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Buying a car after college, new or used?

MusicEnthusiast

MusicEnthusiast

macrumors 6502
Original poster
Jun 23, 2010
442
53
Los Angeles
I just started a line of credit (American Express) and I'm graduating from college in the spring of 2013. I've saved up at least $4000 away from my college expenses for this, and wondering if it's more worthwhile to buy new over used. Here are some questions I need answered. (By the way, when I mention a new car, it will be a 2008/2009/2010, 2011... probably not a 2013). Also, I don't know how to drive stick shift, but really want to learn.

1. I drove in high school and got into a minor collision in September 2008. I was put at fault for it, unfortunately, but in the state of Washington, these accidents go off my record after 5 years. So I can say that in September 2013, my driving record will be fine. I have no other dents on my driving record. Will this hurt my chances of buying a car and/or insurance before Sept 2013 if I am 22 years old turning 23 in November 2013 by then?

2. Does it cost more to insure a new car over a used car? These are factors I want to consider.

3. Would buying a new car ensure I would spend less on repairs/tune ups in the long term over a used car?

4. I owned a 1994 Toyota Camry that I got an accident in Sept 2008. I was wondering if I should still buy Toyota or if there are better models out there (Honda?)

5. My mom has AARP insurance, which has accidental forgiveness. Since I was on her insurance in 2008, this accidental forgiveness went into effect for my car. I want this for my own insurance when I go to purchase it, but I don't know where to look. AARP is for 50+ year olds, so I don't think I qualify...

Anything else I should know about buying a car right out of college would be great. I'm trying not to be intimidated from my accident 3 years ago, and I'm itching to get back in the drivers seat. It's been far too long. Thanks guys!
 
Used. Let some else take the 50% depreciation hit. Cars are expenses, not investments.
 
MusicEnthusiast said:
1. I drove in high school and got into a minor collision in September 2008. I was put at fault for it, unfortunately, but in the state of Washington, these accidents go off my record after 5 years. So I can say that in September 2013, my driving record will be fine. I have no other dents on my driving record. Will this hurt my chances of buying a car and/or insurance before Sept 2013 if I am 22 years old turning 23 in November 2013 by then?
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It likely won't hurt you with buying a car, but it will for insurance. Depending on the company you go with, your best discounts come at age 21, or 30, or somewhere in between. Just because the accident (points) come off your record after five years doesn't necessarily mean the claim goes away from the insurance company's perspective.

2. Does it cost more to insure a new car over a used car? These are factors I want to consider.
Click to expand...

Maybe, maybe not. It goes more by the value of the vehicle than whether it's new or used. Pickups are cheaper to insure than SUV's. Sedans are cheaper than coupes.

3. Would buying a new car ensure I would spend less on repairs/tune ups in the long term over a used car?
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You'll save money on repairs vs. used if you keep it a fixed amount of time, say 5 years, but regular maintenance like tuneups, oil changes, etc. will be the same.
 
get what you can afford. i'm a car guy so my opinion is biased.

a new car will come with at least a 4 year warranty. if you buy used, pay extra for a certified preowned car from a dealer. you'll end up with way less headaches in the long run. if you buy from a private seller, get some references and have a mechanic look at the car before you buy.

if you're getting full coverage, it will obviously cost more if the car is new since it is based on the replacement value. if you're financing the car, the bank will force you to carry full coverage. if it's liability only, the cost will depending on the type of car you choose, particularly how many doors and how many cylinders.
 
Used.
Your likely in debt from school and cars are not an investment.
 
cars are not an investment.

Get an old car and restore it. Maybe somebody in your family has one. Look my thread, I restored grandma's car to honor her. She's 96 and made it to the end of the world! (year 2012)
 
MusicEnthusiast said:
2. Does it cost more to insure a new car over a used car? These are factors I want to consider.
Click to expand...

if you compare the cost of insurance for a new vs used car of the same model, the new car is going to cost you more to insure

MusicEnthusiast said:
3. Would buying a new car ensure I would spend less on repairs/tune ups in the long term over a used car?
Click to expand...

maybe, maybe not.....the difference in price for a new car might make up the difference even if you spend more on repairs for the used car. It'll also depend on how old the used car is and how long you keep either car.
 
I'd say go with a used car. You can get really nice cars for the same price as a new compact car. Or, if you decide to spend less, you have the same car and more money in your pocket.

Be sure to get the car inspected by a good mechanic. If the owner doesn't want, move along.
 
I think a 3 year car is the way to go. FInd one in good condition and that retains it value. Drive it for 2-3 years and sell it. You'll most likely get back most of what you paid for it.
 
waloshin said:
Used.
Your likely in debt from school and cars are not an investment.
Click to expand...


Oh yes they are. Buy a pre-1973 sportscar in the UK and get free road tax, plus they go UP in price rather than down. I've got four of them and they're all worth far more than was paid a few years ago, and the prices are still rising every year.
 
Right now is a bad time to go into debt, if you don't have to. Buy a $4000 car from an individual. Low end used car lots, are usually bad places to buy in that range. They are overpriced, and bought at auctions, from God knows where. Have someone you know, that is very knowledgeable about autos, and knows how to negotiate a fair price, to help you. What ever you buy, take your time, and a you will find a good bargain.
 
It's hard for me to do this myself, but used if you want to be smart with your money. Save the new cars for later on in life when money isn't a issue.
 
too many college graduates are stuck now in debt and having to work at fast food places because they cant get jobs...guess i took the easy way out joining the military...but anyways, either use that 4000 and buy a used car, or join the military, and buy a new one lol (seriously, just buy a used car)
 
I had a 1990 Celica since 2001 when I was 16. I graduated college in 2008. I drove that celica until July of 2011. I bought a new car in July 2011 with the mindset of keeping it for at least 10 years.

I gave my now 16 year old brother that celica for free.

I don't regret it one bit

I personally wanted to have a car it's entire life and have it be reliable.

Whenever I get in my celica now, it just feels "old" lol
 
Used.

The moment you pull a new car off the lot you've already lost $5-10K depending on the car.

Just make sure the car was taken care of, and you fix any outstanding issues.
 
If I'm 22 I'd want a new car. As a 41 year old I agree with the other older and wiser members that very used is the way to go. Buy a $3000 car reserving a thousand for car emergencies. Save up another $3-4000 and drive the car til you defeat it and buy another. Repeat process until you can retire 10 years early from the saved $$$$.
 
Take advice from me. Do NOT buy until you get a job. Yeah, you may have just graduated and you're very optimistic about the rest of your life. Or, you're in college still and think your life will be great the day you step across that stage. It more than likely won't be at least at first the way things are now.

Luckily, I was able to buy a certified pre-owned Honda outright when I graduated in 09', but had I had a payment plan, it would have been gone by now. I was under the impression that I would be making money straight out of college, but unfortunately, that's when the economy was in the tank (still is).

If you're still in college, seems like you are, since you said you are graduating in 2013. Take the bus, you're more than likely on campus, utilize the transports the school provides.

Yeah, you may REALLY want a car right now, but take it from me, you don't NEED it.


And, you talked about a line of Credit from American Express, they will more than likely hose you on the APR rate. If anything check out a local credit union. I agree with what other members have said, this is not an investment, it's an expense, and unfortunately your expense will be more than just about everyone replying due to your age, history, and financial situation.
 
Yeah, job first, car second, if you need one to get to work.

I always buy new. But I keep them til they die. I don't care if they depreciate quickly, I'm not gonna sell it, and, as others have said, it's not an investment, it's transportation. If you "have to" trade every few years, buy used cars.
 
I agree with most of the comments about buying used, but look carefully at the price you are getting and how depreciated it is from the likely original purchase price. Used car prices hit record highs in the US in the last 1-2 years, and to some extent that dampens the quality of used car deals (although, in general, it makes more sense to buy used than new).
 
I say go used, I've only bought one new car before and I don't think it's worth it. You can get a car is excellent shape for a fraction of the price. Buy a 2 or 3 year old car.

That's what I will do unless I hit the lottery or something, it's by far a better deal to get a used car IMO, unless you lease and plan to upgrade every 2 or 3 years.
 
You still have a little ways to go but you can see the light at the end of the tunnel. Congrats on the college thing.

See first what type of college debt you may have and what job offers you get. It used to be more dependent on what you majored in but in this recession, many college graduates (if not most) end up in jobs which don't require a college degree. And in many jobs that do require a college, degree you don't get paid much more (if at all) over a high school diploma required job. Even if you get a job that pays well over one that doesn't require a degree, it will still take years, after living on your own and interest, to have the college degree pay for itself. The biggest trap, besides buying a new car, for a college grad is to change spending habits with new job and money to the point of having MORE debt after college and month to month for the rest of your life. This is what I have found in the majority of cases.

In most cases, buy a nice used car and have it free and clear, so what you can focus on is your rent/mortgage (mortgage is cheaper where I live) and any student debts. The last thing you need, as explained here, is the type of debt a new car loan could be. You are better off making some slightly higher payments back on any student loans first and in the long run any money you saved by having a used car will multiply itself in paid off student loans and the interest which can really get you.

As for cars, and now real estate for the foreseeable future, are things which can help but are in no way investments. Consider a used car or new car as a tool, but not as an investment. Unless you are a mechanic and unusually clairvoyant in what cars will go up in value, don't treat a car as something you can get back what you paid for it or something you can profit on.
 
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Used for sure. Lots of good reviews on the web as to which cars and which years are worth buying.

Then take the money you would of spent on new car payments and throw it into a saving account reserved to buy a new car down the road.
 
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