Buy new or used?

I’m in a quandary here. I’d like to replace my 2001 Accord (133,000 miles) with a newish model Hyundai Sonata. I went over to our friendly local dealer and took a test drive in a 2012 GLS (sticker price $21,750). I liked the vehicle, it was comfortable and I’m interested. But I’m also a cheapskate and there are 2011 model year Sonata GLS cars to be had with around 20,000 miles at $2,000 less up front. These are apparently ex rental cars. Also the warranty coverage is less at 5yrs / 60,000 miles compared to a new Sonata at 10years / 100,000 miles.

The complicating factor is that the salesman shrewdly showed me a 2012 GLS with the option package installed. Normally, I’m not one for optional add ons but this did have a feature which I really liked and that was adjustable lumbar support in the driver’s seat (and also electric operated seat adjustment). Problem is that this adds another $800 to the price.
So, what does the community’s wisdom suggest?

  1. Go for a 2012 Sonata GLS (with long warranty)
  2. Go for the 2012 GLS with option package (extra $800, but more comfort on longer trips)
  3. Go for a 1 year old 2011 GLS (save $2,000 - $3,000 on 1 or 2)
  4. Look at Accord or Camry.

Other factors:

  • My driving is 80% interstate since I cycle to the office and mainly use the car to drive 60 miles to church.
  • My wife of course favours option 3
  • We do have savings to buy this outright
  • I also have an interested party to purchase the 01 Accord.

The conventional wisdom is that cars lose 25% of their value when you drive them off the lot. But the used Sonata is less than a 10% discount for 20,000 miles of wear and tear. (Now, there are many reasons why used cars might be holding more value, or selling at higher prices, today versus the past, that could be the topic for separate discussion.) If you could find a 2011 Sonata with 20,000 miles and a 5 year warranty from a different dealer or private party for around $16,000, then I would consider used. But in your situation as described, 10% is too small a discount to take a used car, so I would go for new.

Once you’ve decided to spend $22,000 on a new car, $8/month over 10 years for extra comfort seems a no-brainer.

If you keep your cars 10 years, I’d go with the new one equipped for comfortable driving. The extra cost over 10 years is not a lot, $300/year or so, right?

If you habitually trade in your car every 2-3 years, then going with the slighty used makes some sense. That is, it minimizes the largest cost with a car, the new car depreciation. Because you keep your car so long, adding extra comforts as well as getting a default better warranty could save you money as it will reduce the incentive to trade in sooner. The total extra cost for the new car over 10 years is $300 a year, not that big a deal long term.

It seems to me the used 2011’s are way overpriced. You get less warranty, how the car was driven and cared for is unknown. Brakes and tires will need replacing much sooner than a new car. Rental companies get a discount when they buy the car, so they are trying to sell it to you for more than they paid for it. Not a good deal, stick with the new car. You can go to a couple of different dealers and see if you can work the price down on the new car.

As for the extra options, the fully adjusting electric seat is a very good thing. The lumbar support if it really “supports” is also good. Stuff like fabric protection, and paint protection, and 90 zillion watt mega stereo systems can be lived without. Get the best deal you can on a new car with the features you want. That way you can live with the car easily and comfortably for the next 10 years.

Comparison shop the Accord and Camry too. It will do nothing bad and may help get the Sonata dealer to be more aggressive and drop the price more to get the sale.

Test drive the new Elantra. 40 mpg.

If you structure the Accord sale as a trade-in through the dealer, you could end up paying less in sales taxes.

Thanks for the advice folks. This is very helpful indeed. I think the long term argument is a good one. I don’t plan to change this vehicle for at least 5 years.
I looked at the Elantra but I think the Sonata is more comfortable and has less road noise on the Interstate. Plus I already have someone interested in the Accord so what I’d gain in reduced sales tax I’d lose in dealer trad-in markdown.
Thanks again.

You can sell the Accord to the guy you know, just run the sale through the car dealer. You trade it in on the Hyundai, then the dealer sells it at the same price to your guy. You pay less taxes, the dealer isn’t out anything. I bought a car this way.