Please help sort my thoughts about buying a new car.

[jstert]

very useful thread that should spark lots of fresh ideas for o.p. (and me) to ponder.

i wonder if the more recent edition of the nissan cvt is ok with a regular fluid change? cvt aside, nissan offers a variety of comfortable, non-speed-demon, vehicles in all size segments.

selling to a young relative a still-decent, ten year old, car isn’t helicoptering, its being kind and loving. owning an older car will come with lifetime teaching moments on car care that are too easily avoided with a new car.

 

[BMWTurboDzl]

Depreciation is irrelevant when you own. It's irrelevant because a new car warranty has value and you're in it for the long haul.
So what if you have to finance for 12 - 24 months.

 

[PimTac]

Depreciation is irrelevant when you own. It's irrelevant because a new car warranty has value and you're in it for the long haul.
So what if you have to finance for 12 - 24 months.

Yep and the key thing is to own the vehicle long term. The ones that get eaten alive by depreciation are those that trade in for new ones every few years.

 

[leadcounsel]

Depreciation is irrelevant when you own. It's irrelevant because a new car warranty has value and you're in it for the long haul.
So what if you have to finance for 12 - 24 months.

Say what?

Um, no. Depreciating is very important. First, vehicles that don't hold value well, are generally for a reason. So that reflects the overall opinion of the quality, and why certain vehicles hold value much better than others. Next, in a pinch or emergency, higher value will bring more money, sorta obvious. Third, the economic value will often factor into whether an expensive repair is worth the investment.

Purchase a new vehicle, take a 20% depreciation, and 6 months later lose your job, or life circumstances, move overseas, inherit a car, etc. and no longer need it. Bang you lost $10 grand on a $50,000 car. Seen it happen several times in my life.

I've never heard anyone seriously say that depreciation is irrelevant. It's extremely relevant.

Not to mention, everything is more expensive on a NEW car, taxes, insurance, registration, etc. which will about equal the cost or cost more than buying a 2 year old car at 25% less, and a private warranty if you chose.

 

[paulri]

That is good advice. I would also recommend you investigate, if there are such restrictions, what exemptions are made and how to get one. My daughter goes to a university that insists that freshmen live on campus, but generally doesn't give parking permits to them, either. She is working several miles off campus, and uses the Camry to get there & back, so she got an exemption.

If your daughter gets the Fusion or any other car and is going to university, check the rules there, especially for freshmen. At some unis freshmen weren't allowed to have cars on campus and their vehicle was kept in a holding lot off campus. This was mainly because freshmen were required to stay in an on-campus dorm for that first year to reduce distractions and partying.

That was Virginia Tech 40 years ago, but some unis probably still have similar rules.

This means that your daughter's car could sit a lot, either in a holding lot or at home.

This is a side issue to the OP's question, but I thought it was worth mentioning.

About the Toyota Corolla Cross, it is built in the same new Alabama plant as the Mazda CX-50. The two share a roof panel, but nothing else. The CX-50 comes with AWD. You might want to give it a look, especially since new-car supply is improving.

 

[supton]

Purchase a new vehicle, take a 20% depreciation, and 6 months later lose your job, or life circumstances, move overseas, inherit a car, etc. and no longer need it. Bang you lost $10 grand on a $50,000 car. Seen it happen several times in my life.

That's good advice, but then one would never sign a year long lease on an apartment, nor drop a down payment on a house either. For fear of the unknown.

For many people, not having a car means they can't get to a job interview. While it might be foolish to buy new, not having a car is not an option. Thus buying new, and then very quickly job hopping if one happens to be walked out the door unexpectedly, might mitigate this fear--although one should not be buying outside of their level in life (if you make $50k/yr, buying a $50k car is not a great idea--but if your nominal income is $250k and you're buying $30k base models...).

Everything is a risk in life. How much do you want to gamble? 50% of marriages end in divorce, and 100% of cars will wear out, most within the owner's lifetime.

 

[Danno]

My job is used cars. I appraise hundreds a year. Never see RAV4 hybrids come in on trade. I do see CR-Vs quite often.
I drive everything as a used car. I own a '19 Toyota RAV4 Hybrid Limited. That package is strong in its category. The gas only version is not in the same powertrain class.
No hesitation in recommending the RAV4 Hybrid as top in class, and if you need to get out of it, should hold its value.
Go new and enjoy.

 

[leadcounsel]

That's good advice, but then one would never sign a year long lease on an apartment, nor drop a down payment on a house either. For fear of the unknown.

Yah have to live somewhere, and housing is generally far less "liquid" than cars. Meaning, for established people it's more challenging to move, and all that goes with it, esp. if a house sale/purchase is involved. A far bigger "investment" in most facets than a car choice. Housing also I think represents around 25% of ones' budget. Vehicles should be how much, 5-10%? 15% max?

Every smart financial person says to buy a home, intelligently, as soon as possible and pay it off as soon as practical.

Housing is generally considered an appreciating asset, or sorts. Longer time horizons, with renting being viewed as slightly more expensive than owning, but with the large conveniences of less maintenance costs and more flexibility. Renting offers 6-12 month leases, and usually can be broken with a 10% fee.

Cars, yeah most of us need transportation. Big difference between new and used though. Every intelligent financial person says to almost never buy a new car absent unusual circumstances. Buy a 5-10 year old well maintained low mileage vehicle and pay cash if possible.

 

[SC Maintenance]

In 2008 I was exactly where you were - never buying a new car ever. But in 2008 there were some great deals because a lot of traditional buyers were laid off or couldn't get financing. I needed a car and I bought my first new car. It didn't cost much more than a used one.

Best decision I could have made. I still have it, and bought 2 more new since then. If your keeping it forever, might as well get exactly what you want up front, and know the service history.

As for what - they all have fleas now it seems. We actually have a Rav4 - bought new in 2019 - ICE/FWD. Its fine for us but it only has 30K miles so far, hence hard to make any predictions. I am not sure PFI+GDI is a complete cure for intake valve carbonization, but it probably will help. It does have an 8 speed trans, and the torque converter locks in every gear. It gets great gas mileage, but nothing in life is free and my bet is you end up with torque converter problems in the end. Guess I will see.

As fate would have it - I will likely give that Rav4 to one of my daughters when they graduate college. The plan is to buy another one like it.

 

[NismoNVT]

very useful thread that should spark lots of fresh ideas for o.p. (and me) to ponder.

i wonder if the more recent edition of the nissan cvt is ok with a regular fluid change? cvt aside, nissan offers a variety of comfortable, non-speed-demon, vehicles in all size segments.

selling to a young relative a still-decent, ten year old, car isn’t helicoptering, its being kind and loving. owning an older car will come with lifetime teaching moments on car care that are too easily avoided with a new car.

Nissan is doing the best they can with very limited resources and I applaud them for that. That being said, having seen the quality of their products decline during the Ghosn era, even with this new direction I rather not recommend that to anyone. If you are leasing AND are able to take up one of their really enticing 18 month leases I'd pick nissan, but for a long term owner please skip.

 

[supton]

Yah have to live somewhere, and housing is generally far less "liquid" than cars. Meaning, for established people it's more challenging to move, and all that goes with it, esp. if a house sale/purchase is involved. A far bigger "investment" in most facets than a car choice. Housing also I think represents around 25% of ones' budget. Vehicles should be how much, 5-10%? 15% max?

Every smart financial person says to buy a home, intelligently, as soon as possible and pay it off as soon as practical.

Housing is generally considered an appreciating asset, or sorts. Longer time horizons, with renting being viewed as slightly more expensive than owning, but with the large conveniences of less maintenance costs and more flexibility. Renting offers 6-12 month leases, and usually can be broken with a 10% fee.

Cars, yeah most of us need transportation. Big difference between new and used though. Every intelligent financial person says to almost never buy a new car absent unusual circumstances. Buy a 5-10 year old well maintained low mileage vehicle and pay cash if possible.

I figure, I lost six figures on my first home. Oops on my part. But they don’t always appreciate, fer sure. And at the moment, both cars and housing are in the nutso pricing area.

For a long time, 5 year old cars, especially in the rust belt, were not great deals, not on a cost per mile basis. Worse, the 10 year old ones have two wheels in the grave, so to speak. Yes, pay cash for well used. But thats like the advice for the stock market, buy low and sell high. Great when you can time a good deal.

 

[NismoNVT]

Yah have to live somewhere, and housing is generally far less "liquid" than cars. Meaning, for established people it's more challenging to move, and all that goes with it, esp. if a house sale/purchase is involved. A far bigger "investment" in most facets than a car choice. Housing also I think represents around 25% of ones' budget. Vehicles should be how much, 5-10%? 15% max?

Every smart financial person says to buy a home, intelligently, as soon as possible and pay it off as soon as practical.

Housing is generally considered an appreciating asset, or sorts. Longer time horizons, with renting being viewed as slightly more expensive than owning, but with the large conveniences of less maintenance costs and more flexibility. Renting offers 6-12 month leases, and usually can be broken with a 10% fee.

Cars, yeah most of us need transportation. Big difference between new and used though. Every intelligent financial person says to almost never buy a new car absent unusual circumstances. Buy a 5-10 year old well maintained low mileage vehicle and pay cash if possible.

I agree with your sentiment, but I also believe car buying should not be a one size fits all type of decision. In a market where used car values are highly inflated, buying new might line up to be a better deal in the long run. Again one has to run comps, do the necessary due diligence to come to a conclusion.

Finally, finding a low mile, well maintained vehicle 5-10 year old vehicle might not be as easy for some. Most rely on the selling party for condition reports, dont understand the importance of a PPI. Others dont understand that a used vehicle doesnt come from refurbishment factory, so some minor issues are normal etc. Lastly, financing an older vehicle isnt as easy as a new vehicle (cash is king of course, but not everyone can make that commitment even though they need a car).

 

[leadcounsel]

I agree with your sentiment, but I also believe car buying should not be a one size fits all type of decision. In a market where used car values are highly inflated, buying new might line up to be a better deal in the long run. Again one has to run comps, do the necessary due diligence to come to a conclusion.

Like I said it's normally not a good decision to buy new absent unusual circumstances. Right now, I would honestly wait about 6-9 months to look at new. I think we'll see the entire market slashing new prices probably 20% due to depression. Cash will give a buyer a lot of negotiating leverage.

Finally, finding a low mile, well maintained vehicle 5-10 year old vehicle might not be as easy for some.

Used car prices were inflated probably 50% circa 2001-2002. Now, I'm seeing a return to normal 2019 adjusted prices. We're still about 10-20% inflated but it's coming down. There is growing inventory on internet markets and vehicles staying longer. I think in 6 months prices will have dropped significantly. Also, driving habits were cut by probably 25-50% since 2020. I know mine were, and many others. From about 14k annually to about 10k or less. Lots of parking cars and tele-working. MILLIONS of low miles relatively new cars on the used market.

With prices crashing and very low mile examples on the market, it's actually approaching an ideal time to buy used IMHO.

 

[macarose]

Hi there. My name is Steven Lang. If you Google my name and add the word 'cars', you'll find out that I have lived the used car business for well over two decades now.

Here's a study I co-developed which has over 3 million vehicles in its database. Mechanics from Connecticut to California have been inspecting and providing data for our study since 2013.

https://www.dashboard-light.com/

I have two children in college right now, both with scholarships, ages 22 and 20. They don't have cars. The younger one lives off-campus and the other lives on-campus. Neither had any trouble getting transportation for job interviews, medical appointments, or even get togethers with friends or events that were located away from school.

I have owned a car dealership since 2003. If they needed a car or asked for one, they would already have it. As a dealer my only real costs would be for gas and insurance. But they don't want a car because they don't need one. Nearly all colleges and universities have vast transportation services these days and a lot of college organizations will also gladly furnish free transport when needed.

Unless your daughter attends a commuter school I seriously doubt she will need a car until she has a professional full-time job. Now onto your list.


"I am considering a Corolla Cross (CC) or RAV4, an HR-V, or a Crosstrek."

Congratulations! You have nailed the four most overpriced compact vehicles in today's car market! The HR-V experienced transmission issues in its prior generation. Toyota's quality and relaibility has dropped across the board, and Subaru is consistently at or below average when it comes to long-term quality.

The real elephant in the room though is your Fusion. It's the last reliable generation. The 2.5 Liter in particular is stellar. The transmission in yours will actually outlast the ones from the 2012 Toyota Camry with proper care. It's that good.

The EV market is going to be absolutely decimating the gas car market beginning around late 2024. You won't have any trouble finding a stickshift model that is new or late model. Mazda is particularly fantastic.

I would invest about $2000 into your Fusion. A nicer Infotainment system. New struts and tires. A professional detail, and a drain/fill on the transmission (if you have done this once or twice in the past) will all go a very long way towards making the Fusion fun to drive... again.

Good luck. Enjoy life. And as others here have already mentioned, new gas-powered cars are atrocious values right now. But that will change soon enough thanks to Uncle Sam's $7500 EV giveaway and all the major manufacturers building large armies of them in the very near future.

 

[ATex7239]

I think you have some good picks there. I’d be leaning towards the RAV4 though.

If you want a new vehicle I say go for it given your financial situation can reasonably handle it. Some may caution against it because of depreciation or future economic uncertainty. But you know what life is uncertain. You could be here today and gone tomorrow. Money is a tool used to live, it is not life. It doesn’t sound like you’re a frivolous guy. It’s perfectly ok to spend a little money and enjoy yourself.

 

[JavierH19]

Why does everyone want to buy a car when the market wide bubble pop is around the corner. Honestly just wait it out a little more.

And if you want a good affordable little suv the Nissan kicks wont disappoint. The cvt isn't bad, people just don't service them and also drive them like they stole it. I know a guy with almost 300k on his Nissan cvt since he services it.

 

[BMWTurboDzl]

Say what?

Um, no. Depreciating is very important. First, vehicles that don't hold value well, are generally for a reason. So that reflects the overall opinion of the quality, and why certain vehicles hold value much better than others. Next, in a pinch or emergency, higher value will bring more money, sorta obvious. Third, the economic value will often factor into whether an expensive repair is worth the investment.

Purchase a new vehicle, take a 20% depreciation, and 6 months later lose your job, or life circumstances, move overseas, inherit a car, etc. and no longer need it. Bang you lost $10 grand on a $50,000 car. Seen it happen several times in my life.

I've never heard anyone seriously say that depreciation is irrelevant. It's extremely relevant.

Not to mention, everything is more expensive on a NEW car, taxes, insurance, registration, etc. which will about equal the cost or cost more than buying a 2 year old car at 25% less, and a private warranty if you chose.

Say what?

Um, no. Depreciating is very important. First, vehicles that don't hold value well, are generally for a reason. So that reflects the overall opinion of the quality, and why certain vehicles hold value much better than others. Next, in a pinch or emergency, higher value will bring more money, sorta obvious. Third, the economic value will often factor into whether an expensive repair is worth the investment.

Purchase a new vehicle, take a 20% depreciation, and 6 months later lose your job, or life circumstances, move overseas, inherit a car, etc. and no longer need it. Bang you lost $10 grand on a $50,000 car. Seen it happen several times in my life.

I've never heard anyone seriously say that depreciation is irrelevant. It's extremely relevant.

Not to mention, everything is more expensive on a NEW car, taxes, insurance, registration, etc. which will about equal the cost or cost more than buying a 2 year old car at 25% less, and a private warranty if you chose.

ROFL

If one has to worry about depreciation because they might need to sell the car in a pinch they have some very serious financial problems.

They might as well be living in a tent or their parents basement.

 

[AZjeff]

Funny, he absolutely didn't ask for financial advice but he got lots of it. Why not give him the benefit of the doubt that he thought it out?

AJB it looks like you're a Ford and Toyota guy. Ford has nothing for you and Toyota doesn't have a CUV with an MT but the RAV has a real trans not a CVT. FWIW my daughter has had a 2015 CX-5 since new and it's been flawless. It looks like they still has the same 2.5 (DI) engine and 6spd auto but now has cylinder deactivation. Is the stick important enough to go to an unknown brand? RAV/CX-5...Crosstrek...CRV unless stick mandatory.

 

[Skippy722]

ROFL

If one has to worry about depreciation because they might need to sell the car in a pinch they have some very serious financial problems.

They might as well be living in a tent or their parents basement.

Can’t live in a tent, those will depreciate as well.

From OP’s list I’d get a new RAV4.

 

[JHZR2]

Say what?

Um, no. Depreciating is very important. First, vehicles that don't hold value well, are generally for a reason. So that reflects the overall opinion of the quality, and why certain vehicles hold value much better than others. Next, in a pinch or emergency, higher value will bring more money, sorta obvious. Third, the economic value will often factor into whether an expensive repair is worth the investment.

Purchase a new vehicle, take a 20% depreciation, and 6 months later lose your job, or life circumstances, move overseas, inherit a car, etc. and no longer need it. Bang you lost $10 grand on a $50,000 car. Seen it happen several times in my life.

I've never heard anyone seriously say that depreciation is irrelevant. It's extremely relevant.

Not to mention, everything is more expensive on a NEW car, taxes, insurance, registration, etc. which will about equal the cost or cost more than buying a 2 year old car at 25% less, and a private warranty if you chose.

Lots of assumptions there though.

Some vehicles are horrible values when buying used. We got our odyssey new for about the same price as a used one. Yes we got a good deal, but the concept that a car is only worth x% when it rolls off the lot isnt necessarily true.

Sure, sales tax is more Sometimes registration too, But often the per mile cost until a repair cost is due isn’t that much different,