4 ms·

I'm going to need to see a spreadsheet or something for that claim. 1 year is about 19% depreciation. but only ~5% of life of car

tabeth 9y ago
I'd have to dig it up, but it's the warranty that makes the difference.
- jackmott 9y ago
  I see. I imagine that math is going to depend a lot on brand/model and one's skill at identifying and fixing problems themselves.
  - tabeth 9y ago
    Indeed. I only mention the original post because Hyundai's warranty is better than average and their cars are cheaper than average (for new, anyway). Even though Hyundai's depreciate faster than say, Honda, the depreciation curve is a little different anecdotally, e.g. a one year depreciation for a Hyundai is a little less than a Honda in raw price since the car is already cheap, however a 5 year difference will favor Honda greatly.
  - twblalock 9y ago
    Jack Baruth wrote a great article a few years ago about how owning cheap used cars is a privilege reserved for people who have the skills and time to fix their own cars: http://www.thetruthaboutcars.com/2015/02/no-fixed-abode-gotta-rich-cheap-car/ http://www.thetruthaboutcars.com/2015/02/no-fixed-abode-gott... It seems that he was partly inspired to write this by "the TTAC reader whose response to Bark’s article on subprime buyers was to straight-facedly suggest that a working father swap his own minivan transmission in his apartment parking lot." I used to own beater cars when I was in college and shortly after. I never paid more than $3k for one, and I did all of my own work, including replacing all of the brakes on one of the cars myself. But I like working on things, I already owned the tools, and I had access to good public transit when my car broke down. I would not recommend beater cars to most normal people.
- wnevets 9y ago
  if you buy certified pre-owned like I did you get the warranty without having to buy new.
  - danielvinson 9y ago
    Its not the same warranty with most brands - my current car has a 4-year warranty for almost everything (excludes tires and a few other things that are always excluded), whereas the similar pre-owned models have a 4-year that only covers the engine.
    - wnevets 9y ago
      AFAIK for the Hyundai Elantra (the car mentioned and that I bought) it's the same minus the current years and miles on the car.
twblalock 9y ago
It really depends on the brand. When I bought my Prius, I was looking at 1-3 year old used models that were only about $3-5k less than a new one, and came with a worse warranty. The two years of free maintenance that came standard with the new Prius covered a significant part of the price gap, and the new one had more life left than the used ones, which I think covers the other part of the gap. On the other hand, it rarely makes sense to buy a new Chevrolet or Ford, or Mercedes, for example. The resale value on those is terrible.
gertef 9y ago
Buying new saves on the transaction costs of the resale through a dealer and the risk of buying private used. Buying non-luxury cars is NOT expensive. Throwing away a working car is expensive.

tabeth 9y ago

I'd have to dig it up, but it's the warranty that makes the difference.

jackmott 9y ago
I see. I imagine that math is going to depend a lot on brand/model and one's skill at identifying and fixing problems themselves.
- tabeth 9y ago
  Indeed. I only mention the original post because Hyundai's warranty is better than average and their cars are cheaper than average (for new, anyway). Even though Hyundai's depreciate faster than say, Honda, the depreciation curve is a little different anecdotally, e.g. a one year depreciation for a Hyundai is a little less than a Honda in raw price since the car is already cheap, however a 5 year difference will favor Honda greatly.
- twblalock 9y ago
  Jack Baruth wrote a great article a few years ago about how owning cheap used cars is a privilege reserved for people who have the skills and time to fix their own cars: http://www.thetruthaboutcars.com/2015/02/no-fixed-abode-gotta-rich-cheap-car/ http://www.thetruthaboutcars.com/2015/02/no-fixed-abode-gott... It seems that he was partly inspired to write this by "the TTAC reader whose response to Bark’s article on subprime buyers was to straight-facedly suggest that a working father swap his own minivan transmission in his apartment parking lot." I used to own beater cars when I was in college and shortly after. I never paid more than $3k for one, and I did all of my own work, including replacing all of the brakes on one of the cars myself. But I like working on things, I already owned the tools, and I had access to good public transit when my car broke down. I would not recommend beater cars to most normal people.
wnevets 9y ago
if you buy certified pre-owned like I did you get the warranty without having to buy new.
- danielvinson 9y ago
  Its not the same warranty with most brands - my current car has a 4-year warranty for almost everything (excludes tires and a few other things that are always excluded), whereas the similar pre-owned models have a 4-year that only covers the engine.
  - wnevets 9y ago
    AFAIK for the Hyundai Elantra (the car mentioned and that I bought) it's the same minus the current years and miles on the car.

twblalock 9y ago

It really depends on the brand. When I bought my Prius, I was looking at 1-3 year old used models that were only about $3-5k less than a new one, and came with a worse warranty. The two years of free maintenance that came standard with the new Prius covered a significant part of the price gap, and the new one had more life left than the used ones, which I think covers the other part of the gap. On the other hand, it rarely makes sense to buy a new Chevrolet or Ford, or Mercedes, for example. The resale value on those is terrible.

gertef 9y ago

Buying new saves on the transaction costs of the resale through a dealer and the risk of buying private used. Buying non-luxury cars is NOT expensive. Throwing away a working car is expensive.