To buy a new car or not.

[BehindBlueI's]

I always assume private sale used price

Why would you assume that in a thread where the OP is asking if he should buy a new car?

2012 Ford Explorer XLT, $22,997 - Cars.com
only 51,000 miles. Easy.

Tons of used vehicles out there, much better value than buying new.

Yup. Head on over to PA and pick it up. Save $8750, and if you drive 10k a year, need a new car 5 years earlier.

Over 30 years:

Used car every 5 years: About $138k. New car every 10 years: About $99k.

Alternately, if total cash outlay is the only thing that's important, buy a bicycle and a bus pass. Save $22,697 over the used Explorer.

1) Nobody is arguing you can't save money buying a used car.
2) The idea of buying a 3 year old car with average miles in like new condition vs buying a new car isn't as financially savvy as it was pre-Great Recession, particularly in the truck/SUV market. Gas prices drove manufacturers to lower prices and offer rebates to keep them moving off the lots, people with less disposable income became more price fixated, used car market in this segment went up.
3) Averages are irrelevant to the specific car in question. Grab a pencil and paper and work the math out for yourself.
4) Financial impact is also changed dramatically by length of ownership. If you only keep cars short term, depreciation is more of a concern. There's a lot more difference between a 2 year old car vs a 5 year old car then there is between a 10 year old car vs a 13 year old car isn't nearly as pronounced.

 

[vitamink]

This is just me, but I never buy someone else's problem.

 

[CampingJosh]

Why would you assume that in a thread where the OP is asking if he should buy a new car?

Because that's what a used car is worth.

You pay a dealer to do something for you that you either can't or won't do for yourself. You can't go straight to the source for a new car, but there is no such restriction on used cars. So on used cars you pay a dealer to find it, make it convenient for you to check out, process paperwork, etc. But that difference in price is paying for the dealer, not paying for the vehicle.

That and dealing with car sales people makes me want to gouge my eyes out. There is no one harder to give money to in all of sales. Even when you bring a certified check or $100 bills for a vehicle you've already agreed on it still takes an hour or more.

 

[cce1302]

Yup. Head on over to PA and pick it up. Save $8750, and if you drive 10k a year, need a new car 5 years earlier.

It's only about 100 miles away from where I live right now, but I'm not interested in a ford. I've had my current (purchased used) car for 10 years, and put about 14,000 miles on it per year.

Over 30 years:

Used car every 5 years: About $138k. New car every 10 years: About $99k.

over 30 years:

Used car ($23k) every 10 years: about $69k New car ($33k) every 13 years: $76k

Alternately, if total cash outlay is the only thing that's important, buy a bicycle and a bus pass. Save $22,697 over the used Explorer.

I see no reason to jump that particular shark, but you look great doing it.

1) Nobody is arguing you can't save money buying a used car.

that's almost exactly what you argued above when you said "Over 30 years: Used car every 5 years: About $138k. New car every 10 years: About $99k."

2) The idea of buying a 3 year old car with average miles in like new condition vs buying a new car isn't as financially savvy as it was pre-Great Recession, particularly in the truck/SUV market. Gas prices drove manufacturers to lower prices and offer rebates to keep them moving off the lots, people with less disposable income became more price fixated, used car market in this segment went up.

Thanks! I'll just tuck that bit of trivia away in case anybody ever asks a relevant question.

3) Averages are irrelevant to the specific car in question. Grab a pencil and paper and work the math out for yourself.

it's easier to do it on my computer. as I posted above.

4) Financial impact is also changed dramatically by length of ownership. If you only keep cars short term, depreciation is more of a concern. There's a lot more difference between a 2 year old car vs a 5 year old car then there is between a 10 year old car vs a 13 year old car isn't nearly as pronounced.

Sure, but $24k depreciation over 13 years is still more than $8k depreciation over 10 years. At least it's significant to me. Perhaps one day $1200/year will be meaningless to me, but for now, it's a pretty decent chunk of change.

 

[williamsburg]

Cars are like guns. Just wait for someone to trade in the one you want and get it at a lower price.

This.

After buying new and seeing the loss, I'll just buy used from now on. Most makers offer a Factory CPO selection on most lots. These are generally the better of the used cars on the lot as they stand behind them with a warranty.

 

[BehindBlueI's]

that's almost exactly what you argued above when you said "Over 30 years: Used car every 5 years: About $138k. New car every 10 years: About $99k."

Nope. Different argument entirely. You can save quite a bit of money buying used cars. You just won't have as nice a car. In the same way you talk about buying a used Lincoln for the same cost as a new Ford. You value the luxury and prestige of the more upscale brand more than you value the new vs used for the same money. You didn't actually save any money, you just got a "nicer" car based on your own preferences. Someone who valued the new car warranty, being the first owner, etc. would believe the Ford is the "nicer" car. The fact you could save a metric butt ton of money by buying a 4 year old Ford Fiesta doesn't enter the equation though. Why? Because you, me, and most folks realize without even thinking about it that the person considering a brand new Taurus Limited vs a used Lincoln MKZ isn't also considering a used Fiesta any more than they are considering a 1994 Lincoln. Again, if cash outlay is the only thing of concern we'd all have bicycles and bus passes. Car shopping isn't about "what's the lowest amount of money I can spend" like shopping for a gasoline or a can of peas.

How often do you keep a car? Not rhetorical, how long do you personally keep a vehicle? Why do you sell? Very few people drive a car until its simply unrealistic to repair and maintain. They buy because it no longer meets their needs/wants and they are bored with their current vehicle.

With those two things in mind, look at the numbers again. If a person wanted to drive the specific vehicle under discussion, which sounds better to you:

(Figure about $4k for a 10 year old average Explorer XLT trade in value per Edmunds)

$91,000 over 30 years. The vehicle you drive will, on average, have 50,000 miles and be 5 years old.
$118,000 over 30 years. The vehicle you drive will, on average, have 75,500 miles and be 7.5 years old.

Obviously a bit oversimplifed, as insurance, license plates, financing costs, sales tax costs, etc. will change the final numbers...but as an apples to apples comparison, which would you choose?

Of course you can save money by going with a used car that has more miles, is older, etc. This is just as obvious as you can save money by going with a more basic car. However if your goal is to stay in a certain subset of miles, age, etc. then within the same vehicle class you can do very well buying new **IF** you have the discipline and the good luck to keep it long term. Get the car totaled in the second year you owned it? New generation of car is just to shiny to resist? Buying new cost you more. Keep it long term, it costs you less in this particular situation. It certainly may not in others.

That's why I said grab a pencil and paper and figure it out for your situation and your desires. It may very well make sense for you to buy used, particularly if you flip cars often and/or are buying a high depreciation vehicle. It may also very well make sense to buy new. My point is, and remains, that the truism of buying a 3 year old car making more financial sense than the same car new does not hold up in everyone's circumstances, and by broadening the frame of the question beyond just deprecation costs into the realm of likely replacement intervals and associated costs, keeping a vehicle in a certain set of "acceptable niceness", etc you will give yourself a better understanding of what's right for you.

 

[Baditude]

There is a lot of good information here. I listened to Dave Ramsey as well. My take: cars, no I would buy one 3 years old. Trucks are completely different. I bought my 2013 Ford F 150 brand new in June 2014, I got all rebates and incentives plus an extra $1,000 off bed liner, bed cover, Ziebart for life and warranty extended to 72 months / 72 K miles. Used 2012 F 150s were about $4,000 less but were not the Lariat package. I hate car payments but had to make the change. If you can get an exceptional deal and pay extra to pay it off in 1/2 the time then I say go for it. If it's going to hurt the budget then no.

 

[lovemachine]

Off topic, but I found a 2013 Jeep Wrangler Unlimited that I'd love to buy

 

[cce1302]

Nope. Different argument entirely. You can save quite a bit of money buying used cars. You just won't have as nice a car. In the same way you talk about buying a used Lincoln for the same cost as a new Ford. You value the luxury and prestige of the more upscale brand more than you value the new vs used for the same money. You didn't actually save any money, you just got a "nicer" car based on your own preferences. Someone who valued the new car warranty, being the first owner, etc. would believe the Ford is the "nicer" car. The fact you could save a metric butt ton of money by buying a 4 year old Ford Fiesta doesn't enter the equation though. Why? Because you, me, and most folks realize without even thinking about it that the person considering a brand new Taurus Limited vs a used Lincoln MKZ isn't also considering a used Fiesta any more than they are considering a 1994 Lincoln. Again, if cash outlay is the only thing of concern we'd all have bicycles and bus passes. Car shopping isn't about "what's the lowest amount of money I can spend" like shopping for a gasoline or a can of peas.

How often do you keep a car? Not rhetorical, how long do you personally keep a vehicle? Why do you sell? Very few people drive a car until its simply unrealistic to repair and maintain. They buy because it no longer meets their needs/wants and they are bored with their current vehicle.

With those two things in mind, look at the numbers again. If a person wanted to drive the specific vehicle under discussion, which sounds better to you:

(Figure about $4k for a 10 year old average Explorer XLT trade in value per Edmunds)

$91,000 over 30 years. The vehicle you drive will, on average, have 50,000 miles and be 5 years old.
$118,000 over 30 years. The vehicle you drive will, on average, have 75,500 miles and be 7.5 years old.

Obviously a bit oversimplifed, as insurance, license plates, financing costs, sales tax costs, etc. will change the final numbers...but as an apples to apples comparison, which would you choose?

Of course you can save money by going with a used car that has more miles, is older, etc. This is just as obvious as you can save money by going with a more basic car. However if your goal is to stay in a certain subset of miles, age, etc. then within the same vehicle class you can do very well buying new **IF** you have the discipline and the good luck to keep it long term. Get the car totaled in the second year you owned it? New generation of car is just to shiny to resist? Buying new cost you more. Keep it long term, it costs you less in this particular situation. It certainly may not in others.

That's why I said grab a pencil and paper and figure it out for your situation and your desires. It may very well make sense for you to buy used, particularly if you flip cars often and/or are buying a high depreciation vehicle. It may also very well make sense to buy new. My point is, and remains, that the truism of buying a 3 year old car making more financial sense than the same car new does not hold up in everyone's circumstances, and by broadening the frame of the question beyond just deprecation costs into the realm of likely replacement intervals and associated costs, keeping a vehicle in a certain set of "acceptable niceness", etc you will give yourself a better understanding of what's right for you.

Based on your repeated asking of questions I have previously answered, I perceive that my attempts to communicate with you have failed.

I see no reason to continue.

Have a great day!

 

[VERT]

Off topic, but I found a 2013 Jeep Wrangler Unlimited that I'd love to buy

I would pass. Buy new. Why do you want someone else's problem?

Otherwise buy a 2003 model. They cost less and have less depreciation.

 

[HoughMade]

I bought 2 cars that had car payments. A 1988 Pontiac 6000 that I financed $3,500 on in 1992, and a 1996 Mercury Sable that I financed about $9,000 on in 1998.

My philosophy was that if I had to make payments, I would get a basic transportation car and pay it off as quickly as possible. The 6000 was paid off in a year, about 2 and a half years for the Sable. I understand that not all people will have the cash to buy outright. I didn't, but if I didn't, no new cars and nothing fancy for me.

I have saved money for cars ever since and haven't had a car payment since 2000. I buy cars that are 1 to 3 years old with low miles and pay cash now. Sure, I could make payments and drive something more expensive.....but why?

 

[lovemachine]

I would pass. Buy new. Why do you want someone else's problem?

Otherwise buy a 2003 model. They cost less and have less depreciation.

I have a 2005 Jeep Wrangler now, I bought it brand new.

 

[VERT]

I have a 2005 Jeep Wrangler now, I bought it brand new.

I will give you $1000. It is fully depreciated right?

 

[Tactically Fat]

For the price of a new Explorer... I'd rather have a new Subaru outback.

The third row in either vehicle will be all but useless to haul anyone/anything other than LITTLE kids. Trust me.

Heck, give me a gently Buick Enclave over a brand new Explorer.

Your money, OP. Your money. As said early on - you're the only one that knows your financial situation.

 

[VERT]

For the price of a new Explorer... I'd rather have a new Subaru outback.

The third row in either vehicle will be all but useless to haul anyone/anything other than LITTLE kids. Trust me.

Heck, give me a gently Buick Enclave over a brand new Explorer.

Your money, OP. Your money. As said early on - you're the only one that knows your financial situation.

The Outbacks are nice. I wanted an Outback but there are no local Subaru dealers. I like to buy local.

I refused to buy the Explorer. It was a really nice ride. But all the electronic dodads on the dash ticked me off. I started yelling at the little voice while trying to set the tempature during the test drive. If I want it warmer or cooler I will reach up and turn the *%^&#$ dial/button. My wife thought it was comical when I basically turned all red faced mad. Don't get me wrong I like technology when it saves me time or makes my life easier. Some of these cars are really getting downright silly with all of gadgets they put in them.

 

[lovemachine]

Technology sucks. One of the best things about my Jeep is the manual locks and roll down windows.

 

[Tactically Fat]

The Outbacks are nice. I wanted an Outback but there are no local Subaru dealers. I like to buy local.

I refused to buy the Explorer. It was a really nice ride. But all the electronic dodads on the dash ticked me off. I started yelling at the little voice while trying to set the tempature during the test drive. If I want it warmer or cooler I will reach up and turn the *%^&#$ dial/button. My wife thought it was comical when I basically turned all red faced mad. Don't get me wrong I like technology when it saves me time or makes my life easier. Some of these cars are really getting downright silly with all of gadgets they put in them.

My grandma has one of the new style Explorers. She and her husband love it. (But she also drives a new-ish Camaro convertible. Bright yaller with black heritage stripes)

And we have 2-3 of the new Explorers at work. I've driven a few of them. And I tend do like them. My own niggles about them? The sills are high. Like you have to step up and over to get in the vehicle. I'm not a short guy and I still seem to hit a foot upon ingress or egress. Rearward visibility sucks. Forgive me if I still like to check my mirror's blind spots with a quick glance. And the vehicles seem far wider than they "sit". It's like you sit way in the center of the vehicle and you've got a LONG way to go to get an arm out the window.

If I were forced into a new Ford, it'd be a Flex, though.

 

[Dosproduction]

I just want to let everyone know for update reasons I wussed out and did not buy any car. BAH, I have decided to take what the payment should be and have it deposited into a separate account. This will not only save me the money over time for a car but also let me budget with the money missing to see if I can afford it. I actually love both of my present vehicles being 1996s but as I said before I need more room for the growing family. Me and my wife decided we can hold off to see how our finances feel after separating the money into a new account.

 

[looney2ns]

I just want to let everyone know for update reasons I wussed out and did not buy any car. BAH, I have decided to take what the payment should be and have it deposited into a separate account. This will not only save me the money over time for a car but also let me budget with the money missing to see if I can afford it. I actually love both of my present vehicles being 1996s but as I said before I need more room for the growing family. Me and my wife decided we can hold off to see how our finances feel after separating the money into a new account.

Good move!