It’s time to replace our 1998 VW Beetle and we’re trying to decide between new and used. I know that a car loses a ton of value the minute it’s driven off the lot, but we tend to keep our cars until they are, literally, falling apart.
We had our Isuzu Trooper for 15 years, our Beetle for 12, and we intend to keep my husband’s truck, which is going on 7, until it can longer be driven.
So, does it make sense to buy new?
It makes no sense to buy a new car (unless you have more money than sense). Most cars will last 15+ years and 200,000+ miles if properly driven and maintained. I bought my 1991 Trooper II for $5k (original owner paid $15k). Drove it for 10 years and 100,000 miles, and sold it still in great condition for $2k. Depreciation is the biggest contributor to overall lifetime per mile cost. Find a 2 - 4 year-old, original owner car, all service records, good PPI for 40% – 50% of MSRP.
Twotone
I agree with twotone. Do your homework and get something a few years old that will last you 10+ more years. Use Edmunds.com to find “consumer reviews” on the used cars you’re looking at. The consumer reviews are written by owners who’ve have their cars for a few years, so you get an idea of what to expect.
There is NEVER any reason to keep a car till it’s falling apart; If what you’re talking about is rust. That can almost always be totally prevented. I know many people who live in the rust belt, myself included who deal with it and 20 plus rust free years is the norm for us and we just tire of the vehicle. Otherwise, mechanically, 250K well cared for miles is reasonable or until you feel newer features are worth trading in for.
For this reason, it has always been better to buy a used car , economically. You occasionally have to make the decision upon buying a new or newer car, if it has the newer features, safety of otherwise, that you prefer. I stay in the 2 to 3 year old bracket for that reason.
If you kept a Trooper of VW for that length of time, you’ll get more out of other models. But buying new though not the wise choice economically, may be necessary for the car you want. Though I fully agree from an economic sense that buying older than 2-3 years is cheaper, I never do it because of safety concerns. Especially true for me, near the end of the cars life.
It depends if you want a popular model car or not. If you want something like a Civic, the depreciation will be about 22% in the first 2 years, as will a BMW 328. A Volvo S40, will depreciate of about 35%. The difference can be insurance that the car was well kept. And if it was well cared for, why is the seller letting it go after just 2 to 4 years? I tend to buy new cars with a large discount so that depreciation is not a big deal. For instance, if I sold my 2009 Cobalt I could make $2000 right now. Figure out what kind of car you want (size, sedan, luxury, etc.), and research what is available. Check out prices and incentives for those cars new, and then look at them used.
With all the good used cars available I can’t see any reason to buy a brand new car.
The first year depreciation is a killer. Let someone else take the hit. Find a nice late model used car. There are plenty of them out there.
I’ll play devil’s advocate here and recommend buying new.
If you buy new, then you’ll be able to get the color and options you want, as well as know the maintenance history of the vehicle as it gets older.
If you know what you’re looking for, and can wait, a good salesman will set you up for an order and you can be happy knowing you’re new vehicle will arrive in a couple months; kinda like a Christmas present
It depends. Some cars loose a lot of value in the 1st 3 years, some don’t. I have been pricing used Honda CRVs, they are $2K less than one brand new. Buying the new one gives me some more room for bargaining, because I can request quotes from 10 dealers without leaving my office/home and I know other than the color, the quotes are for the same cars. With used cars there are many factors such as maintenance or CPO warranty. On less popular brands, they loose 40% in the 1st 3 years which makes sense to buy them used.
My 05 4runner I bought used in 06…I almost bought new. I was looking for a used one with low mileage…but all I was finding were 04’s with 70k+ miles…I was driving by the dealer which I do every morning and happened to notice it out front…Stopped there on the way home and they had just gotten it in the day before…Only had 11k miles…struck up a deal and drove it away 2 days later.
You may have to be patient and wait.
Generally speaking a used car is a better value, although a couple of things need to be figured in. While you lose the depreciation with a new car, you’ll also be a year or two (or however old the comparison used car is) further away from spending money on out of warranty repairs. Some new cars even included oil changes and interval service. If you’ll be selling the car at some point it will be X years newer and worth a bit more.
If you are financing, there’s often a significant difference in the interest rates between new and used. You can often finance new with the dealer for 0% to 1.9% depending on the incentives being offered. Used may run you 5% or more.
"deciding between a new or used car"
Get Both.
Like MikeInNH, I purchase cars that are only 1 or 2 model-years old, with less than 12,000 miles for a savings of thousands of dollars. The cars look new, have that new car smell, and have tons of factory warranty left.
For folks like you and me who keep the cars “forever,” the fact that the car is 1 or 2 model-years old doesn’t matter as much as it would for somebody who keeps the vehicles for a shorter time period.
Our 15 month old, less than $14,000, 2009 Impala with 10,000 miles was GM Certified and came with the balance of the 5 year / 100,000 mile drivetrain warranty and included an extended GM new car bumper-to-bumper warranty of 48 months / 48,000 miles. This car is just like new with new car smell and no visible wear to tires, brake rotors, or anything else.
To me, these slightly used, factory warranted cars, are the best kept secret for car buyers trying to decide on new or used.
One caveat. Make sure that the car is inspected by a knowledgeable car body person to be sure it hasn’t been wrecked and repaired if you don’t know how to tell. Warranty won’t cover accident damage.
Oh, and like Mike, I was patient and waited a couple of months, but I did my homework and searched until I found what I wanted and negotiated a good deal.
CSA
I purchase cars that are only 1 or 2 model-years old, with less than 12,000 miles for a savings of thousands of dollars. The cars look new, have that new car smell, and have tons of factory warranty left.
For folks like you and me who keep the cars “forever,” the fact that the car is 1 or 2 model-years old doesn’t matter as much as it would for somebody who keeps the vehicles for a shorter time period.
While CSA and I have completely different views on some things…Here we are in total agreement. The ONLY problem in buying a used car this way, is you may have to settle on something…Like color…I really don’t car what color my vehicle is…I just don’t like White or Black cars…Almost any other color is fine (maybe not that Mary-Kay Pink either).
Oh, and like Mike, I was patient and waited a couple of months, but I did my homework and searched until I found what I wanted and negotiated a good deal.
That is the other thing (WOW CSA…two in one day…lol). You MUST do your homework. Determine what vehicle(s) you are looking for and with what options. I was looking at either a new Pathfinder or a 4runner. The 4runner came up first. I had the XTerra on my list until I drove one with my youngest in the back seat…He HATED the ride…so I removed it from the list.
Thank you everyone.
I just want to make one thing clear: by “falling apart” I don’t mean rust. The Trooper got beat to heck going from Miami to Jersey City to Chicago. The Beetle’s interior is the issue - we have dogs and a horse, so you might imagine what the interior looks and smells like! ;-)It also has a very slow oil leak and we’re not really interested in spending the money to find its source (it’s not readily apparent). My mechanic tells me that as long as the leak doesn’t get worse the car will outlive me, but I need something a bit roomier.
Anyway, thanks again!
The Beetle’s interior is the issue - we have dogs and a horse, so you might imagine what the interior looks and smells like! 
How do you get the horse inside the Beetle?
You seem to drive your cars a long time. No matter whether you purchase the car new or used, when you amortize the cost over the years you keep a car, you come out ahead of most people. On a new car, you do start with new tires, brake linings, battery, etc. plus a longer warranty period than a used car. If the difference is not a lot greater than a used car, the new car may be an option. However, at the right price, a used car, even with replacement tires and other maintenance, may be a good bet. The difference between used and new, when invested with interest, should give you a tiding sum at the end of the useful life of the vehicle.
So much is dependent on the financial situation of the buyer and their mechanical abilities. Some people want all the reliability they can afford. There are some great cars out there, new and used. If someone can afford a new Aston Martin or a new Corolla and that’s what they want more power to them. Someone must buy the new cars to make them used for the rest of us. If an automobile is maintained and driven for 15 years it is a fairly good investment even if bought new.
Mike, I “Settle” A Little Bit When Shopping For A Slightly Used Vehicle, But I Refined My Search A Little On This Last One And It Probably Made It Take A Little Longer.
I have usually accepted whatever color the car came in, but after 3 white cars (one of the more popular colors according to sales), I decided to go with white, again, for my wife’s car. They are cooler in summer and look cleaner most of the time (partly my opinion). The car had to be an LT model, too. I passed on some cheaper LS models.
So, I stuck with it and the car I purchased was a white vehicle. I guess I like a challenge. Heck, it would have been a piece of cake to get that car in any old color. I’m getting good at this after several purchases. Who would believe a 4 or 5 day test drive (rural area) ? I almost can’t believe I pulled it off. The dealer had to call (and leave a message) to see if I was returning the car or buying it.
CSA
I always buy used,and the biggest reason is I trade them off every 3-4 years.In your case it seems you keep vehicles for awhile.I would recommend you buy new in your case you will never really loose or gain any value specially after 7-10 years. The plus is you get atleast a 3-36 factory warranty and some manufacturers (Volvo) even provide all scheduled maintance during the warranty period.
The car had to be an LT model, too. I passed on some cheaper LS models.
For my 4runner I looked at features for all the models…And the SR-5 (lowest end model) was fine with me…Only features I really wanted were power windows, AC, decent stereo(although that wasn’t a must since I could always add that later), 4wd, and the towing packing (again not a big deal since I could always add that later).
Now when my wife bought her Lexus…We bought it new for a couple reasons…
- Wife wanted the ES-350…New that year.
- Wife had made a good amount of money from stock options so she wanted to treat herself to something with the money.
- She turned 50 the year before, so this was a b-day present to herself.
If you have the money, buy new. As one person said, some must buy new so there are used cars available for others.
I agree with others that buying a 2 or so year old car and keeping it 10+ years is a very good way to go. That said, I always buy new, keep 15 years or so. The added cost is justified (to me) by the pleasure I get out shopping for 5 years or so (I’m a car nut), of having the car from day one, getting just what I want (I’m picky), and convincing myself that over 15 years the cost/mile difference is pretty small.