Are really always saving money by buying used?

[Anonymous]

I always hear, "buy a three year old car, let someone else pay the early years depreciation". And I get it for cars that don't hold their value, like a Ford Fusion where you buy it for $25 and three years later it is worth $15. But what about for desirable cars, like a Subaru Legacy. If new with taxes is $27.5 and three year old used is $22.3, how am I saving money in the long run? I keep cars for about eight years because in my experience, that is when big problems start to happen (OK, I know someone has a Toyota with 900,000 miles that has never had an issue). So looking at the numbers, if I keep a $27.5 new car for eight years, it is costing $3.4/year while the used, which has about five years left is costing $4.4/year.

Therefore, how am I saving money over an eight year span going used?

[Anonymous]

I was looking at used Subarus and found the same thing. I finance my cars and the interest rate was higher for a used car so it was even less savings

[Anonymous]

Anonymous wrote:I was looking at used Subarus and found the same thing. I finance my cars and the interest rate was higher for a used car so it was even less savings

OP: I forgot to mention that the rate for used cars is a further disadvantage. I usually put down about $12K on a $27K car.

[Anonymous]

I think for this to be true you need to finance your cars and you need to hold the opinion that cars fall apart at 8 years.

We buy reliable cars and pay cash and hold on to them longer. It’s much cheaper to buy used under those conditions.

[Anonymous]

I don’t get rid of a car until it’s dead. Right now my cars are 7, 12, and 20 years old. They were all purchased used and I’ve never had a car payment. I’ve had a few major repairs - nothing over $1000 or so though. Yes, this approach is cheaper than buying new.

[Anonymous]

I think keeping the car longer will save you more in the end. We keep them till they are unreliable..last one was 17 years old. Paid 12K for it new.

[Anonymous]

I really enjoy the first five stress free years so I buy new. I bought a Subaru Tribeca in 2009 for $27k, traded it in in 2019 and then paid 29k for a Subaru Tribeca. That averaged $2,000 per year with my last car and I’m happy with that.

[Anonymous]

I have never calculated this, but I think I might. DH likes used 3 year old cars for the obvious savings, but I fell like you lose it in needing new tires/brakes/etc plus the big maintenance item comes sooner.

[Anonymous]

Depends on the brand. Brands with good resale value are always better to buy new rather than 2-3 years old. Brands with heavy depreciation may have significant savings for a 2-3 years old model. It really differs from brand to brand.

[Anonymous]

I just bought a new car and I'll never do it again. The fees and taxes were already double on the new car. Interest rate is about the same because the Honda offered it's financing on used certified Hondas. Just looked up and could've got the same 3-year old car for ca $15k but just bought new one for ca $24k. Not impressed by having new vs 3-year old and will never do it again.
I have to drive it at least 15 years to make it worth while. My needs might change in year 10.
It probably depends on the car, but will not buy new again. Not to mention how painful it was in the dealership to be nickel and dimed. I think I even cried there from anger.

[Anonymous]

As noted, the key is to buy a reliable car, maintain it well and drive it for a very long time. That applies to new cars as well as the cars that I buy, which have 100k+ miles when I get them.

[Anonymous]

I ran this same calculation when I bought my Toyota. Used was only a few thousand less than new. It just doesn’t make sense to buy some cars used if you can afford the higher payment of financing a new car.

[Anonymous]

Anonymous wrote:I just bought a new car and I'll never do it again. The fees and taxes were already double on the new car. Interest rate is about the same because the Honda offered it's financing on used certified Hondas. Just looked up and could've got the same 3-year old car for ca $15k but just bought new one for ca $24k. Not impressed by having new vs 3-year old and will never do it again.
I have to drive it at least 15 years to make it worth while. My needs might change in year 10.
It probably depends on the car, but will not buy new again. Not to mention how painful it was in the dealership to be nickel and dimed. I think I even cried there from anger.

What did you buy? I bet the difference isn't as large as you think it is. You are probably looking at the MSRP of the new car without considering what they are actually selling. There are very few cases where a 2-3 years used Honda is a better deal than a brand new one.

[Anonymous]

Anonymous wrote:I just bought a new car and I'll never do it again. The fees and taxes were already double on the new car. Interest rate is about the same because the Honda offered it's financing on used certified Hondas. Just looked up and could've got the same 3-year old car for ca $15k but just bought new one for ca $24k. Not impressed by having new vs 3-year old and will never do it again.
I have to drive it at least 15 years to make it worth while. My needs might change in year 10.
It probably depends on the car, but will not buy new again. Not to mention how painful it was in the dealership to be nickel and dimed. I think I even cried there from anger.

The problem here is not that you bought a new car but that you don't know how to research, negotiate, and buy a car in the first place. When I walk into the dealership, I know exactly what I'm going to pay because I have already agreed with the dealer via email. The dealer does not get to "nickel and dime" me, and there is no emotion or anger involved.

Empower yourself as a consumer.

[Anonymous]

Anonymous wrote:I ran this same calculation when I bought my Toyota. Used was only a few thousand less than new. It just doesn’t make sense to buy some cars used if you can afford the higher payment of financing a new car.

I agree. When I bought our last Toyota the financing on the new ones was almost free and I couldn’t find ANY benefit in buying a newer used over just a new one. I think maybe certain brands may get you ahead buying used, but certainly not Toyota or Honda.