Financial incentive - New vs Used vehicle

[BearZDefect]

I have never needed AWD in rain.

And what complication with AWD? Another two differentials, and more drive shafts add up to more weight, more friction, and more parts to break, more seals to leak, etc.

 

[pandus13]

Originally Posted By: IndyIan
Originally Posted By: Vikas
Replace the tires on your current vehicle and don't look back.

+1 Go with a decent snow tire a size narrower and one taller and you'll fishtail much much less. A subaru will fishtail under the same conditions as your Sentra with 3 season tires anyways. All the AWD "magic" only happens when you are on the gas, which was not when your sentra was fishtailing.

OP,
also consider used winter tires if money is tight. look for at least 60% thread left.
also this will buy you time to look for deals if new-car virus is really-really catching.

 

[Quattro Pete]

Originally Posted By: pandus13
OP,
also consider used winter tires if money is tight. look for at least 60% thread left.

A little bit OT, but while I generally don't mind buying used stuff, winter tires is just not one of them, unless almost new.

Realistically, winter tires stop being effective when their tread gets half worn, so if you buy tires with 60% tread left, you have effectively bought tires that have only about 10% (or 20% of the useful 50%) of their useful tread still remaining.

Then there is age - soft winter rubber hardens over time, so even though there may be tread left, the compound isn't pliable enough to provide proper winter/snow grip. Been there, done that.

 

[threeputtpar]

At this point in time, new is almost always better than 1-2 year old vehicles of the same make and model. When you throw in the fact that in-house financing is likely under 1%, you'd be even better off financing more than half all the way up to 100% and parking the 50% cash you would have paid in anything other than a savings account.

I did almost the same thing as you when we bought our Ody. HFS offered 0.9% for 60 months, but I still paid cash for over 50% of the purchase. I'm now wishing that I'd held onto that cash and put it in at least a money market account. For the full amount of the purchase @ 0.9% it would have been only $800 in interest. Heck, I could have put my money somewhere and made more than $800 in 5 years on my own.

 

[D189379]

Here's my advice to anyone on this issue.

If a vehicle has a large depreciation, buy 1-2 year old used.

If a vehicle has a low depreciation, buy new.

I think cherry picking a used 1-2 year old reliable vehicle, from a brand which is known for hit or miss/spotty reliability and large depreciation, is the best value option for anyone keeping a vehicle for at least 5-7 years.

 

[supton]

I still worry about buying 1-2 year old. Why did they trade in? I'm sure some people decide that it doesn't fit their needs, or they hate xyz about it. But I have to wonder (% wise) how many are problem cars.

Then again, perhaps I'm just worrying about nothing. Maybe there really are that many people in this world who trade that often.

I'd agree otherwise. 1-2 year old seems like a bad deal, unless if it's wicked high depreciationj. But if you have to wait until 4-5 is it any better? I mean, let's look at what I keep looking at. Buy something at 50% off, say 5 years old, around 100k on the clock. Is it a good deal? I'll put another 100k on it in the next 5 years, and at 10year old / 200k is it not close to the end? Have I saved very much over buying new and getting 10 yr / 200k myself? [Sure, I save on insurance and registration, but that cost could be swayed by "but I know that every bit of maintance was done on time".]

 

[pandus13]

Originally Posted By: Quattro Pete
Originally Posted By: pandus13
OP,
also consider used winter tires if money is tight. look for at least 60% thread left.

A little bit OT, but while I generally don't mind buying used stuff, winter tires is just not one of them, unless almost new.

Realistically, winter tires stop being effective when their tread gets half worn, so if you buy tires with 60% tread left, you have effectively bought tires that have only about 10% (or 20% of the useful 50%) of their useful tread still remaining.

Then there is age - soft winter rubber hardens over time, so even though there may be tread left, the compound isn't pliable enough to provide proper winter/snow grip. Been there, done that.


QPete, all good info. OP, please digest if you still want to keep the "old" car. so no more than 3 years old, in good shape with at least 75% thread left....

now OP, please remember is no good to buy a car in the hurry. make the most of your money!
so:
- see how much you have in the bank. set aside some "backup" (like for new full insurance and maybe you don't like the factory tires).
- check your credit. fix if needed
- see what car / vehicle you like
- check deals
- do not take a loan larger than 5 years!!!
- do not be brand loyal
- check your area for good dealers/indy shops; buy them a couple coffee in a dark rainy morning; they will tell you the most problematic ones...
- check bitog; there are a few reports of new at way better pricing than 1-3 years old; read them how it was done...


good luck. come back anytime. we are a helpful bunch

 

[Vikas]

Only on BITOG when a guy is thinking about buying a new car, he gets suggestion to purchased used tires to save money!

 

[pandus13]

Originally Posted By: Vikas
Only on BITOG when a guy is thinking about buying a new car, he gets suggestion to purchased used tires to save money!

pretty easy actually:
- OP mentions Sentra fishtails
- somebody suggests proper winter tires
- used winter tires suggestion comes. usually from a cheapskate like me since I like to make the most of my money. reason = try to see if you still like the old car with other rubber.

now a little detail that many of us passed while reading OP's post:
"max 50% finance".
This means already some money in the bank and he studied the market.

 

[gathermewool]

Originally Posted By: Pop_Rivit
Since you can't afford to pay for the vehicle up front, if I were in your shoes I'd either wait and save up the entire cost of the vehicle or purchase something that I could afford.

I make it a habit to live within my means and not pay someone else interest. I prefer to earn interest and keep my money working for me rather than working for someone else. I can't imagine being a slave to monthly payments. Your post sounds as if you are fairly young-once you get older the financial decisions you make now will come back to either haunt you or make you very, very happy. The choice is yours, and every penny counts-it's why so many 50 and 60 year olds don't have nearly enough to retire.

There is one poster above that has it right-loans are indeed ridiculous. Unless you are the lender.



I agree and disagree. At a loan rate of a couple percent (or zero, like my last,) it makes very little sense to put much, if any money down. However, if the OP lost his job and would have to sell his car within the next 6 months or less in order to afford his other bills, then saving more doesn't just make more sense, it's a necessity.

Let's face it, buying a new car is a luxury purchase in most cases, making it a complete waste of money... Or not. My wife couldn't care less what she drives, so a well-maintained, used base-model Civic at a steal of a deal makes the most sense for her.

Me, I enjoy power and other features I don't need, but thoroughly enjoy on a daily basis, so an up-trim Subie works for me.

Instead of taking a large chunk out of savings, I financed every bit I could. With stocks doing decently well last year and this year, it makes a heckuva lot more sense to keep my money working for me instead of the bank. They can have their 2%, just like NFCU can have their tax-deductible-for-me mortgage interest, while I make minimum payments and maximize money put elsewhere.

 

[fdcg27]

As many others have suggested, a set of winter tires would transform your Sentra. This is also not an old or high-miles car, so it makes little sense to replace it just because it needs a better tire for winter conditions.
Also, last winter was an exceptional one.
So you want a Subie?
An AWD Subaru is really good in winter conditions.
The rest of the time, you're just hauling around extra weight and using a little extra fuel to drive the rears when it isn't really required.
If you're really set on a Subaru, start emailing dealers with the model you're intersted in and see what they'll offer.
Some dealers will play and some won't.
You can probably get financing cheap enough that it will make sense to borrow the money and there may be incentives out there which will allow an agressive dealer to offer a very attrative price. If you get into a serious exchange with a dealer, make sure that they know you're also talking to others.
If you keep cars for a decade or more, the lifetime costs per mile of use including depreciation will come out pretty close for new versus used.
The advantage of buying new is that you get to use the car for all of the first 100K when it will require little more than gas, oil changes, brakes and a set of tires.
You'll also know exactly how it was driven and maintained from day one.

 

[MCompact]

I will finance a car short-term(2 years or less) if I can get an APR under 2%; that's what I did with my wife's CPO 3er.

 

[hemitruck]

i would rather have a jeep wrangler than a subaru.

 

[Bladecutter]

Originally Posted By: hemitruck
i would rather have a jeep wrangler than a subaru.


Good for you.
That's not what the OP is looking at, however.

BC.

 

[KitaCam]

Originally Posted By: MoneyJohn
Hello folks,

The Subarus I am looking at are about a year or 2 old. First of all, there are not many and those in the market are not priced that lower than the new vehicle. I am going to get max 50% of finance. So if I a buy a new vehicle, what rebates/extra cash do I get that I do not get with an used one?

Thanks in advance.


1 and 2 yr old USED cars are the least financially cost-effective to buy....

OPTIONS:
A. 1 or even 2 yr old NEW cars still on the lot ARE good buys...
These cars can often be found unsold on lots, sometimes as executive/loaners with fewer than 10k miles, and still have full new-car warranties and can be had for
B. 4 to 6-year old car can be had for 50% the cost of new.
C. 6 to 8-year old cars can be had for 33% the cost of new.
These cars can be financed for mo for 48 months....that's less than $200/year....

Used options B/C are cost effective based on TYPE of car and its mileage...Economy cars or luxo models,
You have money for a down-payment so any of these option will be financially cost-effective...I keep saying FINANCIALLY cost-effective, because buying used adds other considerations such as time and inconvenience to maintain a car that will likely have more repairs to contend with than a new car.

Still, better used cars under 100k miles should be the MOST cost effective as the initial cost is so much less to begin with...but older cars should only be kept until repairs cost more than monthly payments.

 

[hattaresguy]

New is a great deal, I can buy a new 2014 Silverado with a few options for $26kish, the local GMC dealer wants $28k for a left over 2013...yeah ok, wait for a moron.