Buying a used car in 2024 is stupid

[Anonymous]

Anonymous wrote:

Anonymous wrote:Oh, this is interesting. This is a completely new mentality than the one that was pounded into our heads our entire lives. We have always been told not to buy new cars.

Here's a good thought exercise.

A family in Maryland needs a new minivan, they have $10K for a downpayment. They want a nicer trimline, because they've been suffering with a crappy old SUV for the last 7 years.

In 2019, they could get a $40K minivan at 1% interest for 60 months. Their monthly payment (including all taxes and fees) would be $512.81

In 2024? They need a minivan and have to keep the monthly payment under $525. The interest rates are now 8% for 60 months, even with their $10K downpayment. The max they can afford to spend is $35K to keep their payment affordable under $525K. But the new minivans with a nicer trimline are still over $40K.

What to do? Either (1) get the bare bones trimline (and likely sit on a waitlist for that since car makers are prioritizing pricer trimlines for manufacturing) or (2) let's look for a used van, with under 40K miles. Going with option (2) puts you squarely in the $34K-38K price range depending on the mileage. And that's what you can afford.

If you had another $10K in cash, you could get a brand new $45K car and afford the financing. But you can't and you're stuck paying elevated prices for a used minivan with 40K miles.

40K miles is squat! That van will probably roll another 200K easily-I would not be scared off by that.

[Anonymous]

Anonymous wrote:Don't know why anyone would buy a used car, the only cars that depreciate a lot now are the ones with really bad issues/high maintenance like Range Rovers. The cars with good reliability and cheap upkeep barely depreciate. Want a 7 year old used Toyota RAV4 with 100k+ miles? That'll be $20,000. For only 50% more you can get the same car brand new with a lot more life left in it before big repairs start coming due.

The only people who buy used cars are those who cannot afford new, it's no longer the people who have high incomes but are frugal.

This is a very affluent attitude.

For many, likely more than half the country, the $10K difference might as well be $100K because they don't have an extra $10K or can't afford to spend the extra per month on their car payment.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Don't know why anyone would buy a used car, the only cars that depreciate a lot now are the ones with really bad issues/high maintenance like Range Rovers. The cars with good reliability and cheap upkeep barely depreciate. Want a 7 year old used Toyota RAV4 with 100k+ miles? That'll be $20,000. For only 50% more you can get the same car brand new with a lot more life left in it before big repairs start coming due.

The only people who buy used cars are those who cannot afford new, it's no longer the people who have high incomes but are frugal.

This is a very affluent attitude.

For many, likely more than half the country, the $10K difference might as well be $100K because they don't have an extra $10K or can't afford to spend the extra per month on their car payment.

Yeah that was my point, it’s no longer savvy to buy a used car. It’s now only the folks with no other options, or the old people who haven’t been keeping up and doing research on the market.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Don't know why anyone would buy a used car, the only cars that depreciate a lot now are the ones with really bad issues/high maintenance like Range Rovers. The cars with good reliability and cheap upkeep barely depreciate. Want a 7 year old used Toyota RAV4 with 100k+ miles? That'll be $20,000. For only 50% more you can get the same car brand new with a lot more life left in it before big repairs start coming due.

The only people who buy used cars are those who cannot afford new, it's no longer the people who have high incomes but are frugal.

This is a very affluent attitude.

For many, likely more than half the country, the $10K difference might as well be $100K because they don't have an extra $10K or can't afford to spend the extra per month on their car payment.

Yeah that was my point, it’s no longer savvy to buy a used car. It’s now only the folks with no other options, or the old people who haven’t been keeping up and doing research on the market.

Lol, people who don't have 60k to spend on a new car can still be "savvy." In fact, they have more reason to be and have more to gain by doing so.

Buying used (with lots of research and waiting for the right car to come along) saved my family over 10k versus buying new. That 10k can immediately get plugged into 529, Roth, and CDs. That's well worth it to us. It might not be worth it to you because you might have so much money that the 10k saved by buying used simply changes the discretionary amount you spend on vacations this year, and maybe you can max out all savings and investment accounts before even getting to the car fund money. Good for you. But that doesn't make it a savvy decision. It just means you have more disposable income and therefore can say "screw it, I'll just spend an extra 10k and then I get a brand new car."

[Anonymous]

Couldn't agree more. The cars most in demand don't depreciate much.

[Anonymous]

Your math is flawed, you can’t get. Minivan for MSRP unless you’re willing to travel and wait months/years.

So don’t need a car this year or next year? You willing to fly to Midwest to get it? To get MSRP? Ok sure or does your family need a minivan this year? Cool that will be 40k-60k (koons Tyson’s)

[Anonymous]

Not all models. I am looking at used Audis and BMWs and see 5 year old mint ones with low miles selling at least half price

I am taking one’s always garaged with 25k-35k miles.

I want to get a convertible to drive to work on nice days, take to weddings, drive to beach.

[Anonymous]

Anonymous wrote:

Anonymous wrote:This is what people told us last year and we got a 2020 Subaru Outback with 18k miles and luxury finishes for 30k. New it would have been 40k. Only one owner. That's worth it to me.

You have to be willing to wait and ship to find the low mileage cars, and pounce when they come available. But they do exist.

Also, we don't have daily car commutes so our cars stay low mileage. Had our last car 13 years and only hit 70k. So we don't mind going with a slightly higher mileage used vehicle, knowing we won't be piling on miles very quickly. For me the key is reputable dealer and getting a car with a few years left on major warranties so if there are major issues you don't get screwed.

I still think used is the way to go unless dealers are offering some special incentives to buy used. Like our last car was new, but we got it with a 0% loan that allowed us to pay for it over 5 years with no interest. Since we generally pay cash for our cars, that was worth paying more for a new vehicle. But you won't see a deal like that now.

This. I’ve been looking for over a month. Literally saw a Lexus come on the market two days ago and went to the dealership the day after it was advertised. They didn’t even have pics up yet. I was the first person to drive it and it had just come out of detailing. Bought it that day. Three years old and 40k miles. Certified, no accidents and pristine condition. 30K. Fully loaded and also dealer included two years of scheduled maintenance and extended the bumper to bumper warranty. Knew it would have been at least 20k more. You just have to be patient and watch the market and pounce like PP said

What websites are you using to find these rare deals?

[Anonymous]

Anonymous wrote:

Anonymous wrote:This is what people told us last year and we got a 2020 Subaru Outback with 18k miles and luxury finishes for 30k. New it would have been 40k. Only one owner. That's worth it to me.

You have to be willing to wait and ship to find the low mileage cars, and pounce when they come available. But they do exist.

Also, we don't have daily car commutes so our cars stay low mileage. Had our last car 13 years and only hit 70k. So we don't mind going with a slightly higher mileage used vehicle, knowing we won't be piling on miles very quickly. For me the key is reputable dealer and getting a car with a few years left on major warranties so if there are major issues you don't get screwed.

I still think used is the way to go unless dealers are offering some special incentives to buy used. Like our last car was new, but we got it with a 0% loan that allowed us to pay for it over 5 years with no interest. Since we generally pay cash for our cars, that was worth paying more for a new vehicle. But you won't see a deal like that now.

This. I’ve been looking for over a month. Literally saw a Lexus come on the market two days ago and went to the dealership the day after it was advertised. They didn’t even have pics up yet. I was the first person to drive it and it had just come out of detailing. Bought it that day. Three years old and 40k miles. Certified, no accidents and pristine condition. 30K. Fully loaded and also dealer included two years of scheduled maintenance and extended the bumper to bumper warranty. Knew it would have been at least 20k more. You just have to be patient and watch the market and pounce like PP said

What dealership is this? I’ve never been able to get that good of a deal.

[Anonymous]

For people looking for deals -- you have to look at all the websites, including local dealerships. There's no "good deals here" website. You have to get very familiar with the market so that when a car in the make/model/mileage you want pops up at a good price, you know enough to know the price is good and can go see it right away (or order it if using an online dealer like Carvana).

When we bought a car last year, we narrowed it down to three different makes/models that were the right size and features for our family (we wanted a hatch back, but something on the smaller end because we live/park in a dense urban neighborhood). I put alerts on these make/models within a 5 year vintage, under 50k miles, on all the major online car dealers. I also made a list of all the reputable dealers for these brands in the DMV and would rotate through checking their websites regularly to see what they had new in stock. Sometimes dealers will put a good used car up on their website before they have it in hand, if they think it will get it sold faster. I also spoke to several dealers by phone, explaining what we were looking for and what we'd come in for, and they'd call me/text me with cars they had that they thought might interest me.

I also talked to Blue Knob in Pennsylvania, who has kind of a unique sales model, just to give them an idea of what I was looking for and asking them to put out feelers. They are well known for having good deals, the downside is you have to drive to Pennsylvania to get it and they don't do financing/haggling/bank transfers, so they want you to show up with a cashier's check. But the are reputable and we have friends who have bought great cars there, so they were part of our search.

After about 3 weeks of this I had a really good sense of the market and a car from a dealer up near Baltimore popped up in my search that was a great deal, recent vintage, low mileage popped up. Even the color I wanted. We drove up that day to look at it and took it home that night. Even happy with the trade in on the 14 yr beater we were replacing.

Oh, and we'd also looked at and test drove new cars during this time. This also helps when you go to look at used cars because you can make a true 1:1 comparison versus a new car. One reason we went with used over some of the new cars we looked at is that buying used enabled us to get the highest upgrade level and stay in budget. For a car that is goign to get daily use, some of those upgrades are really helpful and save us money in other areas.

I know not everyone wants to put this much effort in, but we only buy a new car once a decade. To me it's worth it. Not just to get a good deal (though that part is like a game to me and I love it) but to make sure we are making an informed choice and getting a car that's going to work just right for our family.

[Anonymous]

We are looking now. Used seems to make more sense: can pay cash under 20k, certified and under warranty for years still, mileage not too high and won't put much more on it with local driving...I think I'd rather do that than pay 30+K.

[Anonymous]

I am driving a much nicer car than I would be had I bought new. The one got had been a lease that got turned in at the end of the two years. It had low mileage, fully loaded, no accidents. Would have cost me 20K more if had bought it new. Have had it 5 years and it's been great. Buying pre-owned was definitely the right decision for me.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Oh, this is interesting. This is a completely new mentality than the one that was pounded into our heads our entire lives. We have always been told not to buy new cars.

Here's a good thought exercise.

A family in Maryland needs a new minivan, they have $10K for a downpayment. They want a nicer trimline, because they've been suffering with a crappy old SUV for the last 7 years.

In 2019, they could get a $40K minivan at 1% interest for 60 months. Their monthly payment (including all taxes and fees) would be $512.81

In 2024? They need a minivan and have to keep the monthly payment under $525. The interest rates are now 8% for 60 months, even with their $10K downpayment. The max they can afford to spend is $35K to keep their payment affordable under $525K. But the new minivans with a nicer trimline are still over $40K.

What to do? Either (1) get the bare bones trimline (and likely sit on a waitlist for that since car makers are prioritizing pricer trimlines for manufacturing) or (2) let's look for a used van, with under 40K miles. Going with option (2) puts you squarely in the $34K-38K price range depending on the mileage. And that's what you can afford.

If you had another $10K in cash, you could get a brand new $45K car and afford the financing. But you can't and you're stuck paying elevated prices for a used minivan with 40K miles.

FWIW, I’m shopping for a minivan right now. In the Chicago area, you can get $2800 off MSRP on a Homda Odyssey at some dealerships (maybe more, but I’ve just started looking), and Honda offers 2.9% financing for up to 48 mos and 4.9% for up to 60 mos. I can’t find any Siennas at all (and I wanted a Sienna), but the Honda prices seem decent.

[Anonymous]

The used car market is predatory. The new car market is bad enough, but I wouldn't buy a used car from a dealer (with a few exceptions, maybe Tesla or polestar).

[Anonymous]

Anonymous wrote:I am driving a much nicer car than I would be had I bought new. The one got had been a lease that got turned in at the end of the two years. It had low mileage, fully loaded, no accidents. Would have cost me 20K more if had bought it new. Have had it 5 years and it's been great. Buying pre-owned was definitely the right decision for me.

Where do you locate leases that have been turned in?