Is it economical to buy new?

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Originally Posted By: Miller88
Around here used cars are more expensive than new cars.

Example: 2011 Aveo new $10000. 2011 Aveo with 50K miles $12000.

2011 focuses are selling for MORE than I paid for my 2011 focus new.


Aveo's are for suckers and sad to say won't appeal to car savvy and likely get snatched up by someone who does know better. GM embarrassment that affixed their badge on that thing(rolling poo).

My guess they end up on buy here pay here lots were you go to get a car that works.
 
I think you end up paying about the same in the long run, but new has some advantages and with the economy and jobs situation there is more competition for used cars and new cars have better financing. I would recommend new if you can afford it. Used if you can't but you will be nickeled and dimed over the years.
 
Personally I feel that used cars are overpriced right now. A 20% savings to take a 2 year old car with 40k on it? Not worth it for me.

People will then add on an extended warranty because it is used, taking the savings down to 10%. They are probably paying a higher interest rate, and at that point they paid new car price for a used car.
 
Originally Posted By: johnachak
The newer GM's all carry 5 yr 100,000 mile power train warranties.


Not all GM's come with the 5 year 100000 mile powertrain warranty any more. Cadillac and Buick have lengthen the years to 6, but have reduced the miles to 70000. In your case that would be more beneficial driving only 8000 miles per year.

Chevrolet, GMC, etc still have the 5 year 100000 mile powertrain warranty.
 
If I buy a new 2015 Forester for 24,500 in cash and drive it for 10 years then sell it with 80,000 miles for $11,000 without ever having to make a single repair other than basic maintenance then it cost me 1360 per year including additional maintenance charges.

If I buy a 2005 Forester with 50,000 miles on it for 12,000 and drive it for 10 years selling it at 130,000 miles for 5,000 and make 1,200 in additional repairs, that's 820 per year.

But if you factor in the getting 13mpg instead of 17 mpg (I get poor mileage due to short trips in cold weather) it makes a difference of $463/year. This increases the used car price to 1283.35 per year.

Of course this is very general and assumes very good luck from either choice in terms of reliability.

Of course there's all ways the third option in which you gamble with an old high mileage vehicle for a few years then sell it for virtually the same price you bought it for.
 
What's the peace of mind/lack of down time on repairs worth to you with a new car?

It sounds like either of the choices will last the miles and time frame you want - probably somewhat of a toss up since random repairs might be needed that drive savings for either situation.

Personally, I like the "worry free" miles with our (now not so) new car, especially since it sees 100 mile round trip a day. As others have said, nice to know the history, and it's a safer assumption you're not going to have an issue. But I look at the monthly car payment and it's a frustrating comparison in cost given what we paid for the other two cars we have.
 
I'm looking at getting the wife a CPO Lexus. You can get a 2011 with 30k on the clock for about $15k less than a new one.

Do the math on the cost of those first 30,000 miles. Then we will drive it to 200k and trade it in for about $6000. So the cost for 170,000 miles will be about $20,000.

Chase auto finance just approved me for 2.13% if I need financing.
 
Originally Posted By: Tdbo
Wait until November-December of 2014 and purchase a leftover 2014 when the 2015's are out.
Use used book for a 2014 as your pricing target.
Get a new year old car with no miles and full warranty for the same price (or less) than a year old used one.
Best of both worlds.


+1, sounds like a good idea.
 
Assuming you have the means and intend to keep the car for awhile: Buy new. Lower trim level is almost always the better value. I don't think its even particularly a close call. New car gets cheaper financing (even without the dealer come-ons) and gets bette mileage.

Before the bust it was completely different. You could buy 5-6 year old luxury cars for a song. Those days are over for the time being.
 
Originally Posted By: whip
If you drive 8,000 miles a year, and vehicle bought with 50,000 will last you 10 years. That's less than 150,000.


This century's cars with 100k miles are last century's 50k car...
...and I agree that if you drive few miles a year, say 10k miles, then buying a 6-7 yr old car with 90-100k (~ 3-4yr/50k from last century) will last another 7-10 years to 200k miles with care and cost far less after 15 years than the same car bought new...if you can stand a to look at a 15yr old car for so long...you better like it!

I will admit that this is less possible up north where the body and suspension parts are more vulnerable to winter-induced damage...but south of the Tennessee-Kentucky border is Shangri-la for cars...
 
Buy that which you can afford to pay cash for, either new or used. Financing (or worse yet, leasing) is for those who live outside their means and don't have the self discipline to live without perpetual monthly payments.

And that "zero percent financing"? It's used to bring buyers into dealerships, and they often buy more vehicle than they originally planned, or the price isn't as low with zero percent financing. The reality is that there's no such thing as "free" financing; you'll pay for it in different ways, but make no mistake-you will pay for it.

To top it off, if you can't afford a vehicle without making payments on it, ask yourself if you really want to be a slave to years of payments just to have that new shiny bauble.
 
Originally Posted By: johnachak
Originally Posted By: Tdbo
Wait until November-December of 2014 and purchase a leftover 2014 when the 2015's are out.
Use used book for a 2014 as your pricing target.
Get a new year old car with no miles and full warranty for the same price (or less) than a year old used one.
Best of both worlds.


+1, sounds like a good idea.


Tdbo and I both did this in November 2012 and we both ended up with screaming deals on new '12 Accords.
Honda even offered .9% financing, which was just too good to pass up. Why should I give up cash when I can finance for almost nothing?
That the '12 was the last year of that generation Accord certainly helped.
 
It depends on what you do with it, and your financial situation. We bought ours both new since they got better MPG than anything else in their classes at the time, used cars were astronomically priced in our area, we got great financing terms, and we could afford the monthly cashflow. Now we're planning on keeping them for 10+ years, maybe longer.
 
Originally Posted By: Pop_Rivit
Financing (or worse yet, leasing) is for those who live outside their means and don't have the self discipline to live without perpetual monthly payments.

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"Economical"? It's pretty rare that any type of vehicle purchase could be considered "economical".

That being said, I seem to do just fine on finding ~ 2 year old cars with < 20k on them at $10k - $12 off original pricing. I will never reach a point where I even put half that into additional maintenance on the cars.

My last used car loan was 2.74%, so it was only a few hundred dollars of interest.

But again, it's a bad financial decision almost every time.
 
Originally Posted By: 99Saturn
Originally Posted By: Pop_Rivit
Financing (or worse yet, leasing) is for those who live outside their means and don't have the self discipline to live without perpetual monthly payments.

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+2
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Originally Posted By: Pop_Rivit
Buy that which you can afford to pay cash for, either new or used. Financing (or worse yet, leasing) is for those who live outside their means and don't have the self discipline to live without perpetual monthly payments.

And that "zero percent financing"? It's used to bring buyers into dealerships, and they often buy more vehicle than they originally planned, or the price isn't as low with zero percent financing. The reality is that there's no such thing as "free" financing; you'll pay for it in different ways, but make no mistake-you will pay for it.

To top it off, if you can't afford a vehicle without making payments on it, ask yourself if you really want to be a slave to years of payments just to have that new shiny bauble.


Have we had our anti-pompous pills today or not? I'm guessing not.
You say "buy what you can afford," I'll agree with that.
However, you can buy a car that you can afford, and not pay cash. As FDCG outlined in the response after your diatribe both he and myself both bought new 2012 Honda Accord LX-P's within in a month of each other. I know what he paid because I got a quote from the same Cincinnati dealership where he bought his. My price is posted on these very forums. I bought mine from a Honda dealership in Northeastern Ohio and I got the color that I wanted, and a Spoiler, Mudflaps, and side moldings for $150. more because the dealer had them already on the car. Both were stellar deals, FDCG's deal was minimum profit, on mine the dealership took a loss because of the add ons on the car.
There was ABSOLUTELY NO WAY that either of us were going to walk away with a better deal on our respective vehicles (I crunched numbers on both deals.)

Honda, as a factory to dealer incentive offered $1750. on any leftover '12 Accord. WE BOTH GOT ALL THAT $$ TO GET THE CAR FOR PRICES THAT WE PAID. To sweeten the deal, Honda offered .9 financing on any new '12 Accord. There was NO MORE MONEY thrown on the hood of these cars had we declined the incentive. Therefore, IMO that is basically free money. FDCG can explain his rationale for financing if he wants to; however, I will explain mine. I keep six months income liquid, and have the rest invested. To avoid depleting my contingency fund and to save capital (that made 16.8% in the past year), I put enough downstroke on the car that I could very comfortably cash flow the purchase out of salary. The cost for four years for borrowing this money is $275.00. For that sum, I have saved 13.4K in investment capital that is yielding 15.9% (16.8%-.9%= 15.9%)

I'll toss you a bone however. Leasing CAN be a bad deal if used improperly. It is a tool that can be useful in certain circumstances (business, etc.) However it can be a poor deal if utilized as a means to purchase a car that one cannot afford otherwise.

Financially irresponsible people make poor decisions and amass debt that is beyond their means. Using credit in a responsible manner to achieve solid financial objectives is prudent. Go gnaw on that for awhile.
 
I generally agree with the sentiment that if you can not afford to pay cash for a car you simply can't afford it. This doesn't mean that it isn't smart to finance anyway, assuming you can get fair terms. But if you save such a small amount of your paycheck that you couldn't cover the purchase of a vehicle if financing was not an option, maybe you shouldn't be purchasing that new vehicle.
 
Originally Posted By: SevenBizzos
"Economical"? It's pretty rare that any type of vehicle purchase could be considered "economical".

That being said, I seem to do just fine on finding ~ 2 year old cars with < 20k on them at $10k - $12 off original pricing. I will never reach a point where I even put half that into additional maintenance on the cars.

My last used car loan was 2.74%, so it was only a few hundred dollars of interest.

But again, it's a bad financial decision almost every time.


+1 But understand that most of the people who think that any vehicle is an "investment" do not understand the difference between depreciating assets and real property. Lots of people on here have not had that level of education or life experience to understand the difference. They also don't understand that financing is a tool and not just a burden or any indication of how much someone can "afford".
 
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Originally Posted By: Mykl
I generally agree with the sentiment that if you can not afford to pay cash for a car you simply can't afford it.


You really need to change your thinking.
 
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