4 ms·

Carmax / Carvana seem to basically charge new car MSRP + tax + fees if you want to buy a one to two year old used car with 5-15k miles, at least in my experienc

by vesrah 8y ago

Carmax / Carvana seem to basically charge new car MSRP + tax + fees if you want to buy a one to two year old used car with 5-15k miles, at least in my experience, so I ended up ahead just buying the same model new from a dealer. They also have pretty high interest rates and it is in your best interest to do the 'backdoor' method into PenFed for their rates, which are pretty good. I have sold cars to Carmax; Carvana requires an official payoff letter from your lien holder, unlike Carmax, which can be a pain or take a decent chunk of time, depending on the lien holder.

pfranz 8y ago
It seems like since the cash for clunkers program in 2009 the used car market hasn't been a very good deal. Last year I was looking at getting a 1-3 year old car and hoping to save money. For 5-10% more I could get it new and choose exactly what I want (my state charges the same tax rate on used cars). My guess is that it's due to a combination of that program and wages not growing since the recession. It seemed like a lot of people used to buy brand new cars every few years. Someone like me could pick up something a year or two old for 50% off the original price and drive it for 5-10 years. I've heard stories of people buying 2-3 year old cars, selling them after a year or two for effectively the same price they bought it at. You may still be able to do that, just at a price closer to original sticker price.
- argonaut 8y ago
  My own theory is that everyone else is thinking the exact same thing: looking for a "great deal" 1-3 year old used car. So demand for these cars is quite high. Modern cars are much more reliable than before, and that is reflected in the price you pay for a lightly used car. Used luxury cars still have a lot of depreciation and 1-3 year old luxury cars can be a good deal; my guess is that luxury cars tend to be more costly to maintain and less reliable than regular cars. Also, luxury car owners tend to lease their cars, which creates a large market of used luxury cars.
  - madcaptenor 8y ago
    Also, the point of a luxury car is to show off that you can afford a luxury car, so a 3-year-old luxury car doesn't have the same cachet as a new one. The point of a "normal" car is transportation, which a 3-year-old car can do just as well as a new one.
    - pfranz 8y ago
      I knew quite a few people who had a dream of owning a specific nicer brand, like BMW. They started making decent money and bought one that was 3-5 years old. Literally 6mo later they'd dump it at a loss because during that time it was constantly in the shop and each repair cost was ridiculous. I now know a few people who own nicer cars for peer and client status reasons (I'm sure they like having a nice car, too). Leasing or selling the new car after a couple years seems like the only sane way to operate. A friend bought a Mini Cooper new and drove it for 10 years. It had very low milage because for quite a few years it wasn't needed much. For the most part it ran fine, but paying for expensive brake pads, run-flat tires (no spare), and other maintenance on a car where the glove box wouldn't stay closed and the cloth headliner sagged down just didn't make sense.
- ec109685 8y ago
  The idea you pay sales tax every time the car is sold is frustrating. It feels like double dipping by the government.

by vesrah 8y ago

pfranz 8y ago

It seems like since the cash for clunkers program in 2009 the used car market hasn't been a very good deal. Last year I was looking at getting a 1-3 year old car and hoping to save money. For 5-10% more I could get it new and choose exactly what I want (my state charges the same tax rate on used cars). My guess is that it's due to a combination of that program and wages not growing since the recession. It seemed like a lot of people used to buy brand new cars every few years. Someone like me could pick up something a year or two old for 50% off the original price and drive it for 5-10 years. I've heard stories of people buying 2-3 year old cars, selling them after a year or two for effectively the same price they bought it at. You may still be able to do that, just at a price closer to original sticker price.

argonaut 8y ago
My own theory is that everyone else is thinking the exact same thing: looking for a "great deal" 1-3 year old used car. So demand for these cars is quite high. Modern cars are much more reliable than before, and that is reflected in the price you pay for a lightly used car. Used luxury cars still have a lot of depreciation and 1-3 year old luxury cars can be a good deal; my guess is that luxury cars tend to be more costly to maintain and less reliable than regular cars. Also, luxury car owners tend to lease their cars, which creates a large market of used luxury cars.
- madcaptenor 8y ago
  Also, the point of a luxury car is to show off that you can afford a luxury car, so a 3-year-old luxury car doesn't have the same cachet as a new one. The point of a "normal" car is transportation, which a 3-year-old car can do just as well as a new one.
  - pfranz 8y ago
    I knew quite a few people who had a dream of owning a specific nicer brand, like BMW. They started making decent money and bought one that was 3-5 years old. Literally 6mo later they'd dump it at a loss because during that time it was constantly in the shop and each repair cost was ridiculous. I now know a few people who own nicer cars for peer and client status reasons (I'm sure they like having a nice car, too). Leasing or selling the new car after a couple years seems like the only sane way to operate. A friend bought a Mini Cooper new and drove it for 10 years. It had very low milage because for quite a few years it wasn't needed much. For the most part it ran fine, but paying for expensive brake pads, run-flat tires (no spare), and other maintenance on a car where the glove box wouldn't stay closed and the cloth headliner sagged down just didn't make sense.
ec109685 8y ago
The idea you pay sales tax every time the car is sold is frustrating. It feels like double dipping by the government.