Which do You recommend for saving money?
Which ones give the biggest bang for the buck?
Do new or used give the most options to buyers?
How long should one plan on keeping a vehicle?
Feel free to add any questions and answers.
That depends. My wife and I try to keep cars as long as possible, almost to the point of the wheels coming off but still reliable and safe. When we sell them or trade them in we do not get a lot of $. But we take care of the cars and unless there is a manufacturing defect or accident the car is still serviceable for the new buyer. For many cars we were buying new, at the end of the model year and end of year. Dealers wanted to move the cars and make room for the next model year so we got good deals. This limited our selection, but most cars have what we want anyway as standard equip. This past year and a half we just bought our first used cars. Saw a Dodge Caravan from a popular rental company with 4,000 miles and a nice price. Took it to my mechanic who said it was OK and complimented me on the price I paid. Now have 12,000 miles and no problems. Somehow Dodge said I still have the factory warranty, which is great as rentals usually lose the long warranty. My wife saw a used Corolla @ a reputable dealer for a sweet price, got that one and no problems so far. Our plan is to keep them for many years.
I know some folks who want to buy new, special order the car with the options they want and sell them in 3 or 4 years. They have a nice house, nice cars but are still working. I retired early (my choice) and am having a ball.
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Off-lease cars. They usually have somewhere between 35-40k on them, so not enough mileage for major maintenance to be skipped. They probably got their oil changes on time because the lessor doesnāt want to get in trouble. Theyāre too new to have hidden rust, and best of all, theyāve taken a huge depreciation hit already, so you get an almost-new car for a lot less.
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From a purely mathematical perspective buying new is always the most expensive way to go due to the shape of the depreciation curve.
Having said that, buying a car shouldnāt be a purely mathematical decision, as there are other import factors to weigh, such as how long you plan to keep it, whether you can tolerate the risk of less reliability, and whether your social circle will tolerate you driving a clunker.
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how much did car cost you while you owned it. purchase price vs sale price at some time in the future.
i āthinkā a new car costs more per mile vs a used car.
now, throw in a very reliable car vs an unreliable car.
that totally might skew your math
There are not any ā one size fits all for those questions '.
We buy new cars, but Iām not sure it saves money. What we get is a car that is well taken care of from the start. Thatās important to me. Fluids and filters always checked and changed on time. I suspect that saves money over time since we rarely have repairs on anything we own. The one used car I bought sort of fits in that category. It was 2 years of with 14,000 miles and oil changes every 6 months. CarFax said so! One of those rare cases where CarFax worked. Anyway, it has such low mileage it was an almost new car.
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I am in the buy 2-4 year old used cars off-lease. Depreciation is usually at least 50% if not much more. Lease cars have mileage caps that keeps cars at the 12K miles per year. So figure even a 4 year old car has only 48K on cars that can easily last 150K miles even if abused in the lease years. So I get 2/3rds the life left for less than half the cost.
That said, I have special ordered 2 new cars, bought 1 new off the lot, leased 4 cars and bought 2 of them, and bought a bunch of used cars ranging from 2 to 7 years old. The cheapest cars to own were the used ones.
a lease payment is a good number to keep in mind of value drop per month. 1%/month is good. a 4yr old car is worth 1/2 of new. a 4-7yr old car should have no major repairs. after 8yrs is the gray area. starter dies? alternator? rack and pinion? not cheap but a failed internal part in a trans means it might have to come out. $3-4k?
There is a āone size fits allā answer to the question āwhich is the least costly alternative?ā:
Weāve had many posts on this in the past. If you need reliable transportation at the best price, buy a 2-4 year old car with a good reputation and ādrive it till the wheels falls offā. Not really, but get as many reliable miles out of the as you can. That usually means 200,000 miles or so with normal maintenance before you need to trade.
The absolute cheapest way to drive is to buy only beaters with rough bodies and drive them into the ground while doing only minimal maintenance. This may violate safety and environmental regs as well as endanger you marriage. Itās not for everyone.
Private taxi operators I have talked to never buy new cars; they get rentals coming up for sale or company fleet cars. They then add another 500,000 mile or more on them
How long you keep a vehicle depends on you driving pattern. We have a retiree here in our area who is a veteran and still drives his 1976 gas guzzler Chevy Caprice. Heās in his 90s and probably bought the car new when he left the military. Itās always spotlessly clean!
We, like other posters, keep our cars until:
- They become unsafe due to rust or other cause
- Incurs a major repair that makes it cheaper to buy another car
- Requires parts that are no longer available; weāve had an orphan car in the past
- Environmental regs condemn the vehicle and bringing it up to specs is not possible or economically feasible.
- The day to day reliability is so poor that the car becomes a nuisance.
- The physical appearance is so bad (rust, dents,) that it becomes and embarrassment to drive. My wife has a strong say in that.
Having said all that, some of the cars weāve had and age of disposal:
- 1965 Dodge dart, 154,000 miles; reliable but rusted out to the point of danger. Disposal in 1978.
- 1976 Ford Granada; 104,000 miles. Disposed for $750 in 1989 due to complete unreliability, constant problems.
- 1984 Chevy V8 Impala. Disposed by my son for $700 in 1996 with 300,000 miles on clock. Still reliable, but he wanted something smaller and newer.
- 1976 Dodge Colt (Mitsubishi rebadged). junked ($60) with only 80,000 miles on it in 1998 because of inability to get parts since Chrysler had parted with Mitsubishi.
- 1988 Chevy Caprice. Great car and kept till 2007 when I needed a newer car. Mileage was about 180,000 and car was still reliable. Selling price $1400.
Last time we bought a new car, we did a 5 year loan, got the extended warranty so there were no surprise out of pocket costs during the life of the loan, kept the car 10 years, and after all costs, with 1 unexpected repair of $600, found it was cheaper to lease a car that would be reliable for the wife. For me I buy used, got an 03 in 08, still driving it, a few wheel bearings, stabalizer links, starter and thermostat, front differential repair, I have not added up the costs, but needed something to tow the boat. My next car for me will be a used purchase, and renting a uhaul truck for the 2 to 4 times a year for putting and pulling the 2 to 4 week a year boat at the cabins.
Some people want all the hassle free convenience they can afford and often that means trading for new cars on a regular basis. If they choose a good model and have a reliable independent shop to deal with they can drive a year or two beyond the last payment before a significant problem prompts them to look for a replacement. But dollar for dollar buying the right off lease car seems preferable in most cases.
I recommend buying new in a make and model with a reputation for reliability and longevity and caring for it as if it were your own.
Or get a Porsche.
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Again, without reading all the previous posts, I assume Iām going to go against the grain a little, but I think the question is not whether to buy new or not but rather how long and how much will the usage be and how much do you want to spend.
I have bought new and run the wheels off to 500,000, bought used and run the wheels off to 500,000, and bought new and traded at 60,000. Personally for our first car I like trading before the warranty runs out because I never have to worry about a break down or a surprise repair.
At any rate whether you buy new or used, if you amortize the cost for the car itself over hundreds of thousands of miles, in the end there is hardly a dimes worth of difference in the cost per mile for the machine itself. If you donāt put many miles on, and trade sooner, you can save a few thousand by buying used but of course the caveat is whether you will have a few repairs out of warranty to eat the difference and whether the car has been cared for. Nothing wrong with either but its a lot more work finding a good used car that you like and interest rates are usually higher on a used car.
Buying a new car is easy and fast in comparison. Just depends how much money you want to spend, how fussy you are with what you buy, and how much risk you want to take in buying someone elseās trouble out of warranty. How many folks here ask should I fix or trade? Those trades end up on the used car lot. I bought my Pontiac though with 30K, current model year, and put another 100K on it with pretty much no problems. Iād do it again no problem but would also go new if the price and product were acceptable for a 2nd car. For our first car I wouldnāt consider used-even gently.
So much depends on personal preference and what you need the car to do.
If your only criteria was the lowest cost possible, probably buying a beater and doing the bare minimum maintenance is preferred; youāll have to deal with the greatly reduced reliability. If your only criteria is the most comfortable, reliable ride, probably buying new and trading in every 2-5 years is preferred; this is the most costly. For our personal vehicles, most people fall within those two extremes. āBang for the buckā is dependent on what youāre willing to compromise.
My wife wants brand new; her thinking is that she doesnāt want someone elseās problems; however, we do keep those vehicles 10+ years. I just recently replaced my hand-me-down car with a used vehicle. Itās been almost seven months, and, so far, so good. I will probably have an additional $1,000 or so in expenses within the first year (tires, a spare key fob, maybe a brake job), but purchased the vehicle for $8,000-$10,000 less than a comparable new vehicle. Iām thinking this was a good deal for me.
I think the answer is dependent on how many miles you drive a year and do you live in the rust belt. If you drive 30,000 mile a year, you might as well buy new, you can probably wear it out. For most people it will be cheapest to buy a 3-5 year old car in good condition from a make with a good reputation for durability and maintain it well.
I didnāt do that myself. In my area, rust is a major factor and owning a new car means you put off dealing with the rust for quite a while and I have reached the stage of life where I can afford it. I will still probably still keep my car 10 years if I am still driving or alive.
With all of the BS smoke and mirrors involved in car pricing I donāt see how anyone can ever figure out that they saved anythingā¦
Perception goes a long way.
Everybody gets a good deal on a car. Have you ever talked to anyone that admits they got a bad deal?
Have you ever bought a car and not had doubts?