…is buying a car. Happy day.
Over at The Savvy Scott, Pauline describes her recent purchase of a Hyundai Tucson with 140,000 miles (!) on it. Pauline, the proprietor of Reach Financial Independence, evidently lives in Guatemala and decided to buy a car through an auction house in Orlando while vacationing in Florida, the costs being significantly lower and the chance of getting a decent car significantly higher when one buys in the US.
LOL! To say you’re less likely to get ripped off in Florida is to say something startling about Guatemala, eh? 😀
Later models of the Tucson are indeed very nice — it’s among those I’ve been considering — and Pauline is very pleased with her find. And she got a good price on it by purchasing at auction.
I’ve never bought a second-hand car from a dealer. My ex- and I got our Mercedes second-hand, but we bought it from one of his law partners. We knew where the guy lived. 😉 The prospect of coping with a used car salesman makes me shudder, and I can’t even imagine the risks entailed in buying at auction.
But given the outrageous cost of new cars, and the fact that they’re mostly equipped with so much unnecessary electronic frou-frou that you have to go back to school to learn now to drive one, I’m considering the possibility of a used car. One of my friends knows a car broker. If I can get him to give me a referral to that gent (and I don’t hate the gent), I’ll probably see if he can get me a late-model Toyota that comes with a six-banger.
Pauline points out all the perceived joys of buying second-hand: lower cost, less depreciation, lower insurance costs. In Arizona, we can add lower registration taxes, since these drop as a car ages. I can pay registration out of cash flow now; I’d have to draw down from savings to register a newer vehicle.
On the other hand…
If you drive your car until it falls apart, it will run for ten to twenty years (depending on how much you drive and how well you care for the vehicle). An old junker will have to be replaced in less than ten years — possibly less then five.
If you drive a car for ten years, you have ample time to set aside “car payments” in savings, accumulating enough to pay for the next car in cash.
If you buy new and keep the car for ten to fifteen years, depreciation is irrelevant. A reliable vehicle, such as a Toyota or a Honda, will give you your money’s worth over that period.
Over a fifteen-year lifetime, the cost of insurance and registration will drop into the sub-basement, whereas if you buy a five-year-old car every five years, these costs will never decrease significantly.
New cars tend to be safer, because they have up-to-date safety technology and because key components like brakes will not fail from age.
New cars come with warrantees, usually for 100,000 miles. Junkers do not — they’re pretty much guaranteed to cost you money for repairs.
A Hyundai that has 140,000 miles on the odometer may run for another 60,000 miles, give or take. That’s not very far. It certainly isn’t if you live in the US. Possibly it would be a good buy if you lived someplace that had decent public transit and amenities such as grocery stores within walking distance. But that certainly is not true in most US cities. Here, such a vehicle would be penny-wise and pound-foolish.
While I surely do resent having to pay more for a new car than my first house cost, I’m also uncomfortable with the downsides of buying a used vehicle.
I dunno. Maybe I’ll just get the Dog Chariot’s brakes fixed and try to coax it to run to 200,000 miles.
My parents bought my very first car at an auction and it was a huge money suck. Constantly breaking down and needing expensive repairs.
I’ve had similar luck purchasing from a private person. I had a cute convertible for a whole six months that left me thousands in debt because of all the repairs. It just kept breaking down.
I’ve never bought a brand new car. But in my experience for purchasing a used car, it’s better to go to a dealership. My father-in-law is a car salesman so we always get good deals. I’ve only bought 1 used car from a dealership before I started buying through my father-in-law but that one car lasted me a few years until I bought the horrid convertible. But during that time I had very little mechanical issues with it and it was one of the most reliable cars I had owned at that time.
I’ve never heard of purchasing through a car broker.
Suspicions confirmed!
If you can find a broker, it’s some kind of heaven. You never even have to SPEAK to a car salesman. They usually get you the fleet price. Both times my guy located and negotiated purchase of cars for me, he got what I would call a fair price but not a smokin’ deal. I certainly paid less than I would have if I’d walked into a showroom and been assaulted by a salesman.
Brokers, however, have largely been supplanted by websites like carguru.com and by those car-buying services you can get through places like Costco, your credit union, and even sometimes through your employer.
I had good luck with truecar.com – I know they work with dealers, so they aren’t going to get you a killer deal – but it was nice to have a number settled before even stepping foot into the dealership to start negotiating.
@ Spiffi: Interesting! TrueCar.com does show prices $1,000 to $1500 less than the MSRP, but to find out who’s offering them, you have to divulge your name and phone number. I’m just not gonna do that.
However, I have printed a PDF of the figures that came up and will try to use that information to negotiate a better price. Thanks!
heh, yeah I gave ’em a fake name and a junk email address to start with – and I had a couple dealers ping my email once with sort of a “hi what are you looking for” email.
But once I had nailed down exactly which make, model and color I wanted, I did give truecar my name and a valid email – and had 3 dealerships ping me. Of those three, only one had the exact vehicle I wanted – and I ended up a with a “certificate” printed out from truecar that matched the VIN# of the vehicle I was going in to test drive and buy.
I will say that when you go this way, you work with the “internet sales” person – who is someone who basically has people coming to him/her – as opposed to the hungry sales people lurking about in the corners of the parking lot. I can’t say whether that’s better or worse? I did find that out of all the sales people I dealt with looking at cars and doing test drives, the vast majority of them were clueless idiots who didn’t know a thing about the vehicle they were trying to sell me.
I did wish I could have bought a car from Barbie (her real name) the sales lady at the Ford dealership. She was Awesome. Sadly, I didn’t like the Escape enough to buy her car.
I feel the opposite of the above poster. I would only buy a used car through a private party. I don’t want to haggle with a used car salesman to get the price down to where it should be. And I certainly don’t believe you are guaranteed a better or safer car from a dealer. There are lemons everywhere.
My husband’s ’99 Ford Ranger has 400,000 mile on it. It’s really time to make a move, but it is so danged much trouble.
The depreciation argument drives me batshit. It is only relevant if you want it to be. And for us it is not.
That said, we still can’t quite make the finances work for a brand new car. Perhaps next time around.
I really think the significance of the depreciation issue depends on how long you’re willing to keep the vehicle. If you’re going to hang onto the thing until it falls apart like the minister’s one-hoss shay, then you’ll get your money’s worth and so the depreciation is probably irrelevant.
About trying to do the finances, I figure that if I can afford $nnn/month for payments, then hey! after the car is paid off I can STILL afford that. So let’s say I pay off the loan in five years (as a practical matter, I paid the last one off in about two years by throwing every windfall at it). Then I keep paying the equivalent of the monthly bill into a savings account for another five years (meanwhile, with any luck, getting an occasional raise, making the “car payment” more affordable). At that point I’ve self-escrowed enough to pay for the next ride in cash.
However…this requires me to assume I’ll keep the vehicle for at least ten years. Some folks would rather have a new(er) car sooner than that.
My father is a mechanic, so we always drove crappy old cars growing up – which was fine. But now I live far away from him, and I want a reliable car.
I was driving my old Pontiac this past year – and it had gotten to the point where I was uncomfortable thinking about driving anywhere other than back and forth to work – I bought some time by signing up for AAA – but ultimately I needed to replace the car with something newer.
As it turned out, the vehicle I wanted, only came into being in 2014 – so if I wanted a used vehicle I would have had to wait another year or so, for the first few lease returns to start coming in. About a month before I bought my 2015, Avis started having some early model 2014’s on their website for sale – but for a previously-owned rental fleet vehicle, with 14k miles on it, they were only knocking off about $4k from what I ended up paying for my new vehicle.
And I was able to get the exact model and colour I wanted – with the specific options I desired. And zero percent financing.
I wouldn’t buy a new car every few years – I like not having car payments – but this car should last me 10-15 years now.
Our first Camry was used, bought from a retired dentist with immaculate white shoes. After more research, we realized that desirable cars–Camry, Accord, etc–don’t depreciate that much. So our next Camry was new (deceased at 16 thanks to a speeder who was driving sans license/license plate), Civic ditto (currently at 12) and a new Accord (bargained by Mr FS to 22,000. )
The new Accord costs less to insure than the Civic, owing to safety features. I think the warranties on new cars–plus their longevity–give one a lot of peace of mind as one ages.
Ah, my Camry was SUCH a wonderful car!!! I gave it to my son after he went to SF, when I needed a bigger vehicle to accommodate the large dogs. It ran and ran until some teenaged kid driving around in the middle of the night crashed into it where he’d parked it on the street. Totaled it.
I’m sure the Camry is still a great car, but after all these years driving a Sienna, I feel cramped inside the driver’s compartment. And I felt the same after test-driving the overall delightful Venza.
Interestingly, my insurance broker said the cost of insuring a new car wouldn’t be much higher than what I’m paying now, partly because I haven’t tried to kill any of my fellow homicidal drivers lately and partly, no doubt, for the reason you cite.
Tis a slippery slope. Buy new for the piece of mind (hopefully)or buy used and hope it doesn’t take you to the poor house. Just this past Summer I had to shop for a used car for DD2 to replace the one that broke in half….another story…..I shopped around and wound up buying a car on craigslist from a private party. Wasn’t without it’s challenges ….I’m amazed at the number of cars on the market with 100K and 200K miles along with crazy prices. It may just pay you to shop a bit and buy one new…All you have been thru of late…you deserve it!
Man! I think I’d rather buy from a dealer who’ll give you a so-called “certified” warranty than from some guy off Craig’s List. That’s just too scary — to my mind it’s worth a few extra dollars to know who you’re dealing with and to at least have them give you a piece of paper that says they’ll take care of major problems for XX thousand miles.
LOL! Back in the pre-Craig’s List era, I had a boyfriend who sold a (very functional, wonderful) 1956 Ford through the paper’s classified ads. I remember his taking black paint and spraying the engine with it, by way of making it look “clean.” Snark!
It worked, though. Somebody bought the thing right away.