Car or truck that is.
Most (all?) financial planning articles seem to say, “no”. Are they right?
Opinions?
My opinion is, no. So much depreciation, very overly priced.
I buy lightly used vehicles that were single owner and maintained or single owner dealership trade-ins and I have had great success with saving tons of money versus buying new.
It kind of depends on what is important to you also, I don’t need a NEW vehicle, and I can do all the maintenance work myself, so the warranty doesn’t light a fire for me as I can do all the work for a fraction of the cost as a shop can.
Some people are going to pay for the service to their vehicles and that’s where the maintenance cost can make a difference on overall investment versus buying new with a warranty that covers maintenance costs. You’ve gotta break it down.
Lifecycle maintenance costs are vastly different for different manufacturers and vehicle types and intended uses.
I like Toyotas for this very reason. They are easy to maintain (They need more than oil changes and brake jobs as most like to posit) and easy to work on. They have great resale value. They last a LONG time when properly maintained.
If you’re going to want a new vehicle and beat/drive the shit out fit it would actually be cheaper to buy it, drive it to the end of warranty and sell it and then move on to the next one than it would be buy used and put all the maintenance costs into it; unless you plan on maintaining it yourself and have the investment of time to do so.
Absolutely not.
Both vehicles I’ve bought have been new. I’d rather buy used but for the two I was looking at, the prices either weren’t that different or there was a major reason to buy new, like a vastly improved transmission.
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In most cases no it’s not worth it.
The only exception I have seen has been diesel trucks. They tend to hold their value very well(at least here in Texas) especially with low miles. The last diesel I purchased(F350) I ended up buying new. For what I was looking for I could have saved a little buying used but the difference wasn’t enough to make it worth it at least in my opinion. I would have had 2 years less warranty, miles(albeit very low), and the difference between that and a end of year new purchase wasn’t enough for me.
Toyota Landcruiser and 4Runner, and Jeep 4door wranglers seem to hold their value to the point where used isnt’t Much of a discount especially when you consider how they could have been treated.
The vehicle you are buying and what you use it for makes a difference. My wife has a thing for Volvo wagons and she only drives 6,000 mile a year. She trades every 4-5 years depending on when the warranty expires. The last one she traded was 4 years old and had 22,000 miles on it. She paid $34,500 for it originally and traded it for $25,000 after getting a $2,500 discount on the new one. It helps by buying at the end of the model year when the new models are already on the lot. When you roll over that kind of equity into a new car, are able to deduct the mileage for her job and get a $600 per month car allowance it make little sense for her to drive a used car. Moral of the story… If you need a pickup to use up hauling rocks, drive 50,000 miles a year and are able to handle unexpected repair cost you are better off driving used. What kills me is the person that buys a cheap Kia that is worth nothing when 5 years old!
Why would it ever be a bad idea?
So the vehicle you want/need is sitting there on the lot, new. But you do not buy it till someone else has owned it for a few years? Makes no sense to me. Buy what you want, when you want.
There are some pretty significant warranty benefits for buying a certified used vehicle. Most power train warranties are much higher.
For example, my daughter bought a certified used 2018 Forester in Feb. had 20K miles and 10 months old. She got remainder of factory bumper 2 bumper, PLUS a 7 year, 100K powertrain (from new). For $1600, she put a “wrap around” B2B warranty good through 100K.
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We have a few vehicles…different purposes and seasons. Fun, work/hauling, transportation. We always buy new, keep them about 45,000 miles and buy new again. It doesn’t make financial sense…it’s an indulgence.
Only if you are very, very wealthy and are buying it through your business as a deductible business expense.
IRS rules for that are very arcane and not at all practical except in some rare circumstances.
Me for years. I had a run of a decade where a new car was my annual treat. That said, I now live in a tax environment that discourages owning high end cars, and as such, I have had my current ride for six years. I will still buy new as I prefer to be able to know exactly what every minute of my vehicles lifecycle has been.
If you’re going to do brand new, I think leasing is a better option that outright buying. If you’re going to buy, certified pre-owned is often the best choice for all the reasons listed here.
Exactly. Toyata Tacomas are the same way. You don’t save much until you get into the really older trucks.
Yeah, I bought a GMC 2500HD about 4 years ago. That truck only gets about 5000-6000 miles/year and tends to be pretty durable so we’ll likely keep it for awhile. And I leased a Z-car about 5 years ago, then bought it out at the end of the lease. That car only gets about 5000 miles/year too and is holding up pretty well, although it only has about 25,000 miles. OTOH, my wife just picked a new Murano Platinum when the previous one hit 45,000 miles.
I agree with leasing. Well-suited to someone who wants a new car every 3 years or so and views a monthly car payment as a perpetual part of their life. I do it both ways, depending on the vehicle and its use. Vehicle leasing gives my financial guy the cold sweats.
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Depends on what you are buying.
When we special ordered a 16 Tacoma for my wife.
It was cheaper the buying used.
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Can you really put a price on new car smell?
Can you really?
I don’t work on vehicles. I don’t want what someone else beat to hell. I don’t like unhappy, expensive surprises.
My wife and I buy new. We both work at the same place, albeit different shifts. It’s about a 50 minute one-way trip (75 miles round-trip). She works 3 days per week, I work 5. We put beaucoup miles on vehicles. I have a GMC Sierra, she has a Dodge Caravan. We jointly have a Nissan Versa that is our “work car” (obviously with our schedules the truck and minivan get used a little each week). The Nissan gets about 25K miles per year, the other two maybe 12K or 13K. Once that Versa is paid off we will roll it into another new “work car”. Of course it’ll have probably 75K on it by that time but oh well.
Learned my lesson about buying used. I always heard “Buy a Honda Civic, they run until the wheels fall off”. About 6 or 7 years ago we bought one used for $7,000. Paid for it with a cashier’s check from our savings account. It had 110K miles on it. Drove it for a while and the temp gauge kept going up to the red zone. I was like “WTF?”. Took it to a shop and found out that apparently Honda Civics had been known to have cracked heads, which was the problem with this one. Was going to cost $1800-1900 to fix a $7,000 car. I said “F**k that” and traded it in to a dealership for a Chevy Spark.
I will NEVER buy someone else’s problem (read: USED vehicle) again in my life.
A lot depends on the car and your expectations of ownership. If you’re not the type to swap cars often and drive them for decades then buying new is a good idea. If you like a new car every so often then not so much.
Some cars used are barely cheaper than new but without some of the benefits. For example, I want to buy my mom a Subaru Crosstrek but a lightly used off lease one is only about $3k cheaper than a brand new one yet has mileage and not all of it’s factory warranty. For the extra $3k I’d rather her driver a brand new car with a brand new warranty.
Otherwise I personally buy used. Sometimes well used. My first and only new car was a two year lease in 2005. When the lease was over in 2007 I bought a 6 year old car and drove it to 2014 when I sold it and bought a 4 year old car which I still have but plan to sell. Late summer of 18 I bought a 11 year old used SUV.