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I follow the conventional wisdom of buying a used vehicle at least three years old. Only new vehicle I ever bought was a motorcycle for cash and lost money on it even after selling only a year later. Think what is comes down to is whether a loan is taken out and since loans on new cars are likely higher (than on used), one is bound to lose more money buying new.
I’ve done both.
If I have the resources, and expect to hold onto the car at least 15 years, I like to buy new. I can get exactly what I want, with the latest safety features, ensure timely maintenance, and I can baby the car. We’ve done this twice: 20 years and 301K miles, 17 years and 276K miles.
If not, a used car can be a great option. I like used Toyotas with 100K miles on them. There are usually some expenses with used cars beyond the purchase price, so I try to include a couple grand of repairs in my budget. It’s especially great when you have kids. A fender bender is no big deal.
I’ve also leased a car, when I wasn’t sure I wanted to own it forever, but did want to try it out. It was a Kia Sportage, which we loved. We returned it, but we are looking into it’s big brother, the Sorento PHEV, and have one reserved.
Bought a 2012 Genesis new. Bought the premium warranty which I never do. It is a 10 year, all electrical and things not covered in the power train warranty. I did this because of all the new tv screen and no knob electronics. I modified the car with what is referred to as the “Korean Bentley package.” It is my Sunday driver and still only has 78,000. So far Hyundai has paid for undercarriage damage, a new sun roof, and an electronic valve assembly for the parking brake. About $12,000 in repairs. Right now, because of this perceived “chip shortage” (with no explanation. Probably stacked up somewhere with all the toilet paper we couldn’t buy) I am a little leary of buying new now not knowing where the electronics are coming from or what the story is with a shortage of something the is plastic and metal and you can ship in your pocket.
One more story about the merits of buying used. My son’s GMC Sierra truck’s engine died after nearly 500k miles of hard use. He could not afford new so he started looking at used trucks around 3 years old. They are hard to find. He finally found a couple of GMC Sierra’s at a dealer about 100 miles from our large metro area. It was a 1 year old truck with 5k miles that had been owned by the dealer’s father. It had lots of extras and was in cream puff condition. He never priced new, but based upon list price and projected selling price, he paid $33k for a truck that sold for around $45k new.
He did a lot of online research which resulted in him finding this really good deal.
There are lots of online tools that can help people find what they want, but it takes a little bit of work and patience.
It depends. Sometimes the discount to be used is so small that is does not make sense to buy used. Some cars, like Camry and Accord, hold their value extremely well.
OTOH, there are really good cars that depreciate much faster and it makes more sense to buy used. The Toyota Avalon is a good example. A 3 year old Avalon sells for about half of new, and it is a very good car with excellent reliability. We bought a 2007 Avalon Limited in 2010 with less than 40k miles for about half the new price. It has been a very dependable car and my wife loves it. The dealer gave us a 12k bumper to bumper warranty to boot.
There are other good used models like that. People have to do their research to find them.
Today’s market is crazy. This is not the time to be buying a new or used car. Hopefully, the market will normalize and next year will be better.
Well first if you can safely afford a new car (even though you take the depreciation) you get the warranties and such. But really now prices are so high on used vehicles you may want to buy new.
We have bought mostly used, a few years old. And drive at least 10 years after. At this time with used so close to new prices, we would consider new.
Buying a used car is always the smarter financial choice. If you want to buy a new car, that’s fine, buy one, just don’t try and rationalize it by claiming “break even point” or negotiating prowess. If you really want a new car, the rational move is to buy a used car with only a few thousand miles (and let the original owner get stuck with all the depreciation).
I’ve always read the break even point is 7 years. Since we always have our cars at least 10 years buying new works best for us.
My favorite option is buying a one-owner used car directly from a friend. That scenario is hard to beat because I get a reasonable price, no hassle, confidence the car has been well-maintained, and I make my friend happy too. But if that isn’t possible, I have gone with low-mileage used instead of new and haven’t regretted it.
Yes, used for me at about 3 years old with 35,000 miles.
Only one of my cars was bought new, and it wasn’t the best financial choice. I had to sell the car in a couple of years (to raise cash) and lost quite a bit of money.
Buying almost-new cars (2-5 years old with below-average mileage) worked out best for us. We have three cars and all of them were bought used (low mileage). We plan to drive them as long as they run.
On the flip side, a couple of used cars I had in my younger days gave me so much trouble. The mistake I made on those was to minimize the purchase price without considering reliability or ongoing maintenance cost.
I haven’t bought a used car in 30 years and the times I did, it ended up a problem.
I’ve read many times the conventional wisdom, that applied in pre-pandemic times at least, that cars depreciate so much the moment you drive them off the lot that buying used is the smart choice. In recent years, though, I’ve favored going the new car route.
I’ve found that if you live in an urban area with multiple dealerships to negotiate with, it’s possible to get impressive discounts on new cars. And if you buy a reliable model (Toyota, Honda, Subaru, etc.), the long stretch of trouble free driving is a big plus, especially as one enters the “golden years”.
Not always. Something I’ve recently considered is the improvement of technology and safety. The wealthier you get–or the more you have to lose–the more you should prioritize safety and time savings (it really sucks to waste a few hours on the side of the road waiting for Triple A!).
On my next buy, I plan to step up my used car game from a five-year-old vehicle to perhaps one that is just two years old. If I had a wife and kids, then I might go for a new one.