Buying New vs. Used Vehicles

Kirstie_H

What's the best value considering your driving needs, budget, and depreciation? Post your thoughts here!

michaellno

Not sure that it's about "value", but each buyer has their own approach.

For example, my wife refuses to buy used .. 'someone elses problems' she says. She also likes the new car warranty and knowing that she's been the only driver.

For a while, my sister and BIL bought slightly used --- first, an Infiniti G20 back in the mid 90's, then a used Explorer when they started to have kids. Now, they buy (or lease) new.

I'm sure that this topic will spark lots of debate .. for the same $20K, do I buy a new Hyundai Sonata with the 10 year warranty or the year old Camry or Accord?

jipster

The best value? My second car was a Olds Cutlass Supreme. Bought it for $1,500. It was about 7 years old, had 74k miles and was in very good condition. Sold it 7 years later for $750. Probably averaged $100 a year in repairs...if that. So, driving a fairly nice car for a little over $300 a year for 7 years...that's pretty good. Anybody out there think they can beat that for value?

slingshot80

Bought it for $200 in 1970 with about 70,000 miles drove it for 5 years, put on about 60,000 miles gave it to my sister .

slingshot80

After I got rid of the Pontiac, I bought a 1975 Rabbit. Big Mistake, piece of junk, got rid of it 3 years later in 1978 when I heard the engines were seizing up. Bought the Olds with 116K miles for $500. Everyone said I was crazy. Crazy like a fox. Drove that one for about 4 or 5 years. I did have to put in a rebuilt transmission for $350! Too bad GM doesn't build cars like that anymore.

krony

I think the best deals are 3-4 years old with 40-50K. By that time you've typically knocked half or more of the brand new price and have well over half the useful like left. Even with some repairs you still eliminate the pain of new car depreciation. As with "someone else's problems" that can be overcome by a test drive by a someone with a good ear and a in-depth review by a trusted mechanic.

In Jan '04 I bought a 2001 Saturn SL2 with 53K for $4300 from a local dealer. This car has been great to drive, overall reliable and gets 25mpg in town. Now with 71K still has a trade in value of around $4000. Even in 3 more yrs with 100K I figure it'll still bring $2500.

I can see a new post: Best $500 or less car experiences...

snapcracklepop

I've had 3 used cars and I'm finally on my first new car. My first used car was an 88 Taurus wagon bought in 94, didn't last too long. Second car was a 96 Nissan Sentra bought in 99 with about 28k miles and it was perfect, I only got rid of it when I moved away to school. Third car was a used 2002 Acura RSX with 16k and absolutely perfect. Only got rid of it when I traded it in for a new Acura. I probably really should've stuck with the RSX, I purchased it at a fair price, it was in perfect condition (had it checked out by a mechanic and had it run through an insurance database), and it still had a high value when I traded it in.

I'd buy used again, I'd just be smart about it like I was with the RSX, I learned a lot in buying used a few times and it's definitely worth the money to have it checked out

jrdwyer

There is no way I can beat $300-$500/year in vehicle costs, but here is my example of buying a well-made new car and running it a long time.

I bought a new '95 Mazda Protege in March of '96 for $13.3K. It just passed 200K miles and runs great with a solid engine and manual tranny (still on the original clutch). Oil usage is only 1 quart every 5-7K miles. I have done most of the service myself. When washed and waxed, the car still looks new. Fuel economy is still at 31-39 mpg. I plan on driving it for another 10 years.

I have detailed cost numbers because I use this vehicle in my consulting business. Here they are:

Costs per mile for the first 10 years (192K miles):

Purchase Price and Finance Cost- $.074
Gas- .032
Insurance- .023
Maintenance- .021 (labor not included for DIY work)
Registration and Wheel Tax- .004

Total cost per mile for first 10 years: $.154
Total cost per year for first 10 years: $2,957

*Estimated cost per mile for next 10 years:$.111
*Estimated cost per year for next 10 years:$ 2,131

*This assumes a doubling of average fuel costs, liability insurance inflation, and a new clutch.

Government deduction per mile for 2005: $.4317 (weighted average). This is great for my business.

So here is my lesson: get a reliable car (either new or used), take good care of it, and run it as long as possible!

krony

Great example, and detail.

So one question I have is at what point do you dump a used car? If the major mechanicals are ok I figure it's always worth putting tires, brake pads & rotors and other "consumables" on a vehicle. Even a clutch I could put justify for a manual trans. My most recent trade in 2004 I got rid of a '93 Buick with 140K. Could have ran it longer but the rocker panels were beginning to rust bad and other things were beginning to go wrong.

So what's your definition of forever? (Mine is until it costs more than $750)

jrdwyer

Forever in my definition means as long as the car is reliable (or fixed to be reliable), safe, and presentable (no big rust holes).

Rust is a car killer for many people in the north with body work being fairly expensive to try and eliminate it. I don't really have that issue where I live.

Auto Tranny failure is also up there for early death of a car. And electrical gremlins in today's complex cars drive many to drink or sell.

Cost of repair has not been a huge issue for me as most repairs and service to date have been under $300. I will spring for the new clutch at $800-$1000. I might even spring for a remanufactured engine if that issue came up before 300K miles. That would be a $2-3K repair.

I like the new car forever idea as it gives you all the information about the car's repair and service history. With this knowledge and history, I trust that my car will perform well. I also have a sense of what could go wrong ahead of time because I know what parts I've replaced. I would no problem driving the Protege across country tomorrow.

Buying new is also very important with the 5-10% of us who use a clutch. Clutch wear varies tremendously by user.

One could also get much of this information in the used market from an honest one-owner private seller with records. By the time a car is on the third or later owner the history and trust of reliability go away (especially past 200K miles). That said, as third owners we did run an '88 Olds Delta 88 from 100K to 200K miles before serious issues crept up and forced us to junk for $50.

I consider myself a good and safe driver, so I downplay the need for new safety features like ABS, side curtain airbags or traction/stability control. In fact, I think some of these features reduce the long reliability and increase the cost of maintaining a car.

Your limit of $750 to maybe a thousand is what most people consider the end. Past $1K and I would give repairs serious thought. My hobby of DIY repairs (where my labor is not counted) also makes many problems or maintenance items more feasible for long-term ownership.

carlisimo

I recently purchased a 2002 Miata. Tons of fun and ~$10k cheaper than a new one, but it's been a mixed bag. It has four or five minor mechanical issues that are intermittent and sneaked through inspection (nuisances that a warranty would cover). I can also think of four or five reasons that I would pay more for the redesigned model than the previous generation.

At the time I knew that paying $10k more wasn't going to be worth it, but now I realize I'm not going to keep my 2002 for as long as I would've kept a 2006. The depreciation differences lessen the cost differential.

I'm surprised that I wish I had a warranty. I've been good at doing my own repairs on the 12-yr old beaters I drove until a couple of months ago and even took pride in it... but I guess after driving those old cars I figured a 4-yr old car should be as good as new. It isn't quite true.

Outside of the car world I think I've regretted being a cheapskate much more often than I've regretted spending money. I'll be careful not to go to extremes, but I'm definitely learning my lesson.

steine13

I've posted this over on RWTIV, so forgive me if you've seen it. But it's pertinent to this discussion:

http://www.msu.edu/~steine13/cars.html

Unless something crosses my path that I HAVE to have, I'm going to get a new Vibe or Tacoma within the next half year... I wish to be wooed with incentives :shades:

-Mathias

jasmith52

Get rid of it when you get tired of putting too much money in it or when you are on a first name basis with your mechanic. Some people have used the three repairs per year threshold to decide if they should sell.

There is nothing that can't be fixed. You just have to ask yourself is it worth putting X dollars into that 10 year old car when you could put it towards something nicer and newer.

Per the buy new versus used, buying new will almost always cost you more than buying a late model used car.

For what it's worth, my last car purchased was a 03' Mercury Sable with 16k miles (ex-rental) that I bought when it was a year old for $10k in a dealer blow-out. The car was (and still is) immaculate. The car now has 71k miles and has not had a single problem. I estimate that my cost per mile is less than 10 cents/mile. Just try to do that with a new car !

When the car gets 100-120 k on it I'll sell it for what I can get and buy another clean low-mileage ex-rental.

steine13

Just try to do that with a new car !

I have.

1997 Nissan pickup, $10,500 + tax, sold w/ 57k on the clock for $5,700... almost 5 years later.

1998 Prizm, $9,300 OTD, trading in a $500 car; call it $9800. Sold 25k later for $7,300. These two were strippers with AC and not much else.

2004 Pontiac Vibe, $14k OTD, sold w/ 27k for $11,500.

My wife's '03 Sienna cost $21k, has 62k on the clock, and I could sell it on the street for $12. That's 15 cents a mile, but I've spent $1000 in upkeep and repair. Still, that's pretty good for what it is, and the used '98 I bought some years back wasn't any cheaper to run...

-Mathias

jasmith52

-Mathias

Didn't we already have this conversation ???

As I recall didn't you use some credit card rewards for those purchases. Just maybe that should be disclosed to the unsuspecting.

As you know most vehicles don't even come close. Also many people want a bigger car or truck than your examples.

Nonetheless, you are to be commended for your wise purchases.

steine13

Nonetheless, you are to be commended for your wise purchases.

Tell that to my wife...

This year, I bought a godawful Prizm that I flipped to a dealer -- that's how bad it was -- and took a $600 bath on... plus the taxes. That story is somewhere on CCBA, but I haven't had the heart to give the details.. just awful...

Then I bought a $300 pickup... fixed it myself for $30 (whoo-hoo!)....something broke... $400, had it done... something else broke... $400, had it done... exhaust broke... $15 and some elbow grease.... sold it for even money (yay!)... then the battery dies right at delivery and I'm out another $100...

There's a reason I'm evangelizing towards buying new. I'm only a genius when I'm lucky!

And yes, I've used the GM Card... but it ain't *my* money, and you can still get the card today...

-Mathias

jasmith52

Well Credit Card rebate money is just saved cash in disguise. I have several rebate cards. The Citi and Chase cards send me checks.

I like that - Money for nothin' and your chicks for free !

My best rebate story is ...

I bought the loss leader ad car at a local dealer. I got a brand new 2003 Pontaic Sunfire. It was manual trans but had air conditioning and was trimed out very nicely. The out the door price including tax, license, and all the dealer fees was $6825 which included lots of GM card rebate credits. Clearly this isn't a deal that everyone could do.

I sold the Sunfire 8 months later with 11k miles for $7000.

Now what was my per mile cost ?

jasmith52

There's a reason I'm evangelizing towards buying new. I'm only a genius when I'm lucky!

Well I have bought more used cars than just about anybody. I used to do it for entertainment. If you do this enough you will eventually run into a lemon car :lemon: . My lemon car was a 1995 Buick Riviera bought used with 110k miles on it. The car looked almost brand new. But Oh what a hassle it was. In 14 months of ownership it stranded me twice (almost three times) and broke regularly.

The final straw was when it threw a rod whilst I was on the freeway doing 70 mph. The rod went through the oil pan and oil spilled all over the hot exhaust. Remember those WWII movies where the tanks lay down a smoke screen ? Well that was my Buick.

I got it fixed and sold it after that. In hindsight I should have poured gasoline over it and torched it right there by the side of the freeway.

So now we drive new or nearly new cars like the Mercury posted about previously. It may cost some more but there are very few hassles. Life is short and who needs hassles ?

I do have a 21 year old Corvette that I drive on the weekends. It has it's issues but when it doesn't run well it just gets parked in the garage until I can get around to it.

hooliagoolia

Hi
I love this board, because I need a lot of advice! My husband insists that buying used is the way to go. I am not a practical car person; that is, I know I should buy a Honda or Toyota, but I want a Volvo or Infiniti or Saab (yes, I know, it's ridiculous). However, I'd buy a new car if it was stylish and fun to drive and not insanely expensive, like a Mini. Basically, I have no kids, will probably transport very little except my 2 pugs, and I drive maybe 5 miles back and forth to work. Also, I live in the Metro area of Minneapolis-St. Paul so we have cold weather, icy roads, lots of salt, all the really great driving conditions.
I have what I call a "VW" disorder in that I am always drawn to these damn Volkswagens but I know they are a nightmare (I had a Rabbit and a Fox!)
Any suggestions in the low-end used luxury category or something new that's not Honda/Toyota (sorry I don't like the Yaris or Fit)? I would like to spend less than $20M. I hope this is an ok question to ask. Thanks!!

qbrozen

wow! less than $20Million? That just opens the doors to all kinds of possibilities.

ok... i'll assume $20K.

Volvo and Saab are not in the same category as Infiniti. To the best of my knowledge, Infiniti is quite a bit more reliable (although i'm a strong supporter of volvo).

5 miles in cold weather is highly abusive to a vehicle. So you definitely want something reliable that can take a beating. Honestly, for a 5 mile trip, I'm not sure why you care what it is. I could do 5 miles in a Yugo before I even realize what I'm doing.

If stylish, fun, and reliable are the 3 criteria, I suggest a Mazda3. If you really insist on some luxury ... well, that's tougher. I can't think of anything that's necessarily "fun" and "luxurious" while still being reliable, able to take the punishment of short trips in the cold every day, AND under $20k.

hooliagoolia

Hi
sorry, yes, 20K. I work in purchasing and we use "M" to designate 1000.
I wish I had 20 mil to spend on something!

I'll take a look at the Mazda 3. I used to have a Nissan Truck and that thing was a nightmare when any mechanicals/maintenance was involved (the spark plugs were in a crazy place, the entire front grill had to be removed to change a headlight, etc.) and I guess I associate this weirdness with Mazda too but I really don't know anything about Mazda.
Thanks for your post!

Kirstie_H

I can't think of anything that's necessarily "fun" and "luxurious" while still being reliable, able to take the punishment of short trips in the cold every day, AND under $20k.


I can. I bought one. It's a used Infiniti G35.

hooliagoolia

What year Infiniti did you get? I hear the G35 is a good used car!

qbrozen

I was thinking of that as the only fun infiniti ... but UNDER $20K??

wait ... did you and i discuss this before?? I think I was shocked at that time when you told me the price, too. I've yet to see one around here for that kind of money that didn't have ALOT of miles on it.

EDIT: ya know what? i'll have to take that back. I just went and searched in my area on autoshopper and found like 3 2003s for around $21k with ~40k miles.

'03 was the first year, I believe, correct?

hooliagoolia

Hi
nope, I've never posted before. I'd be willing to go to $21 if it was a great car.
Thanks!

qbrozen

oh, no, i meant kristie and i had talked about her infiniti before.

By the way, $21k would just be the asking price, so I figure that's easy enough to get below your $20k target, which is why I included up to $22k in my search.

corvette

I would pass on a used Volvo or Saab unless you're prepared to deal with repairs. The G35 would probably be a great car for you. If you're worried about driving frequently in snow and ice, you might invest in a set of winter tires.

isellhondas

If you think a Nissan truck was a nightmare, you have no idea what a Saab or a Volvo will do to you.

Mazda 3 would probably be a good choice.

Kirstie_H

Bingo - it's a 2003, had 33K miles on it when I bought it, and I got it for right around $21K. I didn't negotiate the price, though. It was, at that time, more important to me to get out the door, with the car, on that day, in under an hour. I told 'em if they could make that happen, I'd pay asking price.

And hooliagoolia, it's been a great car for me thus far, but it was exactly what I was looking for. All the toys (including my "must have" heated seats) that I wanted, plus it's comfortable and a reasonably sporty drive. No way to tell if it's right for you til you take a test drive, but I'd recommend driving the Infiniti G35 and the Mazda 3, as others have mentioned. Totally different vehicles, but both should fit the "fun" requirement.

corvette

That was the first year of production for the G35... Have you had any problems with it?

Kirstie_H

Nope. I just had to have the brake pads/rotors (throw-aways) replaced on Friday, but not too bad given that it's now got 48K miles on it. Regular maintenance items only... no "problems," knock on wood.

corvette

Pretty impressive! I like to keep informal, unscientific tabs on reliability.

timetobuy1

This is regarding a new 4Runner:
I would like an opinion on whether it makes more financial sense to buy a 2006 at 1.9% interest rate and lower price or a 2007 at 4.9% at a higher price. I dislike the idea of paying more interest and the price would certainly be better on a new 2006 but maybe I should just get the newest model??? I'm wondering if I'll be losing more money by buying an older year new car.
Thanks!

cccompson

As the host said on the other thread, the '07 will be worth more down the road. That said, depending on the price difference, the '06 may well be the better buy.

Calculate the interest savings and add them to the price savings. The resale difference between the two down the road may be narrowed a bit (depending on you annual mileage) because the '06 will always have lower miles per year relative to its age. Lastly, unless there is a significant difference between the model years, you're getting into the same vehicle for less by going with the '06.

timetobuy1

Thanks for the info!

british_rover

If you are going to keep the car for more then three years get the 2006 if not get the 2007.

The slight differance in depreciation between the 2006 and 2007 will be gone after more then three years and you will only really see the lower interest rate savings if you keep the car for the majority of the length of the loan.

timetobuy1

Thanks for the info british rover. I'm now looking at a 2007 4runner limited demo. I understand that this car counts as new, but shouldn't the salesperson adjust the price accordingly...or not???

serieshybrid

Here's a different angle, if you have a major engine failure and decide not to fix it, where do you sell an undriveable car? Has anyone found a website or dealer who specializes in selling cars with blown or failed engines? Many hobbyists are looking for a "project car" and I would like to start converting these to series hybrid electric cars and see how successful an Electric Used Car Lot (mark-at-serieshybrid.com) might be. For now I can only consider manual transmission vehicles, but even so there must be hundreds of real primo cars that fall in this catagory every year. So, in the Internet age, there must be someone making a business out of selling cars with major engine failure. If you know of one, please share the secret.

Thanks, Mark

cccompson

Mark, you might try readytofix.com. While this site mostly lists collision damaged, flooded, and theft recovery units, some have seized motors or otherwise do not run.

qbrozen

I often see cars with blown engines on craigslist.

3ms

Our local Kia dealer is offering $5000 off MSRP on new 2006 Kia Sedona LX. Or buy a new 2006 Sedona EX and get a free Rio or $6000 off MSRP.

Or they have used 2006 Sedona LX with around 20K miles for $15,900. We would probably buy the extended warranty on that since we plan on keeping the car until it hits 100K miles +. So if you factor that into the price, the gap between a new and used 06 Sedona gets smaller. At what point do you buy used - $1000 difference b/t new and used, $500 difference...?

We've never bought a new car before so this is all new to me. On discounts that are a certain amount off MSRP, is that the final price or is there room to negotiate their MSRP down before applying the discount?

Edmunds has the TMV on a new 2006 LX (with the cross bars, roof rack and tow hitch) at $23334. I think the dealer is asking $24K - 25K plus cross bars and tow hitch.

Thanks!

jipster

I think they are asking to much for the used LX(20k miles for a car one year old is a lot).

But, as it is now I would suggest buying the new 2006 LX.

3ms

Thanks for the reply!

That's interesting that the $15,900 seems too much for a 20K mile '06 Sedona. We tried buying one earlier this week (before this latest round of rebates came out) that had 21K miles on it, with an asking price of $18,998. They wouldn't budge from their price but offered us $3800 for our trade-in (99 Ford Windstar w/ 115K miles).

I can't seem to find a used '06 Sedona any cheaper than the $15,900 doing the nationwide searches on the websites.

Maybe we should wait a few more months and see if the used ones come down in price?

jipster

I missed the question in the last part of your post. I would try to take any new car discount off of invoice price... not MSRP. If a manufactuer is offering discounts/rebates, then usually their product isn't in that high of demand.

Typically the mark-up on used cars is quite high. So, if you decide to go the used car route, I would check out the Purchasing Strategies and other buying tips discussions in the Smart Shopper board to brush up on negotiation strategy.

The $15,900 seemed a bit high to me, but could be o.k
The main thing is to take your time,and buy the vehicle you want at the price you want to pay.

3ms

Thanks again! We actually stumbled onto what seems to be a great deal last night. A brand new 06 Sedona LX for $17,993. Edmunds has the invoice at $22720 and then subtract the $4K rebate for a price of $18720. So it seems like a great price.

The used 06 LX they had was going to be about $2K less but have 15K miles on it. Plus, we were going to add an extended warranty on it for another $1000. So that narrowed the gap even more.

We're looking at the car and nailing down all the fees and such today so we'll see if this deal pans out.

Thanks so much for your advice!

jipster

You're welcome... and good luck. Let us know how it turns out.

jvc23

Wanted to share my experience with you. Two years ago I took a big risk and bought a 95 Lexus LS400 with 95K miles off Ebay. Total cost including shipping was $9300. I always wanted a big luxury car and figured it was worth it even if I had to spend $1000 in repairs a year as compared to a brand new $22,000 sedan -- especially when you factor in insurance and taxes.

2 years later. Happy surprise! Only repairs are about $300 to replace front seat belts and $30 for a radio antenna. That's it! I don't drive more than 5,000-6000 miles a year. But this has been my most trouble free car ever! (Compared to several minivans, Corollas, Fords, Dodges). It does tend to eat gas and gets poor mileage but it hardly matters for my driving. I was worried that the daily stop and go driving in short trips would beat on the car. But it looks in great condition. The leather seats look better than those of our friends' six year old Lincoln. The paint outside still gleams (I detail it myself). And as for the drive -- nothing I have tried, new or used, compares for smoothness of ride combined with quiet power.

Maybe this is just luck, but given my experience (and this would be true even if the car suddenly turned to scrap in the next two years) this is a much better deal than a new or almost new family sedan. I mean, if a new Buick or Honda cost 22k and had to be replaced every 8-10 years and a used LS400 lasted only 4-5 years, the latter would still be a bargain and an all around better driving experience. As it is, this cheapskate plans to drive this baby for years -- or until the repairs get frequent and painful.

3ms

We ended up going with the new '06 Sedona from the dealer that quoted us 17993. She was out of town but not too far away. The numbers were legit and the only other fee was a $97 doc fee. Whether or not that was a "necessary" fee was inconsequential at less than $100.

No one around here in my local area could get close to it. They even brought over the Gen. Mgr. - and I was shocked by the way she treated us. As if we were lying about the price quote from the other out of town dealer. She told us she couldn't pay the rent or keep her lights on if she sold us the car at that price. Um, yeah right.

So we travelled the next day and brought home our Sedona. When our local dealer called to see if we wanted to come in and "talk" again, we politely told them that we already bought a car. He asked so we told him that our salesperson that sold us our car, sold six others that day. I'm not sure what a typical day is like but selling 7 cars in 8 hours sounds like a pretty good day to me!

Thanks again for the insight!

jrdwyer

Sounds like you got a good deal on a nice minivan. Can't beat that!

$18K for an extended length minivan in mid trim, that is going to put some pricing pressure on Honda and Toyota. I believe you can find Chrysler extended minivans "on sale" for about the same price.

How times change. We looked at the Kia back in '01 when we bought our minivan. It was small and had terrible gas milage. Now the Kia is big and a real competitor.

For comparison, we paid $20.7K in 2001 for our new extended Olds Silo. Honda/Toyota minivans at the time were $23-$25K for comparable equipment. The Hondas were all pre-sold and the last generation Toyota was small like the Kia.

Drove by the Honda dealer the other day and saw many new vans on the lot. It's a buyer's market for minivans today!

yaffi

I have a 2003 chrysler sebring convertible that I bought three years ago with 15,000. miles on it. Right now the vinyl top doesn't close exactly right in the corners. I am wondering about a few things. The car has 37,000 miles on it. I just put in back brakes and last year i put in window motor mounts. I also bought michelin tires 1 and a half years ago. That is about the extent of any major maintenance i have done. I am not dying to get rid of it for any reason, but I am thinking about whether or not I would like to replace the vinyl roof with canvas and perhaps the carpet because my high heels made a small hole in the front by where my left foot sits.
What I wonder is if the investment for the sebring would be worthwhile as I have also been thinking to buy a new car down the road-- either a used mercedes convertible, older celica is nice, bmw or audi. I would want the most economical on repairs and maintenance and the best body and wonder what year and model would be the best purchase and how long more i should keep the sebring. Suggestions?

bobst

My suggestion is to keep the Sebring until it has 100K miles.

During that time, look at different models of cars so you will know exactly what kind of car you want to replace the Sebring.