I got my first car when I was 18. It was used, and I got it for around $900. It broke down on the drive home from the dealer. Needed a whole new rebuilt engine, which was another $1200. Over the course of the next 3 years I estimate I spent at least $1000 more on it, even with the near-constant breakdowns, brake failures, repair work that I had to do, and even just general inconveniences.
I swore that as soon as I had a job out of college, I’d buy a new car and never buy another used car. I got a Jeep Wrangler for about $12,000, drove it 5 years having to make only one repair on it, which was around $300. Plus I traded it in for around $4000 when I got my next new car. So I figure I ended up paying about $1500 a year for that car, and it was worth every bit of it never having to worry about breakdowns or non-scheduled maintenance.
You could say that I wouldn’t have been so soured on used cars if I’d just spent more effort before buying such a lemon with my first one. And you’d be right, but that’s kind of the point – if I buy new, I don’t have to spend time inspecting it and all that. I can just do a little bit of research, say “this is the car I want,” and get exactly the car I want. All the regular maintenance is covered, and it’s completely reliable.
It totally depends on the make of the car. I’d probably buy a used Honda; I’d have less confidence in, say, GM (bad personal experience).
It is a horrible feeling, driving that new car out of the lot knowing you’ll be taking a huge hit on depreciation. But the last two models we bought had new features added the very year we were looking (completely new body style on the Accord, bigger engine in the CR-V) so a used car was less attractive.
As I noted above, I recognize that we all think our own solutions are the best.
You had a used lemon experience SolGrundy, and a good experience with a new car. With your empirical data base, I’d probably be sold on your solution for now, as well.
My sole new buy was a 1981 Monte Carlo that, while not really a lemon. exemplified the terrible product quality reputation that GM both endured and deserved through the late '70s and early '80s. It was a very nice looking car. Navy blue with those big fat Goodyear Eagles on (what did they call’em?) pre-alloy “Rallye” wheels. A discreet burnt orange UT Longhorn in the center backglass and it was all - to borrow from the (early) Beach Boys - “No Go Showboat.”
When it was stolen in 1987 I adopted my still current policy of looking for what I know to be good quality cars at the turning point in their depreciation careers. So, I’ve had good luck with recent used cars and am as sold, with equal reason as you, on my solution.
One way- a car with no miles (or few), plus a full warranty, and most offer 0% financing.
Another way- a car with miles (2002 with 12000 miles), smaller warranty or balance of original warranty, and a financing rate that is higher. (depends upon credit rating)
It depends on what you want. The definition of a good “deal” is…Do I like what I’m driving and like what I pay for it.
The difference in $$$ can be large.
I got a 2002 Ford ZX2 this year, but it was brand new. They were trying to get rid of it, so we got a great deal (almost 10,000 and less than 200 a month). When I graduate college I want a Vette, but there is no way I could pay new car price for that. Just depends on the car and what kind of a deal you can find.
I just bought a new 2003 Ford Escape XLT Sport. I had no intention of buying a new car. I generally subscribe to the theory that the best value in vehicles (if you also value reliability) is to find a used car that’s within a year or so of its warranty running out. That means a 2-3 year old used car. That’s what I intended to buy.
So why buy new? Well, because these days, the car manufacturers are giving away their vehicles essentially below cost, just to keep their factories open.
Consider:
A 2 year old Escape XLT (that’s as far back as they go) goes for about $25-$26 K around here. The new XLT sport had a retail price of $33,495. An 8K difference for the sake of 2 years of wear seems like a fine deal, and normally I wouldn’t have considered a new vehicle.
However, I talked the dealership down to $29,500, with 1.9% financing for 48 months. The best financing I could get on a used one was about 7.5%. So take that 25K, and finance it out for four years at 7.5%, and you’re at the same price as the new one with its 1.9% financing.
So, buying new in this case was a no-brainer. Actually it was a no-brainer only if I compared the new Escape to a 2 year old one. Instead, I figured I might want to go for a much older car, and buy something like a 1995 Cherokee. Trouble is, I find them very cramped. And other older small SUVs just aren’t very good. And I was sick of driving a minivan, and I needed the utility of a vehicle like that, so a small SUV was what I wanted.
My wife’s car is a 1996 Ford Taurus that we bought in 2000, which is typically how we’d buy vehicles. I plan on keeping it for another two or three years, then selling it and buying a 3 or 4 year old Subaru WRX.
We used to by used cars. In fact, we bought nothing but used cars for decades(!). My husband loves cars and still has several around that he is emotionally attached to, apparently.
After one too many hassles, and coming within 12 hours of having NO usable cars AND being stranded by the roadside, I insisted that since we could now afford it, I was going to buy a new one; if Mr. MLS didn’t want to participate in the process, fine, but I was dammed if I was going to risk being stuck again.
IMO when you have the time to tinker and deal with the inevitable problems, and you are just starting out or for some other reason don’t have much money, a used car is the best thing. Especially if you don’t mind the inconveniences when things go wrong. There is always a reason why people are selling them, and it usually isn’t the real reason that they tell you.
I don’t buy a new car often, now, just when my previously-new one is starting to have more problems than it’s worth either in stress and annoyance or in repair costs. I keep the car as long as I possibly can. My guideline is that if the repairs in a year are starting to add up to as much as a couple of months car payments, it’s time to ditch the thing. Or if the frequency of repairs is starting to negatively impact my ability to get where I need to go when I need to get there.
I’ve never bought a new car or truck and I don’t think I ever will.
Why would I want to buy something that’s going to depreciate in value by thousands of dollars on the drive home from the dealer?
Why would I want to buy something that’s going to depreciate by 40-60% within the first 4 years, according to Consumer Reports?
Buying a new car is probably the worst thing you can possibly do with your money, next to flushing it down the toilet. And it’s even worse if you don’t pay cash, because you end up having to make car payments and paying a bunch of interest on all the borrowed money, all because you couldn’t wait until you could actually afford something before you went out and bought it.
I’ve been driving for 35 years and so far, I’ve owned 3 cars. Total.
All were bought new.
I buy them new and drive them till the wheels fall off. Since I drive cars practically forever, for me it’s worth it to have that full warranty period up front. When I bought my 2nd and 3rd cars, I was also in a job that had me driving about 35,000 miles/year, so reliability for me was a must-have.
I don’t drive that much now, so I could probably get away with buying a used car at this point in my life.
Other driving styles may have different requirements.
Sam Stone is right: now is an excellent time to buy new. Interest rates are low, and there’s a glut of new cars.
Right now, for instance, I couldn’t get a 2-3 year old Honda Accord for enough of a discount to make it worth giving up the security of buying new. (It isn’t going to depreciate any 40% in 4 years.)
You’ve got 3 things going on: (1) how much the car’s price will depreciate in a few years, (2) how much of its value will remain at the end of that time; and (3) the uncertainty factor that always attends buying a used car. If the price descends a lot faster than the value does, then buy used. If they drop pretty much in lockstep, buy new. (This is what seems to happen with Hondas these days.)
Here in Maryland, there’s a fourth factor: the damnable state inspection that adds significant costs to most transactions involving used vehicles. (MD doesn’t have annual car inspections; it only requires you to inspect a car when you buy it or first register it in the state. And then they insist on a major bumper-to-bumper inspection.) So for me and other Marylanders, that tilts the tables toward buying new.