6 ms·

I'm twice bitten, once shy on used cars. I know plenty of people who are reasonably frugal who still go for the new car, though I think they view it as more o

by geebee 12y ago

I'm twice bitten, once shy on used cars. I know plenty of people who are reasonably frugal who still go for the new car, though I think they view it as more of a slightly risk-averse heuristic than an optimal decision. I think most of them recognize that with planning, effort, and a bit (but not a ton) of luck, they probably would do better used. The risk averse heuristic goes like this: identify a car with a reputation for value, purchase under a buyer's plan, take very good care of itfor the useful life of the car. These aren't the people who show up in a shiny new car every few years - they often keep the car for 15 years or more. Like I said, it's a bit risk and effort averse, since with a lot of research, careful evaluation (including a mechanic inspection), and a bit of luck (more the absence of bad luck), you can definitely beat the above strategy by going used. It's a lot of effort, though. Personally, I did all the things you're supposed to do, and still ended up with lots of $$ repair bills, so I'm no longer interested in used cars. I understand that I got unlucky, but I'm just done. I suppose I'm also particularly convinced by the argument that people generally don't sell good used cars, since I'm one of those people who hangs onto a car until it costs me more to own it than replace it.

mankyd 12y ago
> It's a lot of effort, though. This x100. My wife and I recently bought a new car. We went into the process assuming that we'd buy a car that was a couple of years old. After 3 months of casual browsing and research, we bought a new car with a few modest upgrades. We even live in a place with plentiful public transit. We've only put 4000 miles on our 10 month old car - and that's _a lot_ of driving for us. The reason being is that we recently had our first child. We have to get him to daycare somehow before we can go to work. Any time our car is in for repairs, one of us simply stays home with him, as relying on the bus schedule to get us to an from the daycare reliably is a pain. Moreover, we're lucky we can do that on a moments notice. If we worked in jobs where we couldn't work from home, we'd be even more incentivized to buy something reliable. We had an 14 year old car before. We got a new car specifically to avoid having to think about it. As long as we find time for a regular oil change, everything keeps running smoothly.
dankoss 12y ago
This was me a few years ago. While I could have bought used, the premium for a known history of the car was worth it since I knew I would keep it for 10+ years. You pay more to reduce some risk over the lifetime of the car.
driverdan 12y ago
Buying a one or two year old car is far better than buying new. The first few years of depreciation are the worst and if the car is a lemon you'll generally know in the first year.
- umsm 12y ago
  Agreed. And many manufacturers offer an extended warranty on used cars. Buy a 1 year old "certified" car many times has a longer warranty than an identical new car at a lower cost.
- ssharp 12y ago
  You also avoid some of the "people don't sell good cars" thing , because so many two year old cars are from people who just lease new cars every two years.
- edvinbesic 12y ago
  This is true in cases where the manufacturer offers 5 year warranty with option to extend. We did just this recently ourselves and bought an 18 month old car. We still have a solid 3 years of factory warranty and can extend for an additional two if we so choose. Some manufacturers only offer 3 years though with no option to extend so the value proposition is not nearly as good IMO if you're buying a vehicle with only a year left on the warranty.
- geebee 12y ago
  The whole point is that this is easier said than done. Yes, cars depreciate rapidly in the first two years, which is why people who own quality non-lemons that are less the 2 years old are generally very reluctant to sell them. If you can find one, that's great, but the deprecation to me has always had more meaning as a reality check for a seller than an opportunity that can be easily obtained as a buyer. For instance, you often hear that a new car loses "10%" (probably more) of its resale value the moment you drive it off the lot. Yes, if you try to sell your car the moment you drive it off the lot, you will lose 10% or more. But go out there and try to buy a car for 90% of what someone just paid for it as they drive it off the lot!
phkahler 12y ago
Buying a new car makes sense IFF: 1) you don't get a luxury car. 2) you actually keep it until repairs are costing you $3000 per year. 3) you can actually buy it without doing financial harm to yourself.
nradov 12y ago
It's more than a financial decision even for frugal consumers. There have been some significant safety improvements in just the last two years, especially on small overlap collisions and automated front crash prevention. http://www.iihs.org/iihs/ratings/TSP-List http://www.iihs.org/iihs/ratings/TSP-List

by geebee 12y ago

mankyd 12y ago

> It's a lot of effort, though. This x100. My wife and I recently bought a new car. We went into the process assuming that we'd buy a car that was a couple of years old. After 3 months of casual browsing and research, we bought a new car with a few modest upgrades. We even live in a place with plentiful public transit. We've only put 4000 miles on our 10 month old car - and that's _a lot_ of driving for us. The reason being is that we recently had our first child. We have to get him to daycare somehow before we can go to work. Any time our car is in for repairs, one of us simply stays home with him, as relying on the bus schedule to get us to an from the daycare reliably is a pain. Moreover, we're lucky we can do that on a moments notice. If we worked in jobs where we couldn't work from home, we'd be even more incentivized to buy something reliable. We had an 14 year old car before. We got a new car specifically to avoid having to think about it. As long as we find time for a regular oil change, everything keeps running smoothly.

dankoss 12y ago

This was me a few years ago. While I could have bought used, the premium for a known history of the car was worth it since I knew I would keep it for 10+ years. You pay more to reduce some risk over the lifetime of the car.

driverdan 12y ago

Buying a one or two year old car is far better than buying new. The first few years of depreciation are the worst and if the car is a lemon you'll generally know in the first year.

umsm 12y ago
Agreed. And many manufacturers offer an extended warranty on used cars. Buy a 1 year old "certified" car many times has a longer warranty than an identical new car at a lower cost.
ssharp 12y ago
You also avoid some of the "people don't sell good cars" thing , because so many two year old cars are from people who just lease new cars every two years.
edvinbesic 12y ago
This is true in cases where the manufacturer offers 5 year warranty with option to extend. We did just this recently ourselves and bought an 18 month old car. We still have a solid 3 years of factory warranty and can extend for an additional two if we so choose. Some manufacturers only offer 3 years though with no option to extend so the value proposition is not nearly as good IMO if you're buying a vehicle with only a year left on the warranty.
geebee 12y ago
The whole point is that this is easier said than done. Yes, cars depreciate rapidly in the first two years, which is why people who own quality non-lemons that are less the 2 years old are generally very reluctant to sell them. If you can find one, that's great, but the deprecation to me has always had more meaning as a reality check for a seller than an opportunity that can be easily obtained as a buyer. For instance, you often hear that a new car loses "10%" (probably more) of its resale value the moment you drive it off the lot. Yes, if you try to sell your car the moment you drive it off the lot, you will lose 10% or more. But go out there and try to buy a car for 90% of what someone just paid for it as they drive it off the lot!

phkahler 12y ago

Buying a new car makes sense IFF: 1) you don't get a luxury car. 2) you actually keep it until repairs are costing you $3000 per year. 3) you can actually buy it without doing financial harm to yourself.

nradov 12y ago

It's more than a financial decision even for frugal consumers. There have been some significant safety improvements in just the last two years, especially on small overlap collisions and automated front crash prevention. http://www.iihs.org/iihs/ratings/TSP-List http://www.iihs.org/iihs/ratings/TSP-List