When you can afford it, is it still Mustachian to buy a Brand New Car?

[researcher1]

Go read the main blog and do some of your own research into how consumerism is playing a huge role in climate change. I learned something about used car trends today, but I don't think you are genuinely open to learning anything that contradicts your currently held view from another forum member.

My point is that your perception of an "SUV" is antiquated and no longer relevant.
SUVs from a decade ago were mostly big, overweight body-on-frame gas hogs.
But that is no longer the case.

Your original point was NOT about consumerism in general.  It was a specific attack on a specific type of automobile...
"buying a brand new status-signalling SUV is one of the shittiest things you can do for the planet."

I'm just saying that viewpoint is largely outdated and irrelevant.
How is buying a Toyota Rav4 hybrid any worse than buying a Toyota Camry?

[GuitarStv]

How is buying a Toyota Rav4 hybrid any worse than buying a Toyota Camry?

A quick internet search tells me that the SUV body shape is a little more than a fifth less fuel efficient.

2020 Toyota Camry Hybrid - 51/53  city/hwy
2020 Toyota RAV4 Hybrid - 41/38  city/hwy

[ThriftyMiss]

Thanks for all your replies (except markbike528CBX - what you said about my dear 93 year old Dad who hasn't left the four walls of his carehome since March 18 was appalling, and really hurtful.)

So...even though dear friends were encouraging me to "treat myself" - I guess ya can't teach a Thrifty old dog new tricks!   I am thrilled to announce my brand new car!  A 2018 Toyota Corolla, 35,000 K's, with sunroof & cruise control!! (two things I never had with my 2008 Yaris, that I bought in 2009) as well as bluetooth technology, back-up camera, heated seats, etc...!  And I still have $16,000 for travel, whenever the world opens up again!

Thanks again and all the best to everyone (except markbike528CBX, of course.)
ThriftyMiss

[Taran Wanderer]

Excellent choice!

[markbike528CBX]

I apologize for my attempt at humor.

You did the right thing with your purchase.

[Metalcat]

The newer Corollas are quite nice.

I'm envious of your sunroof.

[bluebelle]

buying a new car is not 'mustachian' but you don't need to live your life by someone else's rules.   I think the value of this forum is 'take what resonates with you, ignore the rest'.

I buy new cars (1991, 2003, 2020), but I buy last year's model when the dealerships are motivated to get rid of them.   Is it the smartest thing to do with my money, no.....but......I don't do it very often, I get exactly what I want, and I drive for a very long time.    I don't get a 'thrill' out of a new car, cars are someone utilitarian to me and that first door ding from some careless jerk pisses me off (buy hey, extra steps from the farthest corner of every parking lot now)

I am not a good negotiator, I find that stressful.   Someone on this forum suggested unhaggle.com to me, and I used it for my recent car purchase.

The point of having money is to live your life on your terms, not MMMs, not mine....the goal in life is to not be the richest person in the cemetery.   

[GuitarStv]

buying a new car is not 'mustachian' but you don't need to live your life by someone else's rules.   I think the value of this forum is 'take what resonates with you, ignore the rest'.

I buy new cars (1191, 2003, 2020), but I buy last year's model when the dealerships are motivated to get rid of them.   Is it the smartest thing to do with my money, no.....but......I don't do it very often, I get exactly what I want, and I drive for a very long time.    I don't get a 'thrill' out of a new car, cars are someone utilitarian to me and that first door ding from some careless jerk pisses me off (buy hey, extra steps from the farthest corner of every parking lot now)

I am not a good negotiator, I find that stressful.   Someone on this forum suggested unhaggle.com to me, and I used it for my recent car purchase.

The point of having money is to live your life on your terms, not MMMs, not mine....the goal in life is to not be the richest person in the cemetery.

I assume the 1191 vehicle required rather extensive work?


MOD NOTE: This was reported as mocking the poster for a typo. I assumed it was a joke, and laughed just picturing a wagon like in Monty Python's Search for the Holy Grail or something. Hopefully we can all approach things from a spirit of good faith. Cheers!

[charis]

A lot of the rising price of used cars is due to the rising price of new cars, which have become more complex and more loaded with features. The percentage of cars with leather interiors, power mirrors, aluminum rims, and other luxury items has increased, while the number of cars you can still buy with crank windows or bench seats have decreased. Then there is the now-ubiquitous infotainment and networking equipment that has replaced the old AM/FM CD player. An economist would call this rising quality, while I would call it lifestyle creep on a nationwide scale.

The shift in demand towards luxury pickups/SUVs and away from basic economy cars would, in itself, raise the average when these vehicles are resold. That is, a luxury truck/SUV that cost $60k new will cost the next person $30k in a few years when it's lost half it's value. A stripped-down Nissan Versa that was $16k new will cost $8k in the same timeframe. Hybrid drivetrains, while a good thing that adds utility to a vehicle, also contribute to higher average used car prices.

All this is an effect of rising income inequality, or if you prefer the hollowing out of the middle class. If the demographic profile of people who can afford to buy new cars shifts away from the lower-to-mid middle class, and toward the upper middle class and upper  class, then the rest of us will have to eventually inherit used cars originally bought by people whose income is much higher than ours, rather than perhaps slightly larger than us.

Similarly, the car manufacturers will have to respond to the demand for luxury by making more luxury cars and fewer basic cars. Taken to extremes, most cars on the market in a world of have and have-nots be loaded with features, oversized, and with a cost of ownership (i.e. energy, insurance, taxes, depreciation, and maintenance) unaffordable to blue-collar families. Imagine if your only automotive choice within your budget was 20-year old Mercedes Benzes. You'd have to buy worn-out luxury instead of reliability, efficiency, or durability.

The opponent process to this escalating trend of car fanciness is that when there is a surplus of supply for 3-10 year old luxury vehicles that exceeds demand, then such vehicles would have to sell for lower prices. Thus, the upper middle class buyers of such things would get hit with bigger depreciation losses as they try to sell their used vehicles to financially stretched lower middle class buyers. This is why a Civic depreciates much less than a Range Rover. Five-digit depreciation losses discourage people from buying the loaded Cadillac Escalade in the first place, and encourages them to either buy used themselves or reduce their levels of luxury, e.g. the new Rav4 with cloth seats instead of the new Escalade.

The current imbalance between what the wealthy can afford to buy new and what the working classes can afford to buy used is also apparent in housing. More large houses than small houses are being built because only higher-income people are buying new homes. Thus, the young family with a working-class income who could live an efficient lifestyle in a 1k square foot house does not have the choice to buy that in many cities with tracts full of McMansions and 3-car merchandise storage units. So the young family stretches to buy a house twice as big as they need, and pick up two too-large used luxury vehicles because that's all that is for sale.

In this way, income inequality perpetuates itself. The family described above will be in a permanent state of financial struggle due to being house-poor and car-poor. And yet they can look around and see their lifestyle is completely normal.

Lots of good points made in this post.  My observations from this forum is that plenty of mustachians are not overly concerned about income inequality, particularly the educational inequality side of things (many posts reference "good schools" without noticing that this very accepted practice of hoarding resources does so on the backs of less fortunate citizens).

[ender]

A lot of the rising price of used cars is due to the rising price of new cars,

Citation needed?

It's certainly the case that some new cars are increasing in price (though this doesn't fit with historical data on inflation adjusted car prices, I'll grant you can spend more - inflation adjusted - in 2020) but the value you get for economy new cars in 2020 is astronomical compared to that of 20/30/40/50 years ago.

And even though prices of cars aren't massively increasing the value you get from the vehicles is considerably higher.

There's tons of articles easily findable talking about the inflation adjusted price of cars not rising which refute this underlying premise.

And this is all ignoring the fact that buying a car in 1970 and expecting it to go 100k miles basically no matter what would have been insane. Cars have not only been constant or decreased in inflation adjusted cost but the quality of those vehicles has gone up astronomically.

In fact, it's so much less what your whole argument is about and more that the quality is high. If a car usable lifespan goes from 50k to 150k miles... the depreciation curve is basically 1/3 as much.

So naturally as vehicles last longer, they depreciate less, meaning value is lost more slowly. Why would a car that lasts so much longer depreciate as quickly? It doesn't.

If you figure a new car at $25k in 2020 dollars has a lifespan that goes from 100k miles to 200k miles and depreciation reflects this, after 100k miles - how much will the first car be worth? Basically $0. But the second car might be worth $10k or something because it's only 1/2 used up.

You can pretty easily see this, just pick a fairly common vehicle and put in new prices and then find used ones over time. Plot them vs each other - you will see that the trend has the "$0 point" way past what it would have been historically. We bought new last time since you had to drive 200k miles before the new car depreciation curve was steeper than equivalent 3-4 year used vehicles.

tldr: This assumption here is just not true.

[researcher1]

I am thrilled to announce my brand new car!  A 2018 Toyota Corolla, 35,000 K's,

Congratulations.

Did you happen to research what the negotiated price of a brand new Corolla with 0 miles would have been?

I'm seeing discounts of $4000+ off MSRP, including manufacturer rebates of up to $2000.

[StashingAway]

I am thrilled to announce my brand new car!  A 2018 Toyota Corolla, 35,000 K's,

Did you happen to research what the negotiated price of a brand new Corolla with 0 miles would have been?

Dude...

[SunnyDays]

Great choice - it will last you the rest of your driving life.

[bluebelle]

buying a new car is not 'mustachian' but you don't need to live your life by someone else's rules.   I think the value of this forum is 'take what resonates with you, ignore the rest'.

I buy new cars (1191, 2003, 2020), but I buy last year's model when the dealerships are motivated to get rid of them.   Is it the smartest thing to do with my money, no.....but......I don't do it very often, I get exactly what I want, and I drive for a very long time.    I don't get a 'thrill' out of a new car, cars are someone utilitarian to me and that first door ding from some careless jerk pisses me off (buy hey, extra steps from the farthest corner of every parking lot now)

I am not a good negotiator, I find that stressful.   Someone on this forum suggested unhaggle.com to me, and I used it for my recent car purchase.

The point of having money is to live your life on your terms, not MMMs, not mine....the goal in life is to not be the richest person in the cemetery.

I assume the 1191 vehicle required rather extensive work?


MOD NOTE: This was reported as mocking the poster for a typo. I assumed it was a joke, and laughed just picturing a wagon like in Monty Python's Search for the Holy Grail or something. Hopefully we can all approach things from a spirit of good faith. Cheers!

FWIW - I took it as a good hearted poke at a mis-type.   Thank you to whomever thought I needed protecting, but my skin is much thicker than that.

[GuitarStv]

buying a new car is not 'mustachian' but you don't need to live your life by someone else's rules.   I think the value of this forum is 'take what resonates with you, ignore the rest'.

I buy new cars (1191, 2003, 2020), but I buy last year's model when the dealerships are motivated to get rid of them.   Is it the smartest thing to do with my money, no.....but......I don't do it very often, I get exactly what I want, and I drive for a very long time.    I don't get a 'thrill' out of a new car, cars are someone utilitarian to me and that first door ding from some careless jerk pisses me off (buy hey, extra steps from the farthest corner of every parking lot now)

I am not a good negotiator, I find that stressful.   Someone on this forum suggested unhaggle.com to me, and I used it for my recent car purchase.

The point of having money is to live your life on your terms, not MMMs, not mine....the goal in life is to not be the richest person in the cemetery.

I assume the 1191 vehicle required rather extensive work?


MOD NOTE: This was reported as mocking the poster for a typo. I assumed it was a joke, and laughed just picturing a wagon like in Monty Python's Search for the Holy Grail or something. Hopefully we can all approach things from a spirit of good faith. Cheers!

FWIW - I took it as a good hearted poke at a mis-type.   Thank you to whomever thought I needed protecting, but my skin is much thicker than that.

It was indeed intended as an attempt at humour, not an insult.

I'd be terrified of insulting someone for a typo . . . they're a way of lfie for me.

 :P

[bluebelle]

buying a new car is not 'mustachian' but you don't need to live your life by someone else's rules.   I think the value of this forum is 'take what resonates with you, ignore the rest'.

I buy new cars (1191, 2003, 2020), but I buy last year's model when the dealerships are motivated to get rid of them.   Is it the smartest thing to do with my money, no.....but......I don't do it very often, I get exactly what I want, and I drive for a very long time.    I don't get a 'thrill' out of a new car, cars are someone utilitarian to me and that first door ding from some careless jerk pisses me off (buy hey, extra steps from the farthest corner of every parking lot now)

I am not a good negotiator, I find that stressful.   Someone on this forum suggested unhaggle.com to me, and I used it for my recent car purchase.

The point of having money is to live your life on your terms, not MMMs, not mine....the goal in life is to not be the richest person in the cemetery.

I assume the 1191 vehicle required rather extensive work?


MOD NOTE: This was reported as mocking the poster for a typo. I assumed it was a joke, and laughed just picturing a wagon like in Monty Python's Search for the Holy Grail or something. Hopefully we can all approach things from a spirit of good faith. Cheers!

FWIW - I took it as a good hearted poke at a mis-type.   Thank you to whomever thought I needed protecting, but my skin is much thicker than that.

It was indeed intended as an attempt at humour, not an insult.

I'd be terrified of insulting someone for a typo . . . they're a way of lfie for me.

 :P

I see what you did there........... :-)

and thank you for spelling humour correctly.

[MilesTeg]

I'm a 59 yr old Canadian female, and although I only made about $40,000 a year, I am now set for life.  $500,000 in RRSP, $100,000 in TFSA, and $150,000 in non-registered.  I've always owned second hand cars...and I'm thinking it's time to treat myself!  I'm excitedly looking at spending $32,000 cash for brand new SUV, which still doesn't touch the investments listed.  Thoughts?  (...and I love my parttime job, so I still have $$ coming in...)

Simply put,, there is nothing wrong with buying a new car, or anything, if it doesn't affect your financial goals.

As you already mentioned, you can't take the money with you. You might as well enjoy it IF you are happy with your financial position and life circumstances.

The only problem happens when you start compromising your financial goals with unnecessary expenses.

[GuitarStv]

I would say, Spoil yourself with an exotic second-hand car hahaha..

She got a second hand Toyota.  Can't get more exotic than a Japanese car!



:P

[TheGadfly]

To the OP's question, purchasing a new car could be Mustachian if the factors that contribute to that decision are grounded in objective considerations about your actual (not perceived) needs, available alternatives, ongoing costs, opportunity costs, depreciation, etc. If you weigh those quantifiable factors against the non-quantifiable factors related to the happiness, peace of mind or gratification you get from the new car, you've done a Mustachian calculus.

If the factors that contribute to your decision are limited to the thrill you get from the idea of driving around in a shiny new car with the latest tech, that's not Mustachian.

In your particular situation, just because you're paying cash doesn't make it a "bad" or "good" decision financially. Consider the opportunity cost of not investing all or a portion of that $32k, look at less expensive alternatives, add up the extra cost of insurance, think about how long you'll own the car, and understand the depreciation on your purchase (caredge.com). You may still end up buying the SUV, and that's fine. As long as you quantify the stuff you can quantify and weigh your options rationally, you'll make an informed decision.

[tawyer]

How is buying a Toyota Rav4 hybrid any worse than buying a Toyota Camry?

A quick internet search tells me that the SUV body shape is a little more than a fifth less fuel efficient.

2020 Toyota Camry Hybrid - 51/53  city/hwy
2020 Toyota RAV4 Hybrid - 41/38  city/hwy

Additionally, because of physics, 4WD and AWD can never be as efficient as 2WD on the same vehicle.

[K_in_the_kitchen]

I'm just going to say it -- I prefer new cars.  We've bought the gently used cars several times in the past, but our most recent car was bought new.  It's a compact car (Mazda3 hatchback).  I wanted new safety features and we got a great deal because it was the last year of the model. KBB still shows the lowest range of private party value at more than we paid 21 months ago.  It's also our only vehicle for 4 adults, so dependability is important as we don't have a backup.  Mustachian?  Who gets to decide?  Does someone who commutes to and from work everyday in a car get to call themself Mustachian?  We haven't driven to a job since 1996.

I know it isn't logical, but I don't care.  I know we don't drive enough miles for a new car to make sense -- still don't care.  And no, the thrill of the car hasn't worn off.  Every time I drive the car I love it.  I love it more than the gently used Mercedes I drove before this.

[StashingAway]

... and we got a great deal because ...

everyone who buys a new car says this. Or at least the majority of them do. I am genuinely curious why I hear it so often.

[ChpBstrd]

... and we got a great deal because ...

everyone who buys a new car says this. Or at least the majority of them do. I am genuinely curious why I hear it so often.

When a person walks onto a new car lot, they want to buy a new car. If the salesperson can get them to agree they are getting a great deal (e.g. because they let the person negotiate below some anchor like MSRP, or because they waived some fees they added on) then the person will buy the car because they think it's a great deal. Thus, almost all who leave with a new car will believe they got a great deal.  Those who did not leave with a new car will believe the deal was not great enough.

[K_in_the_kitchen]

... and we got a great deal because ...

everyone who buys a new car says this. Or at least the majority of them do. I am genuinely curious why I hear it so often.

When a person walks onto a new car lot, they want to buy a new car. If the salesperson can get them to agree they are getting a great deal (e.g. because they let the person negotiate below some anchor like MSRP, or because they waived some fees they added on) then the person will buy the car because they think it's a great deal. Thus, almost all who leave with a new car will believe they got a great deal.  Those who did not leave with a new car will believe the deal was not great enough.

Well, let's see.  In early 2019 we bought a 2018 Mazda3 Grand Touring hatchback for $17,600 (MSRP was $24,995 + destination fees, although I agree MSRP means nothing since there are various dealer incentives and holdbacks).  We've put a little over 8K miles on the car since we bought it.  Current KBB private party range is $18463 - $20488, and that was choosing "very good" condition and not "excellent", although the car is like new.  Registration and insurance on the Mazda are lower than what we were paying on the 9 year old Mercedes, and we also sold a small pickup, making the Mazda our only car.  Overall our car expenses are much, much lower than they were.  We jokingly refer to the Mazda3 as "our truck" because we can haul so much in it.  And in nearly 2 years we've needed to rent a Uhaul exactly once.

We didn't walk onto a car lot until we had decided on a car, used TrueCar, called multiple dealers, and negotiated a price.  The only thing they got us on was quoting a sales price without mentioning it required we finance with their low interest rate finance deal (I think it was 1.9%).  It wasn't a big deal though; we put down the maximum we could and paid off the loan the day we received our first statement -- they got us for about $13 in interest.

I've been alive long enough to know they play games at dealerships, including cutting prices in one place and adding fees in others. I can admit when I was younger I definitely didn't get good deals, and at best maybe got a decent deal.  You can choose to think we got played this time because you don't believe it's ever possible to negotiate well on a new car.  But this isn't even about whether or not it was a good deal or a smart financial choice.  It's about whether or not someone else thinks a new car is worth it.  Plenty of mustachians will say no, and then go on to buy a late model used car that costs more than what we paid for our new car.

Our money, our rules.  We're FI and have zero debt (we even went against mustachian advice and paid off the mortgage).  Buying a used car would have done nothing to improve our situation.  I already said I prefer a new car, which doesn't even require that I get a good deal.

[StashingAway]

Our money, our rules.  We're FI and have zero debt (we even went against mustachian advice and paid off the mortgage).  Buying a used car would have done nothing to improve our situation.  I already said I prefer a new car, which doesn't even require that I get a good deal.

So, I wasn't trying to point fingers. Genuinely!

You don't have to defend your actions. I don't really care (not in a bad, dismissive way. I actually don't really mind). I don't think defining yourself as "mustachian" or not has much bearing on how good of a person you are. At the end of the day we are all making an impact so if we start trying to one up each other for vanity reasons we'll be sitting in a circle drinking our own piss. And, technically, MMM himself paid off his mortgage early so if we are definine "mustachian" then you are actually doing quite well (as opposed to, say, a "boglehead" which would spend more effort on the accounting and less on the lifestyle). But the definitions are silly, other than to give general context.

It was more of a casual thought. I always hear "but I got a good deal". Whether or not you did I cannot actually say (and again, I don't really care). But it echos of the "I saved $50 by spending $200" mindset that consumers often make. That's not directed at you personally- it's just a general statement.

Anyway, I love the Mazda 3's. I hope that yours continues to treat you well.

[RetiredAt63]

Another Mazda 3 owner!  My almost new (dealer demo model) 2010 Mazda 3 Sport hatchback is still going strong at over 280,000 km.  I've bought used and I've bought new, and for me the ability to be in total control of maintenance is a big advantage to buying new. I tend to be a bit compulsive about having maintenance done on schedule.  I trust me to do it.  If I bought used I would want to see all the maintenance records, have a local dealership give the car a thorough inspection, you know, totally OCD about it.

[Dicey]

I tell this story all the time, but since you asked...

DH is a painting contractor by trade.* He bought his Ford F150 XLT Extended Cab brand new in 2002. He paid cash for it - $20,000, including tax & license. It just turned over to 100,000 miles. It looks great and he says he's never getting rid of it. My biggest fear is that someone will steal it.

He's sitting beside me, so I asked him how much it would cost now. He laughed and said, "Probably about 45,000."

So yeah, sometimes buying new makes sense.

Also, it bugs the crap out of me when people say they're going to keep a vehicle and "drive it into the ground". No, just no. That's not the mustachian way. We take care of our shit, even when it's old./end rant

*Bonus points if you instantly knew the truck is white, the painter's favorite color.

[RetiredAt63]

I always thought "drive it into the ground"  meant you drove it until the repair/maintenance costs just weren't worth it any more.  Is there a more common meaning?

[StashingAway]

I always thought "drive it into the ground"  meant you drove it until the repair/maintenance costs just weren't worth it any more.  Is there a more common meaning?

[Metalcat]

Yeah, I'm pretty sure when people say they want to drive a car into the ground, they typically mean that they'll maintain it really well in order to drive it until it can't reasonably be repaired anymore.

I don't think that most people mean that they'll neglect it until it falls apart, although that is what a lot of people do.

[ChpBstrd]

Yeah, I'm pretty sure when people say they want to drive a car into the ground, they typically mean that they'll maintain it really well in order to drive it until it can't reasonably be repaired anymore.

I don't think that most people mean that they'll neglect it until it falls apart, although that is what a lot of people do.

"Drive it until the lease is up" is neglect it until it falls apart. 

[GuitarStv]

Yeah, I'm pretty sure when people say they want to drive a car into the ground, they typically mean that they'll maintain it really well in order to drive it until it can't reasonably be repaired anymore.

I don't think that most people mean that they'll neglect it until it falls apart, although that is what a lot of people do.

"Drive it until the lease is up" is neglect it until it falls apart.

Still better than "Drive it like a rental car" which means to operate the vehicle at all times with the intent to get the worst longevity possible from each component.

[researcher1]

Still better than "Drive it like a rental car" which means to operate the vehicle at all times with the intent to get the worst longevity possible from each component.

Which is why I can never understand all of the love on this forum for purchasing former rental cars.

[RetiredAt63]

Still better than "Drive it like a rental car" which means to operate the vehicle at all times with the intent to get the worst longevity possible from each component.

Which is why I can never understand all of the love on this forum for purchasing former rental cars.

I liked buying my demo.  Reduced price because it wasn't "new", but test drivers don't drive crazy when a dealer rep is sitting in the passenger seat.

If a rental car isn't "sporty" is it likely to be badly driven?

[Taran Wanderer]

I managed to throw the transmission of a rental minivan into park while in motion a couple of years ago. It made horrible noises. But after I settled down, it drove normally, park held normally while parked, and there was no apparent damage... maybe.  I wouldn’t know because I returned it and ne’er a word was spoken about the mishap.

[ChpBstrd]

Still better than "Drive it like a rental car" which means to operate the vehicle at all times with the intent to get the worst longevity possible from each component.

Which is why I can never understand all of the love on this forum for purchasing former rental cars.

The theory is they were maintained on a schedule. However, I don't think they ever come with any documentation of maintenance done, and if I was an evil car rental corporation, I might realize that if I am selling the car at 35,000 miles it doesn't matter if I do any preventative maintenance. It'll last that long and sell for around blue book.

Of course, used car lots also do not provide any documentation. Your best bet is always a FSBO used car so you can flip through the receipts that are still in the glove box to find out things like was the timing belt ever replaced or how old the tires are.

[charis]

We have an 09 corolla bought as a one-year ok rental car that came with all maintenance records and is doing well at 115k miles. Recently sold an 06 Jetta, also bought as one-year old rental. Wouldn't buy a VW again but it served us very well.

[researcher1]

If a rental car isn't "sporty" is it likely to be badly driven?

Yes, of course it is.
People beat the sh*t out of any type of rental car.

[RetiredAt63]

If a rental car isn't "sporty" is it likely to be badly driven?

Yes, of course it is.
People beat the sh*t out of any type of rental car.

I don't but look at the forum I hang out on.

[researcher1]

I don't but look at the forum I hang out on.

I'm not saying that every single renter beats the crap out of rental cars.
Though I certainly have in the past.

Think about it...it an easy numbers game.
Say a rental car has 30,000 miles, and an average of 300 miles put on by each renter, that means there have been 100 separate drivers.
If just 20% abuse it, that means 20 separate people have beat the crap out of it during their rental period.

[ericrugiero]

A lot of the rising price of used cars is due to the rising price of new cars, which have become more complex and more loaded with features. The percentage of cars with leather interiors, power mirrors, aluminum rims, and other luxury items has increased, while the number of cars you can still buy with crank windows or bench seats have decreased. Then there is the now-ubiquitous infotainment and networking equipment that has replaced the old AM/FM CD player. An economist would call this rising quality, while I would call it lifestyle creep on a nationwide scale.

The shift in demand towards luxury pickups/SUVs and away from basic economy cars would, in itself, raise the average when these vehicles are resold. That is, a luxury truck/SUV that cost $60k new will cost the next person $30k in a few years when it's lost half it's value. A stripped-down Nissan Versa that was $16k new will cost $8k in the same timeframe. Hybrid drivetrains, while a good thing that adds utility to a vehicle, also contribute to higher average used car prices.

Yes.  More and more people are buying luxury cars whether they can afford them or not.  It's another symptom of our society's consumerism, search for instant gratification and poor understanding of personal wealth management.  If more people wanted to buy economy cars then more would be available. 

All this is an effect of rising income inequality, or if you prefer the hollowing out of the middle class. If the demographic profile of people who can afford to buy new cars shifts away from the lower-to-mid middle class, and toward the upper middle class and upper  class, then the rest of us will have to eventually inherit used cars originally bought by people whose income is much higher than ours, rather than perhaps slightly larger than us.

The current imbalance between what the wealthy can afford to buy new and what the working classes can afford to buy used is also apparent in housing. More large houses than small houses are being built because only higher-income people are buying new homes. Thus, the young family with a working-class income who could live an efficient lifestyle in a 1k square foot house does not have the choice to buy that in many cities with tracts full of McMansions and 3-car merchandise storage units. So the young family stretches to buy a house twice as big as they need, and pick up two too-large used luxury vehicles because that's all that is for sale.

In this way, income inequality perpetuates itself. The family described above will be in a permanent state of financial struggle due to being house-poor and car-poor. And yet they can look around and see their lifestyle is completely normal.

I see this differently.  Many people are buying new cars and fancy houses.  It's not just the upper-mid and upper class.  In fact, most people are buying way more house and car than they can afford.  Lifestyle creep sets in and "everybody" buys as much as they can afford whether they are making $25,000/year or $250,000/year.  Go shop for a new car and one of the first questions asked will be "what monthly payment can you afford".  An 84 month loan is now common to keep the payment manageable on a vehicle they can't afford.  Many people don't even look at what they can afford, it's what they qualify to borrow.  A basic sales principle is to upsell everyone and it's tough to resist.   

This has very little to do with how much people make but has everything to do with how much they have in the bank.  We to learn to manage money as a society.  Upper class (income) people are broke just like the lower and middle class. 

I know tons of people who make lower or middle class money but drive vehicles they can't afford.  In my area, that's usually a fancy truck or SUV which is not only expensive to buy but also gets terrible MPG. 

[ericrugiero]

OP.  There are two parts to this answer, finances and environmental. 

Financially, you are in a position to afford a reasonable new car.  A small SUV like a Toyota RAV4 or Mazda CX-5 isn't unreasonable for you if that's what you really want.  You will probably lose a few thousand dollars over buying used but you can afford that if it's what you want to spend your money on.  I'm not sure I would call it "mustachian" but it's not a terrible decision either. 

Environmentally, a new car is probably a bad decision for the planet.  This comes into play because influencing others to have less environmental impact was one of MMM's primary drivers in writing the blog.  So, a new car is not "mustachian".  But, new vs used has a much smaller impact than what type of vehicle you drive and how many miles you drive. 

Personally, I wouldn't be afraid to buy new in your situation if you get a good deal and the vehicle is reasonable for your uses.  Definitely compare the cost of a new car (purchase price, not MSRP) with one that is 1-3 years old.  That way you can decide if the premium is worth it to you. 

[Car Jack]

I sometimes buy new cars and I sometimes buy used cars.  It depends on the depreciation curve for the specific car I'm looking to buy.

Examples:  2014 Jeep Wrangler Unlimited (I know this is THE vehicle to have here).  I searched and documented for 6 months.  What I found was that the best I could do was to MATCH the new car price with a 3 year old used vehicle.  Wranglers at that time held their value like crazy.  I then ordered exactly what I wanted which saved the money that most used vehicles added cost with the electric dog polishers and gasoline powered radial floor mats.

Used:  Well, any GM that's not a Corvette.  GM regularly dumps vehicles near year end.  I drive by a GMC dealer regularly and in the dumping times, they always have pickups out there with big "save $12,000 on this truck" signs.  Look at a 3 year old GM brand SUV and it's 50% of it's original price.  So there, you'd want to buy used.

What I've done:  Bought a 1 year old 2017 Subaru Legacy Limited.  Mid sized sedans are out of favor at the moment and they all drop like a rock.  So by buying one year old, I saved maybe $5k of cash AND instead of buying a premium, for that money, I bought a Limited.

I bought a new 2019 Subaru Crosstrek Premium manual transmission with zero extra options.  This model holds value too well and finding one of these with a manual and no options used is near impossible.  So yah....I could find a 2 year old one, but it had $3k in options and a price matching what I paid for new.

So after all that, the answer is "it depends".

[Dicey]

...electric dog polishers and gasoline powered radial floor mats.

Damn it! That's what I've been missing all my life!

[use2betrix]

This question is really dependent if you’re making $30k/yr or $300k/yr.

[draco44]

In my opinion, no. I think the sweet spot is to get a used car that's 1-2 years old. The care may still be under warranty for a while (helpful if you happen to get a lemon) and hasn't had much time to get worn out, but someone else takes the huge, initial depreciation hit.

[windytrail]

Absolutely not.

That we are debating this topic shows how strong the brainwashing car culture is in this country.

According to Car Fax, the average new car loses 20% of its value after 1 year and 40% after five years. (https://www.carfax.com/blog/car-depreciation).

[researcher1]

Absolutely not.
That we are debating this topic shows how strong the brainwashing car culture is in this country.
According to Car Fax, the average new car loses 20% of its value after 1 year and 40% after five years. (https://www.carfax.com/blog/car-depreciation).

This depreciation argument has been thoroughly debunked.
You are the one being brainwashed by blindly accepting these fake depreciation articles as fact.

The losses/depreciation quoted in this article and others is based off the new car MSRP...
and NO rational consumer pays MSRP for a mainstream vehicle.

To accurately calculate depreciation, you must use the ACTUAL sales price, not MSRP.
Savvy shoppers pay significantly less than MSRP for new vehicles, meaning the "new cars lose 20% value after 1 year" claim is completely bogus.

[researcher1]

According to Car Fax, the average new car loses 20% of its value after 1 year and 40% after five years. (https://www.carfax.com/blog/car-depreciation).

I just used their own site to determine the value of my exact vehicle I purchased new 1 year ago....
Typical car depreciation calculators can give you a rough idea of how much value a vehicle has lost over years. If you want more accurate information, however, you can rely on the Carfax History-Based Value tool.  https://www.carfax.com/value/ 

The CARFAX Private-Party value is OVER $1,000 MORE than I paid for it new last November.
So I've used/driven the vehicle for the last year, yet I could sell it now for more than I paid for it.

[Dicey]

According to Car Fax, the average new car loses 20% of its value after 1 year and 40% after five years. (https://www.carfax.com/blog/car-depreciation).

I just used their own site to determine the value of my exact vehicle I purchased new 1 year ago....
Typical car depreciation calculators can give you a rough idea of how much value a vehicle has lost over years. If you want more accurate information, however, you can rely on the Carfax History-Based Value tool.  https://www.carfax.com/value/ 

The CARFAX Private-Party value is OVER $1,000 MORE than I paid for it new last November.
So I've used/driven the vehicle for the last year, yet I could sell it now for more than I paid for it.

Are you including tax, license and the higher insurance premiums? Asking for a friend.