Reply to how much income or how much savings would you need before buying a $40K car?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]We are at 250k and I am never buying a new car again. DH bought a used  car at my urging this year and I can't get over how he paid 17k to essentially have the same car his sister paid 45k+ for just by getting it a few years older.[/quote]

Biut wouldn't market prices already reflect that? We looked at slightly used cars many times and they were always very expensive. As a potential buyer, I really never saw that precipitous drop in price that supposedly happens the moment you buy a new car.[/quote]

The market probably does partially account for this, but I think that there's a near-universal overvaluing of brand new things, so the price drop from brand new to one year old is larger than the decrease in intrinsic value of the object, so I think the market would behave somewhat irrationally here.

But honestly, the primary reason the "buy a slightly old car and drive it into the ground" advice works is the second half of that advice. Driving a car into the ground saves a lot of money, even accounting the increasing cost of repair. That savings is larger than the price difference between "brand new" and "slightly used."

That is to say, if your only two options were:

1. Buy a brand new car and drive it into the ground; or
2. Finance a used car and replace it after a few years,

then the more economical choice is option #1.[/quote]

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