dukebound85
macrumors Core
When I was looking at cars, they were selling a 1-2 year old car with 16k miles or so for MORE than the MSRP price stated on the window sticker they "left behind" in the glovebox from when it was new
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Buying a car after college, new or used?
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When I was looking at cars, they were selling a 1-2 year old car with 16k miles or so for MORE than the MSRP price stated on the window sticker they "left behind" in the glovebox from when it was new
ericrwalker
macrumors 68030
WHAT? Were they demo cars that had the "everything package"? Or cars with a lot of extras? Like $10,000 worth of stereo equipment?
Hellhammer
Moderator emeritus
My parents just bought a 2010 Volkswagen Golf for less than 2/3 of its original price. Had only 40,000km on it too so it's almost new.
1. Your insurance may cost more. However, there is a little trick you can do, at least here in Finland. Ask your parents if they can take the insurance (you would pay them, of course). If I had taken the insurance for the Golf, it would have been more than a double than it's now that it's on my mom's insurance (cheaper than have it on my dad's). That's because young drivers are more prone for collisions.
3. In terms of physics, an older car has experience more wear out and sooner than later its parts need to be replaced. The mileage is more important than the age though. Try to get some kind of warranty from the seller, i.e. buy from a car shop.
1. Your insurance may cost more. However, there is a little trick you can do, at least here in Finland. Ask your parents if they can take the insurance (you would pay them, of course). If I had taken the insurance for the Golf, it would have been more than a double than it's now that it's on my mom's insurance (cheaper than have it on my dad's). That's because young drivers are more prone for collisions.
3. In terms of physics, an older car has experience more wear out and sooner than later its parts need to be replaced. The mileage is more important than the age though. Try to get some kind of warranty from the seller, i.e. buy from a car shop.
dukebound85
macrumors Core
Nope. When I pulled out the window sticker, they said the reason it cost more was because of the Japan issue. Went back a week later to relook at it and they conveniently got rid of that sticker lol
ericrwalker
macrumors 68030
I heard that after the earthquake/tsunami that parts shipping here were at a standstill. Though I would imagine that the biggest issue is with the hybrids, which are mostly built in Japan. Most Japanese cars are actually built in Canada, Mexico and the USA as far as I know.
steviem
macrumors 68020
Ah, that's called 'fronting' and in the UK invalidates the insurance. I found when insuring a car both with myself as the main driver, it would cost £1200 per year completely on my own and £800 with my mum as just a named driver. If it was my mum as the main and me as a named driver, it would've been £450.
I've always 'wanted' a brand new car, but seriously can't justify the long term expense and family members have had big issues when buying brand new cars - my aunt bought a Peugeot 307cc brand new and it was in the dealer all the time on mysterious electrical issues and in the end they wouldn't honor their warranty despite the electrics being shot.
mkrishnan
Moderator emeritus
I haven't been shopping for used cars much recently, but I have heard this too, both anecdotally and in the news (e.g. on NPR). At least sometimes, the answer to Eric's question is no -- these are actually cars selling for more than any sensible person ought to be willing to pay. I don't know exactly why it happens, either because of crowd insanity or because used cars are sold with different financing options and financiers, and the buyers may not be able to get a new car dealership to sell them the car.
EDIT: I believe it started before the earthquake. Let me see if I can find some more info. This won't load for me, but I believe it discusses it: http://www.forbes.com/sites/jimgorzelany/2012/01/02/five-reasons-to-buy-a-new-car-in-2012/
Gregg2
macrumors 604
Of course, that strategy is dependent on the supply of stupid people. Who sells a car after only 2 or 3 years? Thankfully, there is no shortage. Or, maybe you have to find a fleet car, but those are driven hard, probably will break down sooner.
But think about it, if it's so smart to buy used, then everyone should do it. Oh, wait, that won't work, will it?
ericrwalker
macrumors 68030
My spidey sense senses sarcasm.
Of course it's nice to buy new cars, everyone wants a new car. When someone buys a new car, it doesn't always mean they're stupid. If they have a lot of money, why not?
The best deals are almost always used cars, but the downfall is, it's not new.
Personally, I wouldn't buy a fleet car, and any used car I buy, I want it to be in excellent shape of I am not buying a beater.
Of course it's nice to buy new cars, everyone wants a new car. When someone buys a new car, it doesn't always mean they're stupid. If they have a lot of money, why not?
The best deals are almost always used cars, but the downfall is, it's not new.
Personally, I wouldn't buy a fleet car, and any used car I buy, I want it to be in excellent shape of I am not buying a beater.
AustinIllini
macrumors G5
I bought a used upscale vehicle. If you can get a used japanese car (a Honda, Acura, Toyota, Lexus) with a certified warranty, you won't regret it, and you will definitely be able to keep the thing forever.
I bought an 08 Audi last October with a certified used warranty, but i'm fully expecting to put some money into it later (but i mess with cars a lot)
----------
In the US, there are quite a few things going into an insurance rate. For example, when comparing an 09 Chevrolet Cobalt and an 08 Audi A4, the A4 was cheaper by almost $200 every six months. I did some research, and the only thing i could find was 1) the A4 is older, and 2) the A4 is much safer.
Common knowledge would suggest that an Audi would be more expensive to insure.
I bought an 08 Audi last October with a certified used warranty, but i'm fully expecting to put some money into it later (but i mess with cars a lot)
----------
In the US, there are quite a few things going into an insurance rate. For example, when comparing an 09 Chevrolet Cobalt and an 08 Audi A4, the A4 was cheaper by almost $200 every six months. I did some research, and the only thing i could find was 1) the A4 is older, and 2) the A4 is much safer.
Common knowledge would suggest that an Audi would be more expensive to insure.
MacNut
macrumors Core
Take a look at carmax.com, they have a great selection and the prices are usually lower than going to a dealer, When you look for a used car don't get something too old. No older than 5 years as the milage will be higher and it will be in for repairs quick. Also look at the previous owners, the fewer the better.
wordoflife
macrumors 604
We went car shopping a few weeks back because our car was totaled, and I can tell you that this happens. Used Civics were $16,000-$18,000k, yet you can get a new 2012 Civic with a considerably better fuel range for $21,000-$22,000. Maybe even lower. The dealership was just telling us that based on the way things are right now that if I want a Civic, I'm better off buying a new one.
USED, try Carmax and test out different cars you might even find a good deal. But if you really want a new car lease it.
Pricing has a lot to do with psychology. A recent radio article I heard stated that airline tickets from the UK to the USA have three levels of pricing; a basic cost of around £750, a mid-range price of around £3250 and a top-end price of £8000. (Club-class, business class etc)
Most people discount the top price as ludicrous, and ignore the cheapest as they don't want to be thought of as a pleb, so opt for the mid price. This gives a whacking profit but they think they're getting value for money compared to the top price whilst still declaring themselves as above the commoners.
Same with car prices....
Most people discount the top price as ludicrous, and ignore the cheapest as they don't want to be thought of as a pleb, so opt for the mid price. This gives a whacking profit but they think they're getting value for money compared to the top price whilst still declaring themselves as above the commoners.
Same with car prices....
OneMike
macrumors 603
Gregg2
macrumors 604
No, not well put. The fact that cars are not investments makes the depreciation meaningless. You don't plan on selling it right after you buy it, do you? If you were buying it as an investment, it might make sense to buy used, fix it up, and try to find some sucker to sell it to for more than you'd put into it.
ericrwalker
macrumors 68030
Sounds like you're the sucker, and you believe that all used cars are crap. My current car is used, and it looked near new when I bought it at about 2.5 years old for about half what it would have cost to buy a brand new car. The Car I sold I paid about $33k after all fees, Sold it two years later for $17k. The car was clean enough to food someone into thinking it was a new car. perfect condition and perfectly clean. I suppose I was the sucker when I bought that car, and someone got a great deal.
senseless
macrumors 68000
Used cars used to be a clear economic advantage over buying new, but not with the inflated used car prices of today. Used Hondas are no bargain, as you've pointed out.
If you qualify for the best financing, plan to keep the car for at least 7 years and drive more than 12,000 miles per year, buying new doesn't cost that much more than buying used.
If you qualify for the best financing, plan to keep the car for at least 7 years and drive more than 12,000 miles per year, buying new doesn't cost that much more than buying used.
Gregg2
macrumors 604
Sure, if you're going to change cars that often, buy used (as I've stated above, somewhere). There are many other cost factors to consider in the new vs. used decision: insurance cost, repair costs, time value of your money (lost opportunity for investment gains if you spend more, or spend often)...
This:
Except that "used to be clear" part. It has always depended on how long you keep the car, always will. Further, if you plan to keep a car that long, or longer, you shouldn't have to finance the next one. Pay cash.
ericrwalker
macrumors 68030
Even if you keep it for 15 years, you can still save several thousand buying a near new car. That includes Honda, which my
Last two were.
Gregg2
macrumors 604
Sure, if you're comparing the purchase price of a single new car to that of a single used car. That much is obvious. If you're about to die, or give up driving, that is as far as the analysis needs to go. But, if you are going to continue to have transportation needs for longer than the used car will satisfy you, you have to compare the cost of buying used cars more frequently to that of buying new cars, and keeping them longer.
Just as an illustration, only considering the purchase price, if you buy a used car for $10,000 and keep it for 5 years, then buy another for $12,000 and keep it for 5 years, my cost of $22,000 for a new car the same year you bought the first one is the same if I keep it for 10 years. As I've said all along, it depends... If you buy a used car and keep it for 10 years, you'll come out ahead of me.
Gregg2
macrumors 604
Not so fast! From Edmunds:
The Life-of-Vehicle Argument: Where Conventional Car Buying Advice Takes a Turn
If you had bought a used car at nearly half the price of the new, drove it five years, and it is now worth just $2,000, the odds are good that it probably doesn’t have much life left in it. It would have been roughly 5 years old based on a 50% resale value (and dealer/seller markup) when you purchased it. On the flip side, the new car might give you a run of another four, five or even seven years, particularly if you are a conservative driver who follows all of the proper maintenance suggestions. Suddenly, the picture is not so clear.
In the first five years of ownership, a used car cost $1,799 less to own than a new one. But here’s where it gets interesting. Let’s assume you get five more years out of the vehicle that you purchased new. If you had bought used and went out and purchased another $10,000 vehicle, you’d be paying $285/mo. for the second used vehicle. Meanwhile, your monthly payments for the new vehicle would be $0. Suddenly, you’re saving $3,420/year with the new car purchase vs. the additional used-car purchase in the second five years.
The Bottom Line
Unless you are in a very short-term, high-need situation that turns the numbers in your favor, leasing rarely makes financial sense. (Though if you’re truly the type of person who likes to show off with a shiny new car every two or three years, then leasing might be your best bet. After all, if you try to sell a new or used car just two or three years into a longer-term auto loan, chances are you will be “upside down,” or owe more than the car is worth.)
Choosing between buying new or used is much more complicated. If you plan on driving the car into the ground (that is, keeping it for 10 years or so), it might make a lot of sense to buy new versus used. If you want to swap vehicles more frequently, buying used makes more financial sense. The qualitative and emotional aspects of vehicle ownership may yield a different outcome altogether.
http://www.mint.com/blog/goals/new-vs-used-vs-lease-a-car/
Kind of what I've been saying. No, exactly what I've been saying!
The Life-of-Vehicle Argument: Where Conventional Car Buying Advice Takes a Turn
If you had bought a used car at nearly half the price of the new, drove it five years, and it is now worth just $2,000, the odds are good that it probably doesn’t have much life left in it. It would have been roughly 5 years old based on a 50% resale value (and dealer/seller markup) when you purchased it. On the flip side, the new car might give you a run of another four, five or even seven years, particularly if you are a conservative driver who follows all of the proper maintenance suggestions. Suddenly, the picture is not so clear.
In the first five years of ownership, a used car cost $1,799 less to own than a new one. But here’s where it gets interesting. Let’s assume you get five more years out of the vehicle that you purchased new. If you had bought used and went out and purchased another $10,000 vehicle, you’d be paying $285/mo. for the second used vehicle. Meanwhile, your monthly payments for the new vehicle would be $0. Suddenly, you’re saving $3,420/year with the new car purchase vs. the additional used-car purchase in the second five years.
The Bottom Line
Unless you are in a very short-term, high-need situation that turns the numbers in your favor, leasing rarely makes financial sense. (Though if you’re truly the type of person who likes to show off with a shiny new car every two or three years, then leasing might be your best bet. After all, if you try to sell a new or used car just two or three years into a longer-term auto loan, chances are you will be “upside down,” or owe more than the car is worth.)
Choosing between buying new or used is much more complicated. If you plan on driving the car into the ground (that is, keeping it for 10 years or so), it might make a lot of sense to buy new versus used. If you want to swap vehicles more frequently, buying used makes more financial sense. The qualitative and emotional aspects of vehicle ownership may yield a different outcome altogether.
http://www.mint.com/blog/goals/new-vs-used-vs-lease-a-car/
Kind of what I've been saying. No, exactly what I've been saying!
