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Buying new vs. used

I’d like to know what people think about buying a used vs. a new car. I’m thinking of buying a Toyota Corolla LE. The True Market Value (from Edmunds.com) for a new one is around $17,000-17,600. I have seen 2010 models advertised for around $13,000-15,000.

If I’m going to pay cash, and I’m planning to keep the car for many years; am I really saving a lot buying a recent used model? They say Corollas don’t depreciate a lot. If I will only save a few thousand dollars, is it worth it? How much do I have to save to make it worth it? $2000? $3000? $4000?
I’ve often heard used is a better bargain. Is the cost of a new car ever a good deal? A new car will have a warranty and less repairs.

I don’t want to spend a lot of my money on a car, but I don’t like to deal with repairs either.

Are there experts I can talk to about this? What if I asked mechanics what they thought?

I stopped buying new cars over 20 years ago. You need to have every used car inspected by a good mechanic before you ever decide to buy. It’s money well spent. Don’t jump on the first vehicle you see unless it’s a real good deal and has been thoroughly inspected by a competent mechanic. Try to find the vehicle you want with the lowest mileage and in the best shape. There are great deals out there but you have to look for them.

I buy new and keep the vehicle forever.

With older used cars, you need to get them thoroughly checked out. They’re much cheaper, but you need to accept some risk.

With late model used cars, I’m always afraid that they’re back in the market because there’s an unsolvable problem with them…or because they’re been in a wreck.

I believe the best way to minimize the risk on late model used cars is to seek out ones being sold by rental agencies. They replace their vehicles not because of problems but rather to keep their offerings fresh. Most of the vehicles they sell are problem free. Most of the late model vehicles from other sources are possibly problem vehicles.

That’s why I buy new. I’m not a risk taker.

That’s why I buy new. I’m not a risk taker.

I normally buy new…My 05 4runner was one year old with only 11k miles on it when I bought it. I consider that low risk…for a $10,000 savings compared to a new 06 model. If I can find a deal like that again when I’m ready to buy…I’ll do it. But they are NOT very plentiful (at least around here).

As for asking mechanics, I don’t think they have much added information for what is really a financial decision on your part.

I buy new, keep 10-15 years.

No one answer fits all people and situations. I bought an '03 Honda Civic new with the intention of keeping the car forever, or as long as I can drive, or it falls apart withever happens first. 9 years later I’m still happy with the decision. A new car you know the repair and maintenance history from day 1. That is about the only advantage to a new car.

A used car depends on how old it is and how is was used? I bought a car from a rental fleet with 24K miles on it. It now has 65K miles about 5 years later. It is mainly a “fun” car for me, an '04 Thunderbird convertible. Only one serious repair bill for a heater AC control valve. Other issues with iginition coils were covered under a Ford extended warranty for that particular problem. I paid $24K for a 2 year old car with 24K miles that had a sticker price of $48K. I simply couldn’t have afforded a new T’bird.

I have purchased several other used cars without problems, but I am a knowledgeable buyer. If you buy used and the car has 50-60K miles on it you can figure to have more repair bills than on a new car. At that point warranties are running out and problems from wear and tear start to increase. If you buy anything used (even a dealer certified car) you MUST get an independant mechanic to inspect it and give you an opinion on the mechanical condition of the car.

For a Corolla, get the best price you can on a new one. Then go shopping for used. A used car with 20K miles and 2 years old sells for what? If the used car is only 10% less, stick with new. If it is 40% less it might be a good deal depending on what the mechanic points out.

In the end it is your decision.

I decided to buy new when I saw a nearly new Toyota Prius make a hasty left hand turn across a divided street with a 6 inch raised concrete median. That car hit that median at a good 20mph and just kept going, I am amazed it didn’t completely snap some axle or suspension component. I thought to myself, “that could be the next shiny Certified Pre Owned car on a dealer’s lot and the next buyer would never know what I just saw”.

Used car prices are high right now because of the economy, so the price savings from new might be smaller than you expect. For instance, we bought our little Toyota new in 2008 for $15K. I’ve recently seen used ones of the same year and mileage (40k+) retailing for $14K. That’s a terrible deal, but high gas prices are creating demand for used fuel sippers.

If a CPO Corolla had 20-30,000 miles on it and was only $2000 cheaper than a brand new one, I’d go new in a heartbeat. If I’m going to pay new or nearly-new car prices, I feel much better knowing that I am the only one putting miles on the car and therefore know exactly how it has been treated and maintained. If you are keeping the car for 8-10 years, the depreciation is less of a concern, as is the $2000 price premium.

And if you are keeping the car for the long haul, definitely take it on a thorough and long test drive to make sure it really is the one you want.

I’d buy a new one if it is a Corolla. Their resale value is so high that you really don’t save much buying a used Corolla. According to Edmunds True Cost to Own, whatever you save in purchase cost is eaten up in repairs and maintenance. Here’s a table to show the savings for every year that Edmunds reports the 5 year TCO:

Year____TCO___Savings
2012___$36,330___0%
2011___$34,238___6%
2010___$34,133___6%
2009___$34,307___6%
2008___$34,057___6%
2007___$33,372___8%

Emajor, was that Monday the 12th on rt 3 in Nashua NH? At about 11:00 am? Are you sure it was a Prius?

I just did that curb thing. In my case I put it up on a lift immediately and there was zero damage, but the noise scared the bejeezus out of me.

I have never bought a relatively new, used car. When I was younger, all I bought were well used cars that I did all the work on and kept them running. Saved boat loads of cash that way and helped me get to the point I’m at today. As I got older and could afford new cars and has less time and inclination to fix my daily drivers, I started buying new. What scares me about 1-2 year old used cars is what I observe every day. For example, on my daily commute is a 1/2 mile stretch of gravel road that spans a swampy area. It is seriously pot-holed and a significant risk for stones being thrown up. The only people who don’t even slow down have very new cars. I can only assume that they are either leasing or plan to trade in every couple years. The pounding these cars take is astounding and no way you wouldn’t notice how abusive it is to the car. Long term abuse is easier to detect when looking at a used car. Ridden hard and put to bed wet for a year or two may be much more difficult to determine and it’s just not worth the difference in cash to me.

In your situation, Pesky,new would seem the best deal. The vast majority of car buyers with $15,000 in hand would spend the weekend in Las Vegas and then try to make a down payment on a new car with whatever money was left on Monday. Carper diem seems to be the economic model in most American homes. Buy the exact model you want and ENJOY. I will advise you call your insurance agent before picking up the car. When paying cash you may have no collision coverage when you leave. A friend paid cash for a new Lincoln and on the way home an uninsured and unlicensed idiot ran a red light and totaled the new car which had less than 30 miles on it.

Toyota has some great deals on low interest financing on Corollas. Check what is available for a new vehicle first. It is hard to beat the price with 1% financing or better. A new vehicle whill have a higher interest rate if you finance it and may cost more in the long run. I have a 2010 Corolla LE. Great car. Great MPG.

I tried Edmunds.com’s True Cost to Own for the Corolla LE 2012 & 2010. It didn’t have any figures for maintenance, repairs or insurance. Is the cost to own information still useful without that?

the same mountainbike
Oh man, I bet that did make a hell of a noise! Ever since I witnessed that, I have given raised medians I wide berth. Do you have a car or truck? A truck I might not worry about, but I’m guessing the suspension on that guy’s Prius is on the delicate side. Did it even tweak your alignment?

“I tried Edmunds.com’s True Cost to Own for the Corolla LE 2012 & 2010. It didn’t have any figures for maintenance, repairs or insurance.”

It had that information for me. The total roll-up is in my post above, including maintenance, repairs or insurance.

Emajor, I drive a Scion tC. It didn’t even tweak the alignment, probably because I hit it at an acute angle. I simply went up and then down with the front tie, wherein a formed rail hit the median concrete, then up & down with the rear tire. I was starting from a dead stop, so there was extremely little speed, but it all happened too fast to react. The only sign if the event was scratches in the paint on the formed rail. I’ll touch that up this weekend.

In this case it was an unfamiliar area and the island was extended out way farther than normal.

Pesky,
You will have to hunt some info down. A new Corolla should have just about the lowest maintenance and repair costs of any compact. Our 4-year old Toyota Yaris has been dirt cheap to maintain. And a ten-minute call to your insurance company should give you the insurance premium information, and I am sure they will run the numbers for a few other cars as well if the Corolla isn’t the only one on your list. I don’t see a Corolla being any more expensive to insure than a Civic, Focus, et al., but I don’t have their sinister algorithms in front of me.

If you read some of the maintenance comments on this board from time to time, I’m sticking with buying new. If you can find the car you want, with a provable maintenance history, and a good portion of the warranty left, maybe used, but over the long haul, new is just as cheap as used.

@Bing…Especially when you add in lost time/wages because of increased maintenance.

You have a far better chance having less maintenance issues buying new then buying used. My 4runner I bought used…but it had so few miles and was only a year old. I had it thoroughly inspected and it was in excellent shape. Over 200k miles on it now…and still runs great. HOWEVER…those deals don’t come up often. I had been looking for a new vehicle for about 2 months (I take my time and buy what I want/need). Then this came up and I snapped it up. When I have to buy again in a few years…I’ll look for a good used one…but in all likelyhood I’ll buy new. Those deals don’t come up often.

A 2010 Corolla LE is about $1344 less than a 2012 (according to Edmunds True Market Value). The True Cost to Own is about $2535 less for a 2010 (over five years). If those figures are added together, the total savings (over five years) for buying a 2010 would be $3879, correct?

Most of you think new is probably a better deal, but does anyone think that makes a 2010 sound like a good value? I hate making decisions like this.