The economics of car ownership and buying new versus used

[NutBucket]

It's all about priorities in life. I'm not spending 8 hours a week a POS to save money. Nor would I be interested in driving a POS hundreds of miles to go snowboarding, etc.

However, nobody will argue that financially speaking, cars are terrible.

 

[WackyDan]

It's ridiculously expensive on a new car. I don't carry collision, because I don't buy new and I don't crash my car.

Financially speaking, it's usually a good idea to have a car that isn't worth anything. Unless you need a status symbol to get a promotion at work or something, a car is a lousy place to keep value, because it will continue to depreciate. The money spent on a more valuable car could have been invested in something that will appreciate. New cars are usually "better", but that better is extremely expensive.

I'm 44 years old, married, etc... My full coverage on both vehicles is pretty damn cheap overall compared to when I was young.

I bought a new truck as used weren't much cheaper and I also needed to tow a trailer that would occasionally push 8000-9000 pounds. That meant I wanted something more reliable than an old beater.

There is a lot to be said for a beater... I miss not washing them, not worrying about getting door'd, etc...I do not miss the lack of comfort or the surprise fixes.

 

[railer]

Bullshit.

I bought a new 2012 F-150 in January of 2012. I searched everywhere for a two to three year old truck to buy from private sellers. You know what I found? I lot of trucks with 40-70k already on them that while they may have had what I needed the asking price was too high and any negotiation lower was met with stupid BS...One guy was asking over the KBB/Edmonds perfect condition price because that is what he owed the bank.

So off to the dealer I went. What did I find? A ton of used trucks two years old marked at $29,999... I was able to negotiate a brand new 2012 loaded to the gills and with full factory warranty and zero miles for only $4k more than the used price....

The better deal was the new truck... Especially considering I keep my vehicles ten+ years.

So the two year old car logic doesn't always hold true depending the vehicle and vehicle class and also depends on how long you keep your vehicle.

Yeah I'll second that for full sized trucks. They hold their value extremely well. My family is in the auto business, and as such has access to regional dealer auctions. On my last trip to a large regional auction, my jaw dropped upon seeing 2012 F150's and Ram's with around 90k miles, going for nearly $20k. I can get a brand new 2014 F150 for high 20's, so the used vehicle math falls on its face in that scenario.

 

[Yuriman]

Yes, that happens.

I bought a 2001 Prius that was almost a year old, driven as a dealer demo, with low 4-digit mileage. Only got $1000 off.

However, I didn't mind too much because the car was basically non-existent, and waits for new cars was something like 6 months. So, essentially I paid a premium over classic used to get a tech toy immediately. (That was North America's first hybrid.)


I agree, but your two points do go to show you, there is no one option for everyone, for all potential car purchases.

How do you figure a 2001 Prius came before a 2000 Insight?

AFAIK the Prius beat the Insight to market in Japan, but the Insight won to market in NA.

 

[Eug]

How do you figure a 2001 Prius came before a 2000 Insight?

AFAIK the Prius beat the Insight to market in Japan, but the Insight won to market in NA.

True. I forgot about the North American timing vs. the Insight. I disliked that car by the way. I had absolute zero interest in buying an Insight.

 

[NutBucket]

Sad since the Insight is probably a better hybrid. 70mpg highway? Thanks!

 

[Yuriman]

True. I forgot about the North American timing vs. the Insight. I disliked that car by the way. I had absolute zero interest in buying an Insight.

Fair enough. Likewise with me and the Prius.

 

[Eug]

Sad since the Insight is probably a better hybrid. 70mpg highway? Thanks!

As a real world car, the original Insight was not very useful IMO. As a technology demo, it was interesting.

YMMV.

 

[Yuriman]

As a real world car, the original Insight was not very useful IMO. As a technology demo, it was interesting.

YMMV.

For what it's worth, you don't see too many 2001 Prii on the road with 400,000+ miles and the original transmission + battery. The Insight's drivetrain (w/5MT) is incredibly reliable. I have no use for backseats but I do make use of the lower maintenance and fuel costs. I'm a minority, but as many as were made (which wasn't all that many) found homes.

That, and you'd have to pay me to drive an automatic.

But, I digress.

 

[mindless1]

It's all about priorities in life. I'm not spending 8 hours a week a POS to save money. Nor would I be interested in driving a POS hundreds of miles to go snowboarding, etc.

However, nobody will argue that financially speaking, cars are terrible.

By "priorities" I assume you really mean misconceptions. Vehicles made in the last 20 years are remarkably more reliable than those from 30+ years ago, once you discount the extra features which if broken would just be something the older counterpart didn't even have.

My oldest vehicle is now 17 years old. I don't drive it every day but used to. Avg. time spent on it is far less than an hour a week. Come to think of it last year was a high maintenance year from replacing the spark plugs, wires, and shocks which took about 3 hours and even that length of time was dragged out due to complications getting to the spark plugs.

Everything else was the same maintenance one would do on a regular basis to any vehicle including a new one as it ages only a little (oil, brakes, tires, wipers, etc). 3 hours / 52 weeks = 3.5 minutes per week. Suppose I end up needing a new radiator this year or to clean the IAC valve. That's a couple hours instead of 3 so my average drops to 2.3 minutes/week. You might claim I can't know what repairs lie ahead but I do already know what repairs lie behind and have never averaged over 3 hours per year.

You can buy a used lemon, but you could have also been the person who bought that lemon new. Pick wisely instead of buying something with one foot already in the grave and treat it right, you won't have to spend much extra time maintaining it.

If you treat a vehicle badly because you have a misconception that it is a POS then it will become one. Don't wash it and it will look bad. Don't put new shocks/struts on and buy cheap tires and it'll handle worse. Don't keep the inside clean and dry and it'll smell funky, old OR new.

 

[thedarkwolf]

Even my massive crap heap $800 89 dodge caravan had power everything and a/c all of which worked. What else do you need ? Drove that thing completely into the ground and sold it for $500 12 years later.

 

[monkeydelmagico]

J. Baruth of TTAC puts it eloquently: Hint: It isn't always about the $$$

 

[halik]

J. Baruth of TTAC puts it eloquently: Hint: It isn't always about the $$$

Well yeah - any used car, especially luxury, has a big tail risk on the $$ repair needed. I had a 911 4S that proved to be super reliable well over 100K, with a very small, yet real risk of blowing an engine to the tune of $10K.

 

[exar333]

You know, we are in a garage forum for 'enthusiasts'? We all can live just fine in grass huts, with a bicycle and eating from our own gardens too. Not everyone wants that.

I enjoy driving an engaging vehicle. That doesn't mean $$$ all the time, but how hard would you want to push a $800 20-year old car that you rely on to get to/from work?

Not everything in life is an investment. When you die, you can't take your $$$ with you.

 

[NutBucket]

By "priorities" I assume you really mean misconceptions. Vehicles made in the last 20 years are remarkably more reliable than those from 30+ years ago, once you discount the extra features which if broken would just be something the older counterpart didn't even have.

My oldest vehicle is now 17 years old. I don't drive it every day but used to. Avg. time spent on it is far less than an hour a week. Come to think of it last year was a high maintenance year from replacing the spark plugs, wires, and shocks which took about 3 hours and even that length of time was dragged out due to complications getting to the spark plugs.

Everything else was the same maintenance one would do on a regular basis to any vehicle including a new one as it ages only a little (oil, brakes, tires, wipers, etc). 3 hours / 52 weeks = 3.5 minutes per week. Suppose I end up needing a new radiator this year or to clean the IAC valve. That's a couple hours instead of 3 so my average drops to 2.3 minutes/week. You might claim I can't know what repairs lie ahead but I do already know what repairs lie behind and have never averaged over 3 hours per year.

You can buy a used lemon, but you could have also been the person who bought that lemon new. Pick wisely instead of buying something with one foot already in the grave and treat it right, you won't have to spend much extra time maintaining it.

If you treat a vehicle badly because you have a misconception that it is a POS then it will become one. Don't wash it and it will look bad. Don't put new shocks/struts on and buy cheap tires and it'll handle worse. Don't keep the inside clean and dry and it'll smell funky, old OR new.

You only talk about reliability.

How much do you actually use your cars? Do you spend significant time in them? Do you consider the safety of others (like your kids)? I had a 1991 Accord that I loved. Easy to maintain, comfortable, drove well and didn't look half bad either. But let's be honest, the thing is a tin can and I would not drive my kid around in it.

Not everything in life is an investment. When you die, you can't take your $$$ with you.

And this for sure.

 

[JulesMaximus]

I prefer to buy new. At least then I know the vehicle has been properly maintained from day one. I keep them for 8-10 years and then buy another new car. I don't give a crap about depreciation. Cars are not investments, they are consumable items.

 

[Torn Mind]

How mechanically inclined are you and the parts cost play a big factor how whether to go used or new, or even lightly used vs super old beater. If you're handy, you can cut the labor costs down to solely time burned in repairs by either fixing them or being able to spot them while looking at the vehicle. If you're looking for a Mercedes or BMW, you might as well buy new because you're going to leave your wallet lighter anyway.

Also, licensing and registration on old vehicles might make an old beater and viable buy. Here in where I live, cars tagged Historic don't need emissions or safety inspections; they just need to be 20 years old or older.

 

[Eug]

I am not mechanically inclined when it comes to cars. But what I've discovered is a lot of people who think they are really aren't either. The cars these days are not the carbureted V8s of the 1970s.

The other thing is DIY is cheaper yes, but that considers your time worthless.

The one time I did a DIY fix is when Toyota wanted $3000 (new) or $1200 (used) to fix my multimedia display, which was defective. The display itself was expensive since it was a custom part, but it was also labour intensive since you had to dismantle the entire dash to do it. However, some guy in the US would fix these for $300, and provide instructions on how to install them. Took me many hours, but I figured to save $900 it'd be worth it.

However, the other thing about this is it had nothing to do with the mechanics of the car. It was purely an electronics thing, so as someone not so mechanically inclined I felt more comfortable doing it.

 

[Vdubchaos]

To answer this question one has to consider # of factors.

a) how do you treat your car
b) if you maintain it proper
c) do you work on it yourself or have people do the work
d) how much do you use it (miles per year)

Personally, I don't see myself buying a new car .......EVER. But at the same time, I struggle to find used cars that have been properly maintained and service records documented.

Just glad I'm not buying a car any time soon, it will be tough.

 

[NutBucket]

That's arguable...your DIY bit.

If you pay a shop to work on your car the cost is $120/hr let's say. By doing it yourself you're basically "paying" yourself $120/hr. You know, a penny saved is a penny earned?

Plus, many people enjoy DIY. I like it working on cars, mowing the lawn, etc. It's a nice break from my day job and I find it rewarding to step back and see what I've accomplished.

 

[Vdubchaos]

I am not mechanically inclined when it comes to cars. But what I've discovered is a lot of people who think they are really aren't either. The cars these days are not the carbureted V8s of the 1970s.

Henry Ford -
“Whether you think you can, or you think you can't--you're right.”

I used to think like you. Here I am 15 years later, a complete do it yourselfer. Have put in COUNTLESS hours working on my/families/friends and others cars past 15 years.

Saved AT LEAST 20k doing so.

Heck, I don't know what I can't do at this point. Actually there is one thing, I don't do taxes.

The other thing is DIY is cheaper yes, but that considers your time worthless.

The one time I did a DIY fix is when Toyota wanted $3000 (new) or $1200 (used) to fix my multimedia display, which was defective. The display itself was expensive since it was a custom part, but it was also labour intensive since you had to dismantle the entire dash to do it. However, some guy in the US would fix these for $300, and provide instructions on how to install them. Took me many hours, but I figured to save $900 it'd be worth it.

However, the other thing about this is it had nothing to do with the mechanics of the car. It was purely an electronics thing, so as someone not so mechanically inclined I felt more comfortable doing it.

If you bought a car with a "multimedia display" that costs that much......well, there si your problem.

Buy simple, proven technology.

Any time you get "latest and greatest" you buy at premium price and buy technology that hasn't been proven and has 0 track record.

Also, there is 0 knowledge out there to help you when there is trouble.

When it comes to cars, less is more. More option you get, less reliable car will be in the future.

 

[Vdubchaos]

That's arguable...your DIY bit.

If you pay a shop to work on your car the cost is $120/hr let's say. By doing it yourself you're basically "paying" yourself $120/hr. You know, a penny saved is a penny earned?

Plus, many people enjoy DIY. I like it working on cars, mowing the lawn, etc. It's a nice break from my day job and I find it rewarding to step back and see what I've accomplished.

That's correct.

Sense of accomplishment I get from doing things is a BIG part of my life and an important one as well.

Also, over the years, back when I wasn't DIYer, I've paid people BIG money to do the work for me and was extremely disappointed.

My theory at this point is....no ONE cares about your stuff as much as YOU do. If you want things to get done RIGHT, do it yourself. Or pay someone premium to get it done "ok", sometimes, not even OK.

I know there is ALWAYS exceptions to this rule but it's a good rule to go by.

 

[NutBucket]

I hired a guy to refinish my wood floors...because after having done it twice before I was tired of it!

 

[Eug]

That's arguable...your DIY bit.

If you pay a shop to work on your car the cost is $120/hr let's say. By doing it yourself you're basically "paying" yourself $120/hr. You know, a penny saved is a penny earned?

Plus, many people enjoy DIY. I like it working on cars, mowing the lawn, etc. It's a nice break from my day job and I find it rewarding to step back and see what I've accomplished.

When I got my first Prius, I couldn't take it to my local Toyota dealer, because their mechanics weren't certified to work on it. I had to take it across town, since they had a Prius certified mechanic. But only one, so setting up the appointments was more complicated.

Henry Ford -
“Whether you think you can, or you think you can't--you're right.”

I used to think like you. Here I am 15 years later, a complete do it yourselfer. Have put in COUNTLESS hours working on my/families/friends and others cars past 15 years.

Saved AT LEAST 20k doing so.

Heck, I saved almost CAD$20000 just this weekend alone simply by buying a used Prius and haggling, for a car that looks brand new.

If you bought a car with a "multimedia display" that costs that much......well, there si your problem.

Buy simple, proven technology.

Any time you get "latest and greatest" you buy at premium price and buy technology that hasn't been proven and has 0 track record.

Also, there is 0 knowledge out there to help you when there is trouble.

When it comes to cars, less is more. More option you get, less reliable car will be in the future.

The insurance company just wrote off my 2004 Prius because it got rear-ended. They paid me $9000 for that 11 year-old car. The current going rate for Priuses of that era in good condition with the trim package I had is in the $7000-10000 range (including tax), depending on the mileage.

 

[JulesMaximus]

That's arguable...your DIY bit.

If you pay a shop to work on your car the cost is $120/hr let's say. By doing it yourself you're basically "paying" yourself $120/hr. You know, a penny saved is a penny earned?

Plus, many people enjoy DIY. I like it working on cars, mowing the lawn, etc. It's a nice break from my day job and I find it rewarding to step back and see what I've accomplished.

Of course, it might take you 3 times longer to do the same job... but we won't go there.