Does it really make financial sense to buy used over new?

[Astro14]

The old adage was never “the car loses 50%”, the old adage was always 20%.

Right now, the used car market is still distorted because of Covid production problems.

I saved a lot of money over the decades, buying used cars and keeping them running. One of the largest costs of car ownership is depreciation, and the depreciation on a used car is much lower, every year, than the depreciation on a similar, new model. The maintenance cost of a used car had never come close to the amount of depreciation that a similar new model would experience.

Even in the case of my daughter‘s 2002 Volvo, where she pays a shop to fix it, her average cost per year for maintenance and service is under $1500. Not even close to the losses and depreciation of buying new.

Again, do not be fooled by recent car prices, and depreciation values, because they are a large perturbation/disturbance outside of normal trends. Depreciation on a new car is generally high, and always will be. Driving used will greatly reduce that cost.

So, if you’re not able to change your own oil and you’re not able to repair or maintain a car, then perhaps new is more convenient.

So comment really depends what you mean by “sense”. If by “sense” you mean cost money, then no, new never makes sense. Used is cheaper.

If by “sense”, you mean, convenience and reliability, then there are a lot of arguments in favor of new.

 

[JeffKeryk]

I see a lot of people who hate payments; so do I! And that interest add up!
Perhaps turn the tables... Drive what you have and make payments to yourself. Then when it comes time to buy, go in with a huge down or even cash. Pay yourself first!

 

[Elkins45]

I had never purchased a used car until 2021, but I had purchased a few used boats and used tractors. Used always made sense to me for stuff you didn’t rely on for your livelihood, but I always liked having a car that I thought I could depend on.

Like a lot of people my attitudes were heavily influenced by my parents. They always bought new cars and drove them for 10 years then bought another. My dad always said “If I’m going to drive someone’s used car I’d rather it be my own.”

Now I’m heavily considering buying one more used car just because I want to get something without all the mandated electronic stuff.

 

[Nick1994]

I see a lot of people who hate payments; so do I! And that interest add up!
Perhaps turn the tables... Drive what you have and make payments to yourself. Then when it comes time to buy, go in with a huge down or even cash. Pay yourself first!

That’s what I’ll be doing. The Genesis is almost paid off, could pay it off now it’s only $2,600 but the interest is real cheap right now. Once it’s paid for I’ll be stashing for a car fund. Could be the next car is paid in full and a little used, or new with low payments.

Might be buying my first house next year so car payments don’t really appeal to me right now.

 

[Astro14]

I see a lot of people who hate payments; so do I! And that interest add up!
Perhaps turn the tables... Drive what you have and make payments to yourself. Then when it comes time to buy, go in with a huge down or even cash. Pay yourself first!

That’s our plan, actually.

Haven’t had a car payment in a very long time. I’ve only bought two new cars in my entire life.

But a new car has its attractions: optioning, overseas delivery in the case of the brand we are considering, lower maintenance, better fuel economy.

And I’m interested in all of those, but particularly in lowering my time spent on maintenance. I’ll like to get back some of my time to focus on woodworking.

So, new.

 

[Exhaustgases]

Where things come off the rails is buying a $70,000 pickup truck when you are only hauling air with it.

Right on especially when most all new pickups are basically a big station wagon with the rear cover cut off, you know little tiny 6 or so foot beds that cann't haul much, not even a sheet of plywood oh and 4 doors just like a station wagon.

Oh and a car can be a huge investment, just not the average garbage vehicles that are made now. Go price a GT40.

 

[Sam_Julier]

I made payments on my first car, a 1978 Dodge Omni. I paid the car off in just under a year working as much OT as I could at a paper mill in Mobile Alabama.

After that I bought new and certified pre-owned cars with cash. Always the end of the month.

I have always done basic maintenance. Now I do 80% of it.

My signature shows our current cars, all of them fully depreciated and meticulously maintained.

 

[ZZman]

Of course used makes sense over new. Who can afford $ 40,000-80,000 vehicles?

 

[Torrid]

I've never purchased a new car, and I may never do so, but this is due to the fact that I do all my own repairs, and I'm fully aware that puts me in a different scenario than most. Further, cars are liabilities not assets, everyone knows this. Now, don't get me wrong, with creative accounting, the liability and associated costs of car ownership can be mitigated, but that process does not apply to me because our household income is below the overall average. What I can say though is, I've always been a saver, and financially responsible, I don't window shop. Finally, just because I can buy a new car, which I can (but nothing exotic), doesn't mean that I should, I have other priorities in my life (education, home ownership expenses, etc.)

Unfortunately with the time I have as much as I wanted to keep working on cars it wasn't feasible. I sometimes drive out of the state for work and breaking down in a spot that makes me not make work is a liability big enough to lose my job if it happened more than once in short order. I'll definitely miss wrenching, but if I ever find the time and the spot to keep it, I'll have an older toy to play with that I don't have to rely on.

My creative accounting is not getting fired. Then again the job is what allows me to buy new cars. I didn't have many new cars before this and one of them, my first new car was $16k 20 years ago.

 

[GSCJR]

I know I mentioned this to you before, enjoy your new ride @Torrid!

 

[ecotourist]

I sometimes drive out of the state for work and breaking down in a spot that makes me not make work is a liability big enough to lose my job if it happened more than once in short order.

There is something to be said for having at least one dead nuts reliable vehicle. Imagine your doctor explaining that he missed attending your baby's delivery "because my old car just wouldn't start."

 

[Cruisin'n5thgear]

I use a similar process. My consensus is buy new or 10 years old. The middle seems like a waste of money. However I am fortunate that the up front purchase price is irrelevant to me.

Having said that, my young daughters will get used cars. I am factoring the likelihood of running into things into the equation.

Agreed on all points. Hoping to have one or two vehicles to pass off to the youngsters when their time behind the wheel rolls around (pun intended).

 

[joekingcorvette]

When it comes to buying Corvettes used is the best way to go. There are tons of low mileage babied Corvettes for sale that have never seen rain much less snow and salt. On the other hand the 2024 Toyota RAV4 Hybrid was about the same price brand new as the used ones were selling for so brand new it was. My daily driver Honda Civic was a certified used car with 35,000 miles when I bought it and is now a almost 149,000 miles. My Ford truck was a light front end and was a rebuilder and I saved tons of money on that one. The Honda 2020 Monkey was bought brand new and they were very hard to find at that time. My boat I purchased previously owned because new Lund Tyee's are so expensive and they depreciate quickly. Wants, needs, and money are what a person has to work with when buying a vehicle. There is no one size fits all.

 

[Dave Hess]

Most Corvette owners are older and not using it for daily driving.

Yes, they depreciate quickly even though original owner thinks their Corvette is made of GOLD.

 

[Dave Hess]

That’s what I’ll be doing. The Genesis is almost paid off, could pay it off now it’s only $2,600 but the interest is real cheap right now. Once it’s paid for I’ll be stashing for a car fund. Could be the next car is paid in full and a little used, or new with low payments.

Might be buying my first house next year so car payments don’t really appeal to me right now.

Focus on saving to buy a house.

You and your wife can drive current vehicles for another 100K miles.

 

[Dave Hess]

I buy new.

Don’t want to look a 5 used vehicles that have some things that annoy me like interior scratches, stains on seat, cigarette or perfume smell, wheels with curb rash, etc…

Some people are asking unrealistic prices for used vehicles.

I recently placed an order for a 2025 Subaru BRZ Limited.
Red with 6 speed manual transmission.
No optional $7000 Glitter & Glam package…. just the basics.

Very difficult to find a used BRZ that’s not modified or the interior stinking of Vape Pen.

 

[69GTX]

I've been beating this drum since 2011, mainstream (exclude luxury brands) don't depreciate at a rate that make buying used worth it. A vehicle 6 years old with 100k on it going for 50% of MSRP? No thanks, I'll take the first half of the vehicle's life, not the second half.

For the past 23 years I've bought luxury domestic cars with 20K-40K miles, at 4-16 yrs old, when they were at 1/3 to 1/10th of MSRP.
That's still very early in the life cycle. Cars in question were 1997-2002 Lincoln Continentals. So after 3 of them in a row I'm pretty used to them. Current one I've taken from 39K miles to 72K miles in 6.5 yrs.....initial purchase price was $3700. With maintenance I'm into this one at approx $7,500....or approx $600 per year. With insurance it's about $1200 per year. If I can find a 4th one in the next couple of years with really low miles.....I'll do it one more time. The previous 2 cars I took from 29K to 212K miles (pd $5K)....and 22K miles to 83K miles (pd $9K). I'll never do that 100K-200K miles again as that car cost me a lot in maintenance the final few years. These particular cars have a $1500 maintenance schedule at the 100K-120K mile point....which I prefer not to do. Sell well before 100K miles at let the next owner do it all.

Prior to doing Lincolns, I did Crown Vics and Mercury Grand Marquis from 1986-2001. The only flaw with those cars was transmissions often failed too early. Got them with 50K-60K miles. In retrospect, should have gotten them with half those miles before owners put too much wear and tear on the transmissions.

 

[Sam_Julier]

I just sold a 1991 Volvo 240 sedan that my mechanic and I restored for $12,000. Zero rust, impeccable condition, all records since the purchase document, California car. 236,000 miles.

The new owner, a master wood worker, is thrilled. He said he will never buy a new, modern car.

There is a strong market for simple to maintain, reliable cars.

 

[dlundblad]

I think a key to the used vs new debate is how long one plans on keeping the vehicle.

Buying new every few years will result in a bath. Used less so. If you plan on keeping long term, get what your you want and buy it new.

 

[KrisZ]

I’m pretty sure the 2021 pricing is not correct in the OP. People overpaid the MARPs by a lot, which makes the calculation very tricky since we don’t know the transaction prices, only the MSRP.