are people that spend the money initially for a powerful, good looking, nice performing, long lasting car despite the cachet that one should be a balding man with a hat.)