New car vs used cars (long)

[jsmith]

I dont know what your budget is-but i was in the market for a small crossover to replace my 8 year old diesel VW beetle. I loved my beetle and it got fantastic mileage but it was an ungodly money pit. At the end of July i purchased a 2013 Acura RDX. Honda reliablity stepped up a bit. It was more expensive than the Rogue but the value of the warrenty offset that. It AWD, comfortable for 4 adults-actually probably has more room in it than the Rogue -ive had a rogue as a rental a couple of times-gets good mileage for the size-im running about 24 over all-22 -23 in the city and 30-32 on the highway depending on the terrain. And it has a 6 cylinder engine-which is actually important to us since we live in Colorado and a 4 banger just does not go up big hills so well.

 

[Bungle]

We prefer used cars, but it is just that, a preference. We prefer to put at least half down but I wouldn't get anything you can't put 1/3 down on I also wouldn't get anything a dollar over what I could pay off in three years, and probably not a nissan. I had a sentra once and it was a horrid experience

 

[hops&dreams]

I would buy a used Toyota or Honda before a new American car any day.

This. Absolutely this. A 5, 10, or 15 year old Honda will always be a better bet/ more reliable than its counterpart made by GM, Ford, or Chysler.

 

[C_leen]

Mazda cx5. We just traded in our 9 yo CRV. Right now it has best mileage for a small SUV. It priced out cheaper for their loaded AWD than a BMW x1, x3 or mini countryman.

 

[sookie]

I was also going to say this...

On a new car, at the dealership a lot of the time they will say that you can get either a credit amount (like 2000 credit on the car) or 0% financing.


Crunching the numbers, it usually works out better to take the 2000 off the top of the car and then take the credit union financing. We go in with our financing with the CU done and go in with a check. Then haggle - it is like working with cash.

 

[tb1972]

I just bought a 2013 Nissan Altima this week. DH had a corporate Nissan discount through his employer which made sense to buy new instead of used. So far, so good. I like the Nissan and I did test drive other sedans for comparison.

I previously drove a Camry for 12 years which I also bought new. As the other posters mention, new cars are a good choice if you intend to keep them for years.

 

[Ashlotte]

I will play devil's advocate, since it sounds like the majority are for buying new. We have never bought new and have never had a car payment (which is soooo nice!). We wait until we have cash to buy a 3 or 4 year old car with around 50-60,000 miles, and then drive it for a decade. We ALWAYS have the car checked out by a mechanic first, and we always buy private party, making sure we are buying it from the original owner that has all of the maintenance records, accident free, and a clean title. I would not buy a used car without knowing who was driving it. Also, we do research first by checking consumer reports for used cars, which usually leads us back to Hondas

Nine years ago we bought a five year old Civic, and that car has been fantastic. We just recently replaced it with a 2009 Civic that we bought for only $9000. No complaints! Used is totally fine if you cover all of your bases and do your homework.

 

[aclov]

I am reading this thread with interest!
We are looking and already having this debate in my house too, and we won't be buying for another year.
As has been mentioned, what is looking like the best deal for us will be to get a 2013 as they are rolling out the 2014's. We are strongly considering a Honda CRV or a Toyota Rav4 for all of the reasons mentioned in this thread. However we have access to the GM employee discount as well which will essentially save us all the taxes and fees on a Equinox or a Traverse.

Bottom line, it isn't looking like it would save us much or anything really to go used, and I would far prefer to not have the worries and headaches of what might be wrong with the used car.

Same situation here, my dad has always preached to buy NEW, saying you don't want anyone else's problems, so I have always purchased new. I have had problems even with new cars but the warranty has always covered me, most recently I need a new transmission that wouldn't of been cheap. But was considering used since I wouldn't be driving very far but still want a reliable car. We have access to GM and Chevy discounts.

 

[Colleen27]

With used car prices where they are right now, I think the only argument to be made against buying new comes in if new requires financing while used can be done with cash. But if you're financing either way I think it makes more sense to go with the new car because that way you have a far better chance of getting the loan paid off before needing to put money into the car, and of having a dependable vehicle with some resale value at the end of the loan term.

And I say that as someone who will probably never buy brand-new (or finance a used car) again - for our last brand-new car the insurance required by the finance company cost more per month than the car note, and I'd rather just carry PLPD and put the collision/comprehensive premiums into savings instead as a way of basically "self insuring". But if I was going to finance a car it would be a brand new one.

 

[ssawka]

With used car prices where they are right now, I think the only argument to be made against buying new comes in if new requires financing while used can be done with cash. But if you're financing either way I think it makes more sense to go with the new car because that way you have a far better chance of getting the loan paid off before needing to put money into the car, and of having a dependable vehicle with some resale value at the end of the loan term.

And I say that as someone who will probably never buy brand-new (or finance a used car) again - for our last brand-new car the insurance required by the finance company cost more per month than the car note, and I'd rather just carry PLPD and put the collision/comprehensive premiums into savings instead as a way of basically "self insuring". But if I was going to finance a car it would be a brand new one.

If you can qualify for a discount finance rate, the financing charge becomes a moot point Really, on a reasonably priced car 0-2% is not a lot of money. For example, if you take out a 5 year loan on $20,000 at 2% you will pay a little over $1,000 in interest total. Spread over 5 year, that is not a lot of money. Would it be better to not pay that? Sure, but it is not a lot of money considering you'll probably have to put more into a used car just in maintenance, assuming you continue to follow the maintenance schedule.

Also, insurance depends on the kind of car you get. If you downsize, like I did, you may actually find that your insurance drops.

 

[Robbi]

OP, I was not going to post this but I feel that I should. I too had a bad Nissan experience. This was several years ago. I bought a minivan and had nothing but trouble. In fact, for some reason they put the engine under the driver's seat and they began catching fire! It happened to my son's friend's mom. The service people were the rudest I've ever encountered and yes, I did state that on a survey sent by Nissan. The guy kept telling me my car was not making a certain noise. He also talked down to me. I told both he and Nissan that I would never buy another Nissan and I haven't. BTW, when my husband took my car back about the noise, amazingly enough, the service guy heard it.

About the domestic vs foreign car debate. I've had Chryslers and absolutely loved them! Some of the American companies are now affiliated with foreign car companies. Domestic cars, for the most part, do not have good resale value though.

 

[pigletto]

OP, I was not going to post this but I feel that I should. I too had a bad Nissan experience. This was several years ago. I bought a minivan and had nothing but trouble. In fact, for some reason they put the engine under the driver's seat and they began catching fire! It happened to my son's friend's mom. The service people were the rudest I've ever encountered and yes, I did state that on a survey sent by Nissan. The guy kept telling me my car was not making a certain noise. He also talked down to me. I told both he and Nissan that I would never buy another Nissan and I haven't. BTW, when my husband took my car back about the noise, amazingly enough, the service guy heard it.

About the domestic vs foreign car debate. I've had Chryslers and absolutely loved them! Some of the American companies are now affiliated with foreign car companies. Domestic cars, for the most part, do not have good resale value though.

At one point my parents bought cars for 2 of my siblings and an Armada for themselves. They did have many issues and felt the service was so deplorable from the dealer that they have taken all their business to Volkswagen. One of my siblings (there are a lot of us!) is still driving the Armada but the two cars are long gone and they won't ever use them again. I didn't comment earlier because it never involved me enough to hear what the specific issues were.. I just know they are done with them and much happier with the Jettas and Touaregs they have now.

 

[arthuruscg]

We prefer used cars, but it is just that, a preference. We prefer to put at least half down but I wouldn't get anything you can't put 1/3 down on I also wouldn't get anything a dollar over what I could pay off in three years, and probably not a nissan. I had a sentra once and it was a horrid experience

Look at the big financial picture. Putting 1/3 down saves only the 2% interest you would be charged, but if you put that 1/3 into your IRA, your return on investment would be greater.

If you can qualify for a discount finance rate, the financing charge becomes a moot point Really, on a reasonably priced car 0-2% is not a lot of money. For example, if you take out a 5 year loan on $20,000 at 2% you will pay a little over $1,000 in interest total. Spread over 5 year, that is not a lot of money. Would it be better to not pay that? Sure, but it is not a lot of money considering you'll probably have to put more into a used car just in maintenance, assuming you continue to follow the maintenance schedule.

Also, insurance depends on the kind of car you get. If you downsize, like I did, you may actually find that your insurance drops.

Take a 2/3 year old version of the same car, and paid 15,000 cash for it. You would be missing on on the 5% return by not investing it in your retirement. Or, if your house loan is say 6.125%, you would be saving more money by paying the house loan down the 15K cash you had and financing the new car.

When my wife went from a 2003 Hyundai Accent to an 2008 Subaru Outback. her insurance drop $200 per year and we moved up in both size and quality.

My parents and I use to preach buying used cars, but the quality used car prices in our area are thru the roof and I have a hard time justifying the $2k saved on a 2 year old car with 2 year less warrenty.

 

[ssawka]

Take a 2/3 year old version of the same car, and paid 15,000 cash for it. You would be missing on on the 5% return by not investing it in your retirement. Or, if your house loan is say 6.125%, you would be saving more money by paying the house loan down the 15K cash you had and financing the new car.

Yes, but with a 2/3 year old car you are looking at purchasing a car that is most likely coming to an end of its warranty period. Sure, you could get an extended warranty but how much would that eat into your savings and would it be comparable to the manufacturers warranty. When we buy a car, we generally buy new, not because we want a new car but because we want the piece of mine that comes with a new car. If we were to buy used again, it would have to be a certified used car that comes with an extended warranty.

Also, where are you getting a 5% return on investment now a days?

Lastly, I know you only gave the 6.125% as an example, but if your mortgage is that high it is time to look at refinancing, if you can.

 

[arthuruscg]

I am using the 10 year F fund return in the example.
https://www.tsp.gov/investmentfunds/annual/annualReturns.shtml

We are in the process of refi. We are underwater but were selected as part of BOA settlement with the state of MD. So, current market rate here I come.

 

[Fly4free]

You sound EXACTLY like my boss. He also had a 2003 Nissan Pathfinder he bought used. He was sinking money into it constantly over the last 2 years or so. He ended up just replacing it with a NEW Toyota Highlander.

We also buy NEW for the same reasons listed on this thread. We both have longer commutes and we need reliable cars. We are not good at car stuff outside of normal maintenance. We also only want 1 car payment at a time. So we buy New. When that car is paid off we usually start the process to replace the other car. So basically we get one NEW car every 4-5 years but drive our cars 9-10 years.

My parents have always criticized our choice to buy new cars. They used lots of the old arguments. But we cannot afford to have a car let us sit and I do not tolerate huge unexpected car bills especially towards the end of a cars life. I would rather pay a set car payment every month. Funny thing is, my Dad just bought his first NEW car ever this summer (although they paid cash for it). He said when all was said and done, he basically only spent $2000 more for a brand new car over one with 30,000 miles on it. Yup....exactly what we have been saying for years

That's what we do too. Only 1 car payment at a time and at least 1 car is covered under warranty. Dh has been burned by buying used cars and we feel it isn't worth the trouble to save a few$.

With such low interest rates now is an awesome time to buy a new car. I would bet anything, OP, if you sit down with dh and compare the total cost of new vs. used you wouldn't be saving as much as you might think buying used.

 

[brunette8706]

If your current Nissan has always been a money pit, why buy another Nissan?

That was EXACTLY the same question I was going to ask.

 

[Pigeon]

I think it depends on the car. If you are going to buy a high end car or a big truck, it might make sense to buy used. If you are looking for a reasonably priced family car it might not.

The last two cars we bought, I was sure we were going to get used, despite the fact that we'd always bought new. In both cases, the price of a new car was a little less than one that was a year or two old, unless you wanted to go with very high mileage. We ended up getting new ones.

One of the cars is an Altima, which has been awesome and a really good value. My sister and dh's brother both also have had Altimas for many years and have had excellent experiences with them.

Prior to the Altima, we had been drivng mostly Toyotas for decades. The Altima we bought because dh is extremely tall, and has been having back problems. The Altima is the most comfortable car he's ever had.

 

[hsmamato2]

With used car prices where they are right now, I think the only argument to be made against buying new comes in if new requires financing while used can be done with cash. But if you're financing either way I think it makes more sense to go with the new car because that way you have a far better chance of getting the loan paid off before needing to put money into the car, and of having a dependable vehicle with some resale value at the end of the loan term.

And I say that as someone who will probably never buy brand-new (or finance a used car) again - for our last brand-new car the insurance required by the finance company cost more per month than the car note, and I'd rather just carry PLPD and put the collision/comprehensive premiums into savings instead as a way of basically "self insuring". But if I was going to finance a car it would be a brand new one.

Exactly our situation. been married 23 years this is our first new car ever. We always bought used,and the 'new economy' forced us to rethink our used vs. new train of thought. for 2500.00 more than the cost of a used model with no warranty and someone else driving history,we got a brand new car with no headaches,which we are financing b/c it works well for us to do so right now -I know we'll have this car for at least 15 more years minimum anyways,long after the warranty has expired.....I'm not overstating the difference in price here, we looked for MONTHS at every used car that we wanted all over this side of the country! used made no sense in our situation. Our insurance went up a *teensy* bit per month when we switched from our 17 year old van to our BRAND NEW car....but not much,since we carried full coverage anyway

 

[hsmamato2]

I think it depends on the car. If you are going to buy a high end car or a big truck, it might make sense to buy used. If you are looking for a reasonably priced family car it might not.

.

this makes sense,since that's us! we got a 'base' model family car (it's such a great car!)