Author Topic: New or Used Car?  (Read 741 times)

rdp123

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New or Used Car?
« on: December 16, 2016, 11:24:14 PM »
Hi all, I hope you're well and pardon if this discussion has been done to death.

I'm a news reporter, and I'm moving from New York, where I've lived blissfully car-free for 9 years. But I'm moving back to Texas, where I used to live, to do some reporting for a few years and I need a car to go get around the state. Generally speaking, I bike everywhere, but I need to do trips of between two and 8 hours across the state, one to three times a month. Additionally, this car would need to do a 3K mile round-trip to Va, where the family is, twice a year. There's some work reimbursement for mileage within the state, but I'm buying the car personally.

I've read the Mustache blog posts about cars. I get the logic of buying an used one, but I'm not entirely convinced, so I want to throw this question to the community. I want a dependable car that won't break down. I also would like dependable outlets for my devices (phone, computer) because I need them for work. That points me toward a newer car. I've read repeatedly that a car's value drops precipitously once it leaves the lot, but I'm not seeing that statement hold up when I look at the prices for used cars for dealerships (It's a little bit more generous on CL, but not very).

So here's my situation. I'm seeing Ford Fiestas, if you account for all the incentives, etc., go for around $12K. (Maybe closer to $13K if you factor in these mysterious 'dealer costs' that I've never dealt with, but I'm including taxes.) I can buy that cash. The other models I'd like and I'm looking at would be a Mazda 3, Honda Fit, hatchbacks in that vein -- but I'm seeing them for more like $10K for a 2012 model with 40K+ miles. I see the used Fiestas for $10K at the 2012 and 2013 level, which seems silly if I can get the new one for the price quoted. My question, then, is -- should I go for the new car, which I suspect would be more dependable, or try to find and older model of some other very dependable car and take my chances? And is there something I'm missing?

Many thanks to all for their input. 

Imerz

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Re: New or Used Car?
« Reply #1 on: December 17, 2016, 09:48:32 AM »
Would you have access in your new location in Texas to an Enterprise or such.  Rental cars have unlimited mileage for the rental period, and maintenance is not your concern.  Car size could be scaled to fit the needs of the trip.  As for power connectivity, for a small sum you could invest in a large power bank and solid 12v adapter to ensure that any car your in will supply you with the power needed.

Otherwise, the Fiesta is a solid entry level vehicle, and 12K is not a terrible purchase price.  I would urge you to run the numbers on taking an offer loan at 0 or 1% and the additional insurance cost (full coverage) vs the opportunity cost of that 10K in an investment account.  Paying cash is a solid option of course, but if you're savvy enough to ask this question and have the cash, you're likely savvy to trust the math if the equation favors the other side.

trashmanz

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Re: New or Used Car?
« Reply #2 on: December 17, 2016, 09:58:34 AM »
I think you get best bang for the buck on higher end models and those with a lot of options on them. But if you are just looking for cheap basic transport then going base model new for a good price is not unreasonable.

MayDay

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Re: New or Used Car?
« Reply #3 on: December 17, 2016, 11:54:01 AM »
I don't know anything about the reliability of a fiesta. My first suggestion is to check consumer reports and Ford car forums to get that info.

That said, as long as it's a solid car, it's often a better deal to buy new than to buy a 1-3 year old car.

We haven't pulled the trigger (both our older cars are still chugging along) but when we do there is a decent chance we'll buy new. The last time we looked at ~2 year old basic Honda/Toyota vehicles, buying used made no sense until you got to ~80k miles.
Journal:  http://forum.mrmoneymustache.com/journals/mayday's-journal/350/  featuring children, chickens (new!) and other ch words.

ender

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Re: New or Used Car?
« Reply #4 on: December 17, 2016, 02:19:48 PM »
We recently bought a new car because the price/mile of the car itself was cheaper to buy new.

How do you determine this? Set a mileage (say 200k) that you would consider the car "worthless" at, whether because you'll likely sell it, the car actually is worthless, or just because you don't want to drive it past this point, and take the cost / (200k - current milage) and check.

When we ran the numbers even at 200k miles the new car was about 1 cent/mile cheaper than the used ones.

This varies based on car however.

StartingEarly

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Re: New or Used Car?
« Reply #5 on: December 17, 2016, 02:45:42 PM »
Well, reliability wise there's a little Honda Insight with a manual that has 750k+ miles on it on the forum. I think the battery was changed at 560k but they normally go a lot sooner than that. Do you know how to work on cars at all or are you a take it to the dealer kind of person?