Comments on: Should I Buy a New Car or a Used Car? http://20somethingfinance.com/should-i-buy-a-new-car-or-a-used-car/ Personal Finance Blog for Young Professionals Wed, 08 Feb 2012 12:45:12 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: cars under 1000 http://20somethingfinance.com/should-i-buy-a-new-car-or-a-used-car/comment-page-1/#comment-13345 cars under 1000 Thu, 01 Jul 2010 21:03:52 +0000 http://20somethingfinance.com/?p=423#comment-13345 "I think buying Used cars is a bit like buying an old computer. The old is outdated but will still do the job. Just not as good." well that could not be further from the truth...just look around the way, you can find reliable deals everywhere. “I think buying Used cars is a bit like buying an old computer.
The old is outdated but will still do the job. Just not as good.” well that could not be further from the truth…just look around the way, you can find reliable deals everywhere.

]]> By: Erica http://20somethingfinance.com/should-i-buy-a-new-car-or-a-used-car/comment-page-1/#comment-3512 Erica Fri, 24 Apr 2009 04:30:05 +0000 http://20somethingfinance.com/?p=423#comment-3512 Definitely used. If you want "new" and don't want to pay for NEW, look for a used car just coming off a lease. They're generally well taken care of with low miles. My 2005 Honda Accord looked like a brand new car when I drove it off the lot, but I certainly paid less than brand new. And, I plan on driving it 'til it dies. (Which, considering my last Accord ran past 250,000 miles, should be quite a few years from now.) If you simply have to have a new car or the latest model (and plan on trading in for the newest model in a few years), then leasing is the better option, even with the limited mileage to consider. (Plus, it creates all these lovely opportunities for those of us who want a nice used car to get yours when you're through with it!) Definitely used. If you want “new” and don’t want to pay for NEW, look for a used car just coming off a lease. They’re generally well taken care of with low miles. My 2005 Honda Accord looked like a brand new car when I drove it off the lot, but I certainly paid less than brand new. And, I plan on driving it ’til it dies. (Which, considering my last Accord ran past 250,000 miles, should be quite a few years from now.)

If you simply have to have a new car or the latest model (and plan on trading in for the newest model in a few years), then leasing is the better option, even with the limited mileage to consider. (Plus, it creates all these lovely opportunities for those of us who want a nice used car to get yours when you’re through with it!)

]]> By: DelCid http://20somethingfinance.com/should-i-buy-a-new-car-or-a-used-car/comment-page-1/#comment-3488 DelCid Tue, 21 Apr 2009 16:02:12 +0000 http://20somethingfinance.com/?p=423#comment-3488 Depreciation should always be factored into the equation. Consumers planning to keep a car for fewer than five years will likely get a better value buying a used car from a recent model year, which already has that initial depreciation built into the price. But if you plan on hanging onto the car for at least five years, it’s alright to go for that temptingly priced new car. The price of a car that’s more than five model years old is largely determined by its condition, rather than the initial selling price. Depreciation should always be factored into the equation. Consumers planning to keep a car for fewer than five years will likely get a better value buying a used car from a recent model year, which already has that initial depreciation built into the price. But if you plan on hanging onto the car for at least five years, it’s alright to go for that temptingly priced new car. The price of a car that’s more than five model years old is largely determined by its condition, rather than the initial selling price.

]]> By: Car Buying Guide http://20somethingfinance.com/should-i-buy-a-new-car-or-a-used-car/comment-page-1/#comment-1198 Car Buying Guide Sun, 23 Nov 2008 09:45:31 +0000 http://20somethingfinance.com/?p=423#comment-1198 Hi, For those who cannot afford to buy a new car, investing on an used one is not a bad thing provided the car is in a good condition. Your post will definitely help those who cannot decide which one to buy. -Nancy Hi,

For those who cannot afford to buy a new car, investing on an used one is not a bad thing provided the car is in a good condition.
Your post will definitely help those who cannot decide which one to buy.

-Nancy

]]> By: Wizard Prang http://20somethingfinance.com/should-i-buy-a-new-car-or-a-used-car/comment-page-1/#comment-1013 Wizard Prang Sun, 16 Nov 2008 21:40:47 +0000 http://20somethingfinance.com/?p=423#comment-1013 Tomas, I could not have put it better. Both of my cars were purchased while still covered by the factory warranty. Personally, I'd rather spend $1000-$1500 per year on maintenance than $500/month for a new car. Your Mileage May Vary... if you'll pardon the pun :) Tomas,

I could not have put it better. Both of my cars were purchased while still covered by the factory warranty.

Personally, I’d rather spend $1000-$1500 per year on maintenance than $500/month for a new car.

Your Mileage May Vary… if you’ll pardon the pun :)

]]> By: Tomas http://20somethingfinance.com/should-i-buy-a-new-car-or-a-used-car/comment-page-1/#comment-1000 Tomas Sun, 16 Nov 2008 04:30:41 +0000 http://20somethingfinance.com/?p=423#comment-1000 There seems to be an assumption that buying a used car means getting a crappy 8-10+ yr old maintenance headache. I bought an awesome 4 yr old sports car (fully loaded Mazda RX-8) for <$15K (it was about $40,000 brand new) from a private party. The seller had babied it so much that everybody thought I got it brand new, and I haven't had any mechanical problems with it. A brand new car loses 20-30% of their value once the first owner drives it home. I don't think the new car smell is worth that much money. There seems to be an assumption that buying a used car means getting a crappy 8-10+ yr old maintenance headache.

I bought an awesome 4 yr old sports car (fully loaded Mazda RX-8) for <$15K (it was about $40,000 brand new) from a private party. The seller had babied it so much that everybody thought I got it brand new, and I haven’t had any mechanical problems with it.

A brand new car loses 20-30% of their value once the first owner drives it home. I don’t think the new car smell is worth that much money.

]]> By: Wizard Prang http://20somethingfinance.com/should-i-buy-a-new-car-or-a-used-car/comment-page-1/#comment-976 Wizard Prang Fri, 14 Nov 2008 14:10:55 +0000 http://20somethingfinance.com/?p=423#comment-976 "...if you're in a sales position, and have to travel for work, or like to take off on long weekend road trips, a new car may be the wisest choice for you." No, no and thrice no. If you are a road warrior you will destroy the value of whatever you drive. Therefore a new vehicle is the worst buy, unless your employer is paying for the vehicle. What you want is a good used vehicle that will do the job - not a fancy $40k vehicle that will be worth $12k after the first year. The writer seems to be heavily biased towards new cars; I have purchased a new car once, and will probably not do so again. We have two vehicles; a 1993 Saturn (His) and a 2000 Camry (Her's). Yesterday we took the latter for a 250-mile round trip with nary a hiccup; that's reliable enough for me. Ironically most people who have no money end up buying a new car, due to the plethora of "Creative Financing" (that's code for "too broke to buy a car") options available. The writer also completely misses the opportunity cost of a car payment. Curiously, Ford and GM's finance divisions make more money than their car manufacturing divisions do. Bottom line: Unless you have a million in the bank, don't bother with a new car. “…if you’re in a sales position, and have to travel for work, or like to take off on long weekend road trips, a new car may be the wisest choice for you.”

No, no and thrice no. If you are a road warrior you will destroy the value of whatever you drive. Therefore a new vehicle is the worst buy, unless your employer is paying for the vehicle. What you want is a good used vehicle that will do the job – not a fancy $40k vehicle that will be worth $12k after the first year.

The writer seems to be heavily biased towards new cars; I have purchased a new car once, and will probably not do so again.

We have two vehicles; a 1993 Saturn (His) and a 2000 Camry (Her’s). Yesterday we took the latter for a 250-mile round trip with nary a hiccup; that’s reliable enough for me.

Ironically most people who have no money end up buying a new car, due to the plethora of “Creative Financing” (that’s code for “too broke to buy a car”) options available. The writer also completely misses the opportunity cost of a car payment.

Curiously, Ford and GM’s finance divisions make more money than their car manufacturing divisions do.

Bottom line: Unless you have a million in the bank, don’t bother with a new car.

]]> By: G.E. Miller http://20somethingfinance.com/should-i-buy-a-new-car-or-a-used-car/comment-page-1/#comment-963 G.E. Miller Thu, 13 Nov 2008 23:29:31 +0000 http://20somethingfinance.com/?p=423#comment-963 @ Craig - you make a lot of good points. I think one of the biggest factors one has to ask themselves is "how long do I want to keep this car?". There are advantages to buying new if you're the kind of person that keeps great care of their car and holds onto it for 10 or so years. Others feel like they must have something fresh every few years and would probably be better off leasing. @ CJ - Your point about reliability of used cars due to being time tested is a good one that is not often mentioned. Thanks for the great comment. @ Craig – you make a lot of good points. I think one of the biggest factors one has to ask themselves is “how long do I want to keep this car?”. There are advantages to buying new if you’re the kind of person that keeps great care of their car and holds onto it for 10 or so years. Others feel like they must have something fresh every few years and would probably be better off leasing.

@ CJ – Your point about reliability of used cars due to being time tested is a good one that is not often mentioned. Thanks for the great comment.

]]> By: CJ http://20somethingfinance.com/should-i-buy-a-new-car-or-a-used-car/comment-page-1/#comment-962 CJ Thu, 13 Nov 2008 21:27:09 +0000 http://20somethingfinance.com/?p=423#comment-962 There are so many factors that will vary in this decision. Some things that haven't been mentioned: 1)New cars depreciate very quickly in a short period after you drive it off the lot. If you're upgrading your car every year or two, a used car with low kilometers will depreciate slower than a brand new car. 2)New cars do have warranty that cover certain problems. However, if the car you are buying is the very first model that manufacturer has produced (take the Toyota FJ Cruiser for example that came out in '07) there are often many issues in the first year of production of a new model of vehicle that are fixed in later production years. Often you won't know about these problems as no one has owned the new model long enough to experience and report the problems. 3)It's easier to research the reliability of used cars as more time has passed for problems to occur and to be reported. 4)Some dealerships still offer 0% financing and 0% down on new vehicles. If you can save your downpayment and invest it instead of putting it toward the vehicle, you're technically better off in the long term since you're not paying interest. Even if you had the cash to pay for a new vehicle but could take 0% down financing; you would be crazy not to invest the $30K (or whatever you would spend on the car) and make monthly principle payments. A dollar today is worth more than a dollar tomorrow; basic finance. There are so many factors that will vary in this decision. Some things that haven’t been mentioned:
1)New cars depreciate very quickly in a short period after you drive it off the lot. If you’re upgrading your car every year or two, a used car with low kilometers will depreciate slower than a brand new car.
2)New cars do have warranty that cover certain problems. However, if the car you are buying is the very first model that manufacturer has produced (take the Toyota FJ Cruiser for example that came out in ’07) there are often many issues in the first year of production of a new model of vehicle that are fixed in later production years. Often you won’t know about these problems as no one has owned the new model long enough to experience and report the problems.
3)It’s easier to research the reliability of used cars as more time has passed for problems to occur and to be reported.
4)Some dealerships still offer 0% financing and 0% down on new vehicles. If you can save your downpayment and invest it instead of putting it toward the vehicle, you’re technically better off in the long term since you’re not paying interest. Even if you had the cash to pay for a new vehicle but could take 0% down financing; you would be crazy not to invest the $30K (or whatever you would spend on the car) and make monthly principle payments. A dollar today is worth more than a dollar tomorrow; basic finance.

]]> By: Craig http://20somethingfinance.com/should-i-buy-a-new-car-or-a-used-car/comment-page-1/#comment-959 Craig Thu, 13 Nov 2008 16:09:35 +0000 http://20somethingfinance.com/?p=423#comment-959 I'm not a car person myself, so I would probably opt for a used car, at least in the beginning. Either direction you choose, you should never go to a dealer when you have to buy a car, but rather it's something you may want. Otherwise they will lock you in and take advantage of your situation. With the internet, there are a lot of sites to do research. I think that is key before purchasing any type of car. Also depends on the person. Leasing it a viable option to get a new car but not have to have it for lifetime. A lot of people who could afford a new car opt for this option because it allows them to change and upgrade every few years. For a younger person who is looking more long terms and bang for their buck, I think a used car is best. Craig I’m not a car person myself, so I would probably opt for a used car, at least in the beginning. Either direction you choose, you should never go to a dealer when you have to buy a car, but rather it’s something you may want. Otherwise they will lock you in and take advantage of your situation. With the internet, there are a lot of sites to do research. I think that is key before purchasing any type of car. Also depends on the person. Leasing it a viable option to get a new car but not have to have it for lifetime. A lot of people who could afford a new car opt for this option because it allows them to change and upgrade every few years. For a younger person who is looking more long terms and bang for their buck, I think a used car is best.

Craig

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