Author Topic: Car buying decision  (Read 1874 times)

Rust

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Car buying decision
« on: September 19, 2016, 11:50:30 AM »
I've got a problem, I drive too much. Round trip 50 miles a day to work. I work from home two days a week most of the time so I drive on average 150 - 200 miles a week. I currently have a 2006 Nissan Altima that gets about 28 mpg on the highway and takes a quart of oil every fill up. (I'm burning oil from the piston rings yeah so worst case of where to be losing it from) I can get $700 for the car right now from CarMax and sell it with a clean conscious. (I wouldn't feel right passing this off to another end user)

Here are my options:

1) Take the $700 now buy a new to me car.
2) Spend an extra $4 each fill up and see how long it lasts (and also get an aftermarket engine oil treatment that claims to seal the leaky valves)

Either way I'm going to be in the market for a new to me car. When selecting a used car does anyone know what the ratio of price to mileage I should be looking for. Three examples for demonstration purposes (not that I love a Veloster just one of the many cars I'd consider):

1) 2015 Hyundai Veloster, 4k Miles, $17,000
2) 2013 Hyundai Veloster, 19k Miles, $14,600
3) 2013 Hyundai Veloster, 38k Miles, $13,000

Using option 2 and 3 It's $1,300 for 19K miles which is close to two years worth of driving or using option 1 vs. option 3 it's 34k miles for $4k in price or three years worth of driving. How have others made a decision on price to mileage, is there a ratio I should look for?

ShoulderThingThatGoesUp

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Re: Car buying decision
« Reply #1 on: September 19, 2016, 11:54:26 AM »
Veloster's safety ratings aren't good. Is it just you using it? Is there another family car?

Rust

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Re: Car buying decision
« Reply #2 on: September 19, 2016, 12:26:40 PM »
Quote
Veloster's safety ratings aren't good. Is it just you using it? Is there another family car?

I just selected that as an example to get at the real question which is about the ratio of miles to price. I don't want to get hung up on the specific car but it's going to be the car that I take to and from work and occasionally, I'd pick the kids up in it if I needed to.

DavidDoes

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Re: Car buying decision
« Reply #3 on: September 19, 2016, 12:50:56 PM »
Honestly, the few bucks more a month for a two year newer vehicle with less miles than it takes to break in an engine, is completely worth it.

There's no magic formula for figuring out if the asking price is fair. Best bet is to see and drive all your options. First, limit your options by being picky. Think the one with most miles are asking too much and don't think they'll budge? Nix that one.

I would personally and did so in the past forego the vehicle altogether and take transit or transit + bicycle.

Rust

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Re: Car buying decision
« Reply #4 on: September 19, 2016, 01:15:04 PM »
Quote
I would personally and did so in the past forego the vehicle altogether and take transit or transit + bicycle.

I wish this was an option but it is not. To bike to my work from my house would be an 18 mile bike ride on very unfriendly roads for bikes and there is no public transportation.

I do disagree about there not being a formula. I'm certain one exists If someone doesn't have one, I'll develop one myself.

RWD

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Re: Car buying decision
« Reply #5 on: September 20, 2016, 11:23:09 AM »
Quote
I would personally and did so in the past forego the vehicle altogether and take transit or transit + bicycle.

I wish this was an option but it is not. To bike to my work from my house would be an 18 mile bike ride on very unfriendly roads for bikes and there is no public transportation.

I do disagree about there not being a formula. I'm certain one exists If someone doesn't have one, I'll develop one myself.

Can you move closer to work?

Do you think you can do a better job coming up with a formula than KBB?

Edge of Reason

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Re: Car buying decision
« Reply #6 on: September 20, 2016, 05:22:19 PM »
Not sure if this helps (see below) but I'm following this thread to see if there is indeed a ratio (and will modify our formulas accordingly).  We put together a really simple spreadsheet in excel using the following assumptions as we haven't found anything concrete...

Mr. Edge figures/estimates that depreciation is 50% mileage and 50% age.  We used our current vehicle (a 2006 Corolla that has been on the road for 11 years) to figure out how many miles (kms for us) we put on each year.  Ours has almost 280 000 kms on it so to keep things simple he figured we do 25000 kms per year (250 000 in 10 years which is used in an assumption below).   He put together a quick spreadsheet with the following columns:

Column X : the age in years of the car we are considering
Column Y : the mileage of the vehicle that is being considered
We assumed we could pessimistically keep the next vehicle until it is 10 years old...any additional years would be a (welcome) bonus.

Column Z = 0.5*(1-X)+5*(250000-Y)/250000) 
Use your own mileage instead of our 250000 and the 5 is 1/2 of 10 years...again use half of how long you'd like for the vehicle's age when you'd get rid of it.

So you end up with Z = life remaining in years for you on the new to you vehicle

This Z is used in another formula to calculate W which is the yearly cost to you 

W = The cost of the vehicle you're looking at / Z   

Put that formula in another column and you end up with Your Yearly Cost of the vehicle being considered.  BTW..this cost does not include maintenance as that is hard to come up with......hopefully we don't end up with a lemon.  We assumed maintenance would be the same regardless of if you owned it or someone else as it would have to be paid either by someone else before you got the vehicle (an older vehicle) or by you on a younger vehicle.

I just copy and paste a new row for every vehicle I see that looks somewhat promising and highlight the best option to date (you can get all fancy here and use conditional formatting if you want ;) )

I also keep a tab in the spreadsheet for the cost of gas for each different type of car we're looking at.  I got those values from the feds (google gas mileage comparison and use your Fed's numbers).  On this tab I store how much we would spend on gas yearly for the car we're considering (our yearly mileage times the fuel consumption per km (or mile if you're in the US) for that car).  That can then be "added" into value W on the previous spreadsheet so I can compare apples (Civics) to Oranges (Corollas).. 

Another variable would be tires if you are looking at two different vehicles in two different classes...some need pricier tires.  Didn't factor that in for now.

Phew...hope I haven't lost you and let me know if that all makes sense.  Good luck on your hunt and I'll be following this thread to see if anyone has seen any concrete ratios to use. 
« Last Edit: September 20, 2016, 06:33:31 PM by Edge of Reason »

Rust

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Re: Car buying decision
« Reply #7 on: September 22, 2016, 01:48:03 PM »
Quote
I would personally and did so in the past forego the vehicle altogether and take transit or transit + bicycle.

I wish this was an option but it is not. To bike to my work from my house would be an 18 mile bike ride on very unfriendly roads for bikes and there is no public transportation.

I do disagree about there not being a formula. I'm certain one exists If someone doesn't have one, I'll develop one myself.

Can you move closer to work?

Do you think you can do a better job coming up with a formula than KBB?

I could move closer to work. Closer to work would move me into a much higher cost of housing and taxes. I'd have to start doing other break even calculations. Being that I work from home 2 sometimes 3 days a week, it's not all that bad. The whole conversation of moving close to work really is off-topic for what I'm trying to figure out in this post though.

KBB,doesn't use a formula. From their FAQ page "We do not believe in using arbitrary formulas to predict prices because our promise is to report dependable values, not set prices."
http://www.kbb.com/company/faq/used-cars/