Author Topic: What's the sweet spot in used car prices?  (Read 44613 times)

The Money Monk

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Re: What's the sweet spot in used car prices?
« Reply #50 on: February 26, 2014, 10:31:22 PM »

I value the enhanced safety of my family more than I value $1500 over the course of five years.

Fine, but irrelevant.

You are  just moving the target now. The whole point of this thread was to talk about which was cheaper. You originally argued that it can be cheaper to buy a new car. Now you are just arguing that you would rather pay more for a safer car.

...and yes, the fuel economy difference is drastic.  A 2006 Altima gets 27 mpg on the highway, and at 20,000 miles a year costs $2333.33 ($3.15 a gallon for fuel, last price I paid).  A 2014 Altima gets 38 mpg on the highway, costing you $1657.89.  That's a difference of $675.44 a year, or $3377.17 over the course of 100,000 miles (assuming gas prices don't go up, which isn't likely).


I'll give you that one, That is surprisingly large difference. Not sure if most models have that big of a disparity over the last 8 years, but maybe.

Although it is interesting that you would choose a yearly mileage that is almost twice the national average (and even farther away from average mustachian driving). For people driving 8 thousand miles a year the cost difference is about 300 bucks a year. Still significant though.
« Last Edit: February 26, 2014, 10:33:49 PM by The Money Monk »

beltim

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Re: What's the sweet spot in used car prices?
« Reply #51 on: February 26, 2014, 10:41:50 PM »
He was saying that you can find other cars that old that get that mileage. but as i'm sure you are waiting to point out, while true it isn't really relevant to the discussion.

We have to compare the same car or none of these arguments make sense. Otherwise you could say it's cheaper to buy a brand new civic than a 5 year old benz.

Oh, I see.  Yes, I agree with you that you have to compare comparable cars (tautology alert!)

Personally, I'm interested in this discussion because I may soon be facing the same decision.  The "old" personal finance advice of buying 2-3 year old cars instead of new hasn't been financially advantageous any time in the last 5 years or so that I've looked.  I can see why the "beater" car strategy is financially advantageous, especially if you can do repairs yourself.  But I've tried to look into failure rates for that sort of beater car to figure out how likely it is to get a lemon, and I haven't had much luck finding that sort of data. 

dragoncar

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Re: What's the sweet spot in used car prices?
« Reply #52 on: February 26, 2014, 10:43:13 PM »

I value the enhanced safety of my family more than I value $1500 over the course of five years.

Fine, but irrelevant.


You are  just moving the target now. The whole point of this thread was to talk about which was cheaper. You originally argued that it can be cheaper to buy a new car. Now you are just arguing that you would rather pay more for a safer car.


He didn't say cheaper, he said "can be cost effective"

The Money Monk

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Re: What's the sweet spot in used car prices?
« Reply #53 on: February 26, 2014, 10:52:18 PM »

He didn't say cheaper, he said "can be cost effective"


I was never arguing that it was cheaper.  I was arguing that it can be cheaper.

The Money Monk

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Re: What's the sweet spot in used car prices?
« Reply #54 on: February 26, 2014, 10:56:29 PM »

Personally, I'm interested in this discussion because I may soon be facing the same decision.  The "old" personal finance advice of buying 2-3 year old cars instead of new hasn't been financially advantageous any time in the last 5 years or so that I've looked.  I can see why the "beater" car strategy is financially advantageous, especially if you can do repairs yourself.  But I've tried to look into failure rates for that sort of beater car to figure out how likely it is to get a lemon, and I haven't had much luck finding that sort of data.

I've never been a fan of the 'beater' strategy myself either, simply because there are other costs involved with breakdowns that aren't normally included with maintenance costs (missing work, quality of life, etc)

I do still think the numbers are in favor of getting a used car, just not a REALLY used car. Buying a car a year old with like 8k miles still usually gives a discount that is usually disproportionately large in relation to the minimal increase in risk of breakdown versus a brand new car.

dragoncar

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Re: What's the sweet spot in used car prices?
« Reply #55 on: February 26, 2014, 10:59:12 PM »

He didn't say cheaper, he said "can be cost effective"


I was never arguing that it was cheaper.  I was arguing that it can be cheaper.

Ha!  You are right... but I think he meant to say cost effective since a) that's the first thing he said and b) that interpretation is consistent with his argument that it's worth paying a bit more for safety

beltim

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Re: What's the sweet spot in used car prices?
« Reply #56 on: February 26, 2014, 11:10:23 PM »

Personally, I'm interested in this discussion because I may soon be facing the same decision.  The "old" personal finance advice of buying 2-3 year old cars instead of new hasn't been financially advantageous any time in the last 5 years or so that I've looked.  I can see why the "beater" car strategy is financially advantageous, especially if you can do repairs yourself.  But I've tried to look into failure rates for that sort of beater car to figure out how likely it is to get a lemon, and I haven't had much luck finding that sort of data.

I've never been a fan of the 'beater' strategy myself either, simply because there are other costs involved with breakdowns that aren't normally included with maintenance costs (missing work, quality of life, etc)

I do still think the numbers are in favor of getting a used car, just not a REALLY used car. Buying a car a year old with like 8k miles still usually gives a discount that is usually disproportionately large in relation to the minimal increase in risk of breakdown versus a brand new car.

Yeah, I've never been able to find that mythical 1 year old used car in the base model.  Every time I've looked, I see ~2 year old cars with all sorts of extra packages that I don't need, that are more expensive than the current year base model.  Am I just looking in the wrong place?

The Money Monk

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Re: What's the sweet spot in used car prices?
« Reply #57 on: February 26, 2014, 11:17:53 PM »
Ha!  You are right... but I think he meant to say cost effective since a) that's the first thing he said and b) that interpretation is consistent with his argument that it's worth paying a bit more for safety

Sure, I think you're right. He said both, and I'm assuming he meant both.

The reason I focused on the 'cheaper' part was because that is what the thread was about. While it's true that he thinks it's worth paying more for safety, its not really relevant to the thread any more than somebody saying its worth paying more for a better sound system or higher passenger capacity.

The Money Monk

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Re: What's the sweet spot in used car prices?
« Reply #58 on: February 26, 2014, 11:22:55 PM »

Yeah, I've never been able to find that mythical 1 year old used car in the base model.  Every time I've looked, I see ~2 year old cars with all sorts of extra packages that I don't need, that are more expensive than the current year base model.  Am I just looking in the wrong place?

Hard to say. There definitely aren't an abundance of people giving up their one year old cars, so you have to look around. There is a place local to me that seems to specialize in that type of situation though, and my GF has purchased a Nissan Sentra from them that was only a year old with less than 10k miles. Not sure if it was the totally basic model though.

Sorry I don't have more tips for you.

dragoncar

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Re: What's the sweet spot in used car prices?
« Reply #59 on: February 26, 2014, 11:58:38 PM »
Ha!  You are right... but I think he meant to say cost effective since a) that's the first thing he said and b) that interpretation is consistent with his argument that it's worth paying a bit more for safety

Sure, I think you're right. He said both, and I'm assuming he meant both.

The reason I focused on the 'cheaper' part was because that is what the thread was about. While it's true that he thinks it's worth paying more for safety, its not really relevant to the thread any more than somebody saying its worth paying more for a better sound system or higher passenger capacity.

To be fair, you did ask about the "sweet spot" and "best bargain," which could easily be interpreted as a value proposition vs. absolute cost.

The Money Monk

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Re: What's the sweet spot in used car prices?
« Reply #60 on: February 27, 2014, 12:09:14 AM »
To be fair, you did ask about the "sweet spot" and "best bargain," which could easily be interpreted as a value proposition vs. absolute cost.

I dunno man, I think that's reaching a bit. This is the first thing I wrote:

Quote from: The Money Monk
I'm not currently on the market myself, but just something I have been contemplating. Buying cheap used cars is one of the pillars of mustachianism (if you must have a car at all), so what is the "sweet spot" in terms of age and mileage where you are getting the maximum discount?


I specifically asked for a maximum discount in terms of age and mileage.
value proposition vs. absolute cost is good to consider, it's just not what I was asking.

Fastfwd

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Re: What's the sweet spot in used car prices?
« Reply #61 on: February 27, 2014, 06:40:31 AM »
For me the sweet spot is 4 years old and mileage does not matter much.
Winter salt is hard on rust so 10+ years old cars usually already started having issues.
I don't do much mileage in a year so a high mileage car would work for me.

Other things I look for:
Separate winter/summer tires are mandatory here so that's an expense. Don't want to buy a very old car that dies because resale value on tires is really bad.
Some cars need expensive timing belt maintenance at 60k miles. I factor this into the price or try to buy one that already had it done.

I could save some more by getting a 6-7 years old car and going through a single cycle of tires. I'd pay less upfront but more in maintenance and I really hate going to the garage. For me changing cars less often is worth it.

MrFancypants

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Re: What's the sweet spot in used car prices?
« Reply #62 on: February 27, 2014, 06:54:44 AM »
You may not have noticed that the link I posted is for parts pulled off the car already, which the salvage yard will ship to you.

Ship both the transmission and the car overseas to me to install it and then ship it back?  ....or ship it to my wife to figure out how to install herself?  You're only addressing half of the problem.

You'd be way wrong.  I think I was about 17 or 18 when I did my first, and in the years since have pulled transmissions (and engine/transmision as a unit, which is often easier) from vehicles ranging from an Austin-Healey Sprite to a D7 Cat.  Honestly, most are not all that hard, and the hard cases might be easier for a woman, since the problem is limited access to bolts.

You'd be a great candidate for the show 'Extreme Cheapskates'.  Because they could easily write an entire episode about a man who would ask his wife to change out a transmission in their car under those conditions.

Heck, I didn't even realize we were having an argument.  I thought we were having a discussion about how to minimize car costs.

It's not a discussion when you completely dismiss other ideas without attempting to understand the circumstances under which those idea could be advantageous.


It's not the world that's black & white, it's the purely financial question that you originally asked.  You are the one choosing to drag in all sorts of unquantifiable other factors to try to justify the choice you want to make.  Which of course is your privilege: if you want a particular sort of car (and can afford it), then go for it.  (Just as I, for instance, would never buy a 4-door sedan or a car with automatic transmission, even if it worked out to be the least expensive option.)  Just don't try to lie to yourself, or to us, about your choice being the financial 'sweet spot'.

Those "unquantifiable other factors" are what make this world shades of gray.  Without "unquantifiable other factors" the world is that perfect black and white where everything can be determined to be right or wrong before exploring context and asking further questions.

To suggest that your way is the only way for every person's situation and that it is always cheaper no matter what is absolutely, and completely arrogant.

Different people have different situations and needs, to not even try to understand what those are before giving advice is leading people towards the wrong decision.
« Last Edit: February 27, 2014, 06:56:33 AM by Mykl »

MrFancypants

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Re: What's the sweet spot in used car prices?
« Reply #63 on: February 27, 2014, 07:04:05 AM »
Geez, of course it CAN be, just like it CAN actually benefit you in certain crash conditions to not be wearing a seatbelt. But we are trying to find actionable data here, so I choose to focus on the situation that is true the vast majority of the time.

You're right, if you don't have the cash to purchase the car up front and you're taking away from other things...  it absolutely is the equivalent of conditions where it could have been favorable to not wear a seatbelt.

But not everyone is at that stage.  Some have the cash up front to pay for that new car and enjoy the long term benefits without a huge financial penalty.

MrFancypants

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Re: What's the sweet spot in used car prices?
« Reply #64 on: February 27, 2014, 07:19:35 AM »
Fine, but irrelevant.

You are  just moving the target now. The whole point of this thread was to talk about which was cheaper. You originally argued that it can be cheaper to buy a new car. Now you are just arguing that you would rather pay more for a safer car.

I mentioned that as an aside.  It's an added bonus which has value.  How much value is up to you to determine, but when I go into detail on fuel savings which make up the $1500 I didn't intend for anyone to dwell on the safety point too long.  I only mention it because it is a valid consideration when choosing a vehicle.


I'll give you that one, That is surprisingly large difference. Not sure if most models have that big of a disparity over the last 8 years, but maybe.

Although it is interesting that you would choose a yearly mileage that is almost twice the national average (and even farther away from average mustachian driving). For people driving 8 thousand miles a year the cost difference is about 300 bucks a year. Still significant though.

I chose 20,000 to make the numbers neat and tidy.  Slice it up any way you wish, but I thought our baseline was in miles driven.  If it takes longer for you to drive that 100,000 miles it likely ends up costing more, as the price of fuel will probably only go up over the years.

The difference depends entirely on the model.  The biggest gains seem to have come via mid sized sedans, although some economy class cars have made big improvements as well.  Take the Honda Fit for example, the difference is about 2 mpg (2007 model vs 2013), which clearly isn't drastic.  If a Honda Fit meets your needs, it may be unwise to buy a brand new one over a 2007 model.  It's the same thing with a Scion xB.

So it comes down to what your needs are.
« Last Edit: February 27, 2014, 07:21:34 AM by Mykl »

mbl

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Re: What's the sweet spot in used car prices?
« Reply #65 on: February 27, 2014, 07:32:47 AM »
Great discussion.  Would you mind giving your opinions on this scenario?

Bought a 2002 Toyota 4Runner(6 cyl.) new in Fall 2001.   No extra options except rear heater.  Paid $30k final price with everything.
Now has 342k miles on it.  I drive  30k miles a year.
Just had to put a new catalytic converter in and did new shocks within the last 6 months.

Been trying to do some research into what would make more sense if I HAD to get another vehicle.  Keep in mind, I'd prefer to drive the 4Runner indefinitely.
I love it the vehicle.

Looked at the Subaru Outback wagon and the Toyota Rav4 (4 cyclinders models)
I want better gas mileage and can certainly downsize a bit though I like having some height.

Would welcome your mathematical analysis on this one.
TIA




SnackDog

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Re: What's the sweet spot in used car prices?
« Reply #66 on: February 27, 2014, 07:37:11 AM »
Too bad this has devolved into such a pissing match.

The most interesting idea here is that prices of new and used cars, particularly at the low end of the price range, have converged in recent years.  Historically, America has been the shrine to all things new and used cars have suffered crushing depreciation. This is not true in other places.

I bought a 2006 Subaru in Australia in 2008 at about a 15% savings over new and with five years warranty. A year later with the financial crisis settled in, brand new Outbacks dropped in price to what I paid!  I owned the car 4.5 years, had no repairs on or off warranty, and sold it for 2/3 what I paid so no regrets.

There are some excellent arguments in this thread for paying a few thousand dollars more for a new car and getting benefit of the longer warranty as well as a better, safer, faster, cleaner, car which probably gets better gas mileage and gives greater peace of mind. In addition one can spec the car new to suit and crush dealers playing them off against one another.  Insurance costs may be higher for the newer car, depending on whether you purchase collision or prefer to self insure for that.

If you really are handy with car repairs, you can probably turn that into a fun and profitable side gig either repairing or fixing and flipping.  If you are into exotic cars, you can drive some pretty cool rides while making money on them.

MrFancypants

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Re: What's the sweet spot in used car prices?
« Reply #67 on: February 27, 2014, 07:54:22 AM »

He didn't say cheaper, he said "can be cost effective"


I was never arguing that it was cheaper.  I was arguing that it can be cheaper.

Ha!  You are right... but I think he meant to say cost effective since a) that's the first thing he said and b) that interpretation is consistent with his argument that it's worth paying a bit more for safety

Thank you sir, this was my intention.

I got "cheap" stuck in my head because of the scenario that was engineered to compare the $5000 used car with the new one.

Great discussion.  Would you mind giving your opinions on this scenario?

Bought a 2002 Toyota 4Runner(6 cyl.) new in Fall 2001.   No extra options except rear heater.  Paid $30k final price with everything.
Now has 342k miles on it.  I drive  30k miles a year.
Just had to put a new catalytic converter in and did new shocks within the last 6 months.

Been trying to do some research into what would make more sense if I HAD to get another vehicle.  Keep in mind, I'd prefer to drive the 4Runner indefinitely.
I love it the vehicle.

Looked at the Subaru Outback wagon and the Toyota Rav4 (4 cyclinders models)
I want better gas mileage and can certainly downsize a bit though I like having some height.

Would welcome your mathematical analysis on this one.
TIA

This is tricky because the question is basically going to be "at what point does my current vehicle cost more to keep on the road than what I would have to pay for a new(er) one?"  So you have to figure out what the operating costs of your 4Runner are, to include everything from fuel economy to maintenance and repairs.

The general rule that people typically go by if they're trying to stretch the max value out of a car is that if it costs more per month on average to maintain and repair a vehicle than it does to pay for a car payment, it's best to buy a newer vehicle.  Clearly you also want to factor in fuel costs as well.  I am not suggesting that you get a car payment, this is just the easiest way I can think of to do this comparison.  It applies even if you pay cash for whatever you replace your current vehicle with.

I think though, that after that analysis the conclusion you're likely to come to is that it's cheaper to just keep driving the 4Runner at least until something major fails.
« Last Edit: February 27, 2014, 07:59:42 AM by Mykl »

mbl

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Re: What's the sweet spot in used car prices?
« Reply #68 on: February 27, 2014, 08:21:41 AM »
Thanks Mykl, that's pretty much what I thought.
I loathe having to replace vehicles and do so only when absolutely necessary.

Anyone else care to weigh in?

aclarridge

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Re: What's the sweet spot in used car prices?
« Reply #69 on: February 27, 2014, 08:26:37 AM »
I've only ever once bought a used vehicle off a car lot, the rest of the time (and we've owned 9 vehicles in the last 8 years) have been private sales.  No sales tax, and you can negotiate.

I thought you had to pay HST on privately sold used cars here in Canada once you register them...?

Numbers Man

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Re: What's the sweet spot in used car prices?
« Reply #70 on: February 27, 2014, 08:46:19 AM »
I look for cars that are 5-8 years old and have 30-50 thousand miles. Hopefully there is some cosmetic problem with the car that drives other buyers away. I also like to go to a dealer lot that doesn't specialize in the car I'm buying.

For example, I bought a Mercedes Benz at a Cadillac dealer for $10k with 32,000 miles with a hole on top of the trunk in 2008. I don't remember what I paid to plug the hole and repaint but i believe it was a few hundred dollars. 2008 was probably one of the best years to buy a car since everyone was afraid to spend money, the dealers were desperate.

The Money Monk

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Re: What's the sweet spot in used car prices?
« Reply #71 on: February 27, 2014, 08:53:12 AM »
Too bad this has devolved into such a pissing match.

The most interesting idea here is that prices of new and used cars, particularly at the low end of the price range, have converged in recent years.  Historically, America has been the shrine to all things new and used cars have suffered crushing depreciation. This is not true in other places.


So the question then would be how much of a discount would it take to make it "worth it" to take the used car over the brand new one?

I know it's going to depend on the individual and how they value the money vs the less maintenance.

For very reliable makes like toyota most issues (with a new or used car) aren't going to surface until much later in their life, like after 150K miles. So I guess if you are going to take a car until it's very last legs (250k miles or more) then it might make sense to pay an extra 2 grand or whatever to have the car from brand new and be able to take care of it properly all along.

While if you are going to cycle cars more regularly it would make sense to buy them a few years old (from 50k miles to 150K miles) because you aren't likely to still have the car at the point when the extra reliability is likely to come into play.

I guess I'm just not buying the argument that you have a lot more to worry about with a car that is one year old with 8,000 miles than you do with a new car. Not sure how to find any data on that though.
« Last Edit: February 27, 2014, 09:02:33 AM by The Money Monk »

The Money Monk

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Re: What's the sweet spot in used car prices?
« Reply #72 on: February 27, 2014, 08:59:07 AM »
Great discussion.  Would you mind giving your opinions on this scenario?

Bought a 2002 Toyota 4Runner(6 cyl.) new in Fall 2001.   No extra options except rear heater.  Paid $30k final price with everything.
Now has 342k miles on it.  I drive  30k miles a year.
Just had to put a new catalytic converter in and did new shocks within the last 6 months.

Been trying to do some research into what would make more sense if I HAD to get another vehicle.  Keep in mind, I'd prefer to drive the 4Runner indefinitely.
I love it the vehicle.

Looked at the Subaru Outback wagon and the Toyota Rav4 (4 cyclinders models)
I want better gas mileage and can certainly downsize a bit though I like having some height.

Would welcome your mathematical analysis on this one.
TIA

doesn't sound like you have had any major mechanical issues with the truck though?

I would think it would be cheapest to keep driving it and pay for all minor and moderate repairs, and then evaluate the situation when its time for a big repair (new engine or transmission) that cost half as much as just buying another car.

This also depends on how reliable it is at that point. Even if it only cost 50 bucks to fix, if it is breaking down every week you would probably want to get a new car, as that could cause a lot of disruptions.

MrFancypants

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Re: What's the sweet spot in used car prices?
« Reply #73 on: February 27, 2014, 09:07:13 AM »
I guess I'm just not buying the argument that you have a lot more to worry about with a car that is one year old with 8,000 miles than you do with a new car. Not sure how to find any data on that though.

As a rule you can probably rely on that one year old car with 8000 to 12000 miles to be as reliable and dependable as a brand new one (I won't muddy this post with exceptions).

But if you set out to get a deal on a one year old car, you certainly still want to be armed with the knowledge of exactly how much you could get the same exact car for brand new.  If nothing else you get a little negotiating power that lets you remind the person you're dealing with how small the difference between their used car and a new one is to maybe get them to come off the price some. 

The problem with Hondas and Toyotas is that the people selling them are less inclined to deal because they know that somebody is going to be happy to pay the premium, so there's a good chance that they'll let you walk to see if they can get somebody in who doesn't actually understand how small the difference is between their used car and a new one.

*edit* you should also consider what your time is worth to you.  I spent a LOT of hours and money on gasoline going to different places to inspect and test drive cars to find the right one.  If you're looking for a good deal on a one year old car and *if* the margin is already very slim, based on this consideration it could be a better idea to go new over a very lightly used car.
« Last Edit: February 27, 2014, 09:16:32 AM by Mykl »

mbl

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Re: What's the sweet spot in used car prices?
« Reply #74 on: February 27, 2014, 09:14:02 AM »
Thanks Monk

Yeah, at the moment, all is holding up with it.
I figure, every month that I drive it and maintain it for less than a new car payment I'm doing well.

greenmimama

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Re: What's the sweet spot in used car prices?
« Reply #75 on: February 27, 2014, 09:24:39 AM »
I have wondere this same question many times, I would love to find something, drive it for a year or 2 and sell it for about the same.

A long time ago I bought a Chevy Berratta or however you spell that word. I bought it for 4,500 and sold it almost 2 years later for $4,700 I couldn't believe it, something about that car held it's value, I love driving it too, but I must have gotten a really good deal when I bought it, but I bought it from a dealer and sold it to another dealer, not a trade in but a sale.

I would love to do that over and over again, and again :)

Jamesqf

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Re: What's the sweet spot in used car prices?
« Reply #76 on: February 27, 2014, 11:47:29 AM »
He was saying that you can find other cars that old that get that mileage. but as i'm sure you are waiting to point out, while true it isn't really relevant to the discussion.

We have to compare the same car or none of these arguments make sense.

That's just my point: they aren't the same car, they just have the same nameplate*.  They're two styling/tech generations apart: http://en.wikipedia.org/wiki/Nissan_Altima 

*Going a bit further, GM has been cranking out cars called the 'Chevy Impala' since 1958.  Do you think the '58 model has much of anything in common with the 2014 version?

MrFancypants

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Re: What's the sweet spot in used car prices?
« Reply #77 on: February 27, 2014, 11:56:30 AM »
That's just my point: they aren't the same car, they just have the same nameplate*.  They're two styling/tech generations apart: http://en.wikipedia.org/wiki/Nissan_Altima 

*Going a bit further, GM has been cranking out cars called the 'Chevy Impala' since 1958.  Do you think the '58 model has much of anything in common with the 2014 version?

Funny you should mention the Impala...

Fun fact: GM is currently producing two completely different Impalas, one is the beautiful new redesigned Impala, and the other is the Impala "Limited" which is essentially a late model Impala that Chevrolet has chosen to keep in production for fleet sales.

The late model Impala is a solid car and generally reliable.  You can usually pick these up for pretty cheap and run to the ground.

Jamesqf

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Re: What's the sweet spot in used car prices?
« Reply #78 on: February 27, 2014, 12:09:47 PM »
Ship both the transmission and the car overseas to me to install it and then ship it back?  ....or ship it to my wife to figure out how to install herself?  You're only addressing half of the problem.

No, you're bringing in (even more) other factors that don't really apply to the cost argument.  Yes, if you can't do a particular job yourself, you'll have to pay someone else to do it, and it will cost more.  That applies whether it's changing a transmission, filling your gas tank, or eating out because you never learned to cook.

Quote
You'd be a great candidate for the show 'Extreme Cheapskates'.  Because they could easily write an entire episode about a man who would ask his wife to change out a transmission in their car under those conditions.

There we are, sexism rearing it's ugly head again.  I guess we come from different worlds, 'cause the idea of paying close to $6K for a transmission repair, or paying IIRC something like $15k for a car because you believe it might keep you from having to do a repair...  Well, in my entire life (and I'm not exactly young)I've only ever owned one car that cost more than $3500 to buy.

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It's not a discussion when you completely dismiss other ideas without attempting to understand the circumstances under which those idea could be advantageous.

No, I suppose not.  But I thought we were in a forum, and a thread, where the cost-minimizing context is taken for granted.  So yes, I can see where your ideas could be advantageous to those of a certain turn of mind.  Carrying your logic a bit further, why shouldn't we consider how advantageous it would be to have chauffeurs to drive our Rolls-Royces for us?

The late model Impala is a solid car and generally reliable.  You can usually pick these up for pretty cheap and run to the ground.

Well, there's another good example of us living in different worlds.  'Late model' just doesn't fit with my idea of cheap, any more than GM meshes with reliable.

MrFancypants

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Re: What's the sweet spot in used car prices?
« Reply #79 on: February 27, 2014, 12:48:22 PM »
...

*edit*

Nevermind, we're done.  I shouldn't have gotten caught up with you.  Have a nice day.
« Last Edit: February 27, 2014, 12:50:30 PM by Mykl »

The Money Monk

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Re: What's the sweet spot in used car prices?
« Reply #80 on: February 27, 2014, 01:13:37 PM »

That's just my point: they aren't the same car, they just have the same nameplate*.  They're two styling/tech generations apart: http://en.wikipedia.org/wiki/Nissan_Altima 

*Going a bit further, GM has been cranking out cars called the 'Chevy Impala' since 1958.  Do you think the '58 model has much of anything in common with the 2014 version?

to clarify, we have to compare the same MODEL

Yes the same model may be wildly different a few years apart, but that just factors into the central argument of this thread. The older car you get the more it will differ from the current version of that model, so you are getting 'more car' with the newer one, which is what Mykl was saying about safety features and fuel efficiency.

If a model changes so much over 5 years or so that they can no longer even be remotely comparable, then obviously that has to factor in to the calculations.

Jamesqf

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Re: What's the sweet spot in used car prices?
« Reply #81 on: February 27, 2014, 04:46:42 PM »
The older car you get the more it will differ from the current version of that model, so you are getting 'more car' with the newer one, which is what Mykl was saying about safety features and fuel efficiency.

I don't agree about 'more', at least if you're defining more as improved.  Different, yes (which was what I was saying :-))  It's not hard to think of models which have bulked up over the generations, adding size, weight, and bells & whistles while keeping the same name.  For instance, compare today's Honda Civic to the Civics of a couple of decades ago.

Now whether you want those things or not is a matter of personal taste, but the point, in a Mustachian context, is that you're going to be paying more for them.

loki

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Re: What's the sweet spot in used car prices?
« Reply #82 on: February 27, 2014, 04:47:59 PM »
I can easily see a 6k transmission repair rearing its head if you're a Volvo XC90 owner. Those things had issues.

Regarding the OP, my sweet spot is more of a threshold. I don't think I'd buy a car above ~120k again unless we were on a really tight budget. My last car, a Tercel, had around 169k on the clock when I bought it, and even though it only cost me around 1k every 29k miles to keep on the road, it still had a few different issues that I suspect popped up due to a lack of maintenance between 100k and 169k miles. I still kept it for ~30k miles. My next car, an Avalon, had 109k on the clock when buying it, and I've got a much better feeling about its long term reliability; not just because it's a Toyota, or a Toyota with exceptional reliability reviews, but because I'm sure I'll give it much better care between 110k and 170k than the average owner.

Our current cars have ~205k an ~112k on them and will be replaced in the next few years for safety upgrades; I'm one of those folks who's willing to spend significantly more for features like head airbags and ESC. Our next cars are probably going to be either a pair of SUVs or an SUV/minivan combo. My wife has higher mileage standards, and I think she'd prefer something with under 60k, so we'll probably spend more on that and less on mine. However, time will tell.

The Money Monk

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Re: What's the sweet spot in used car prices?
« Reply #83 on: February 27, 2014, 04:49:23 PM »
The older car you get the more it will differ from the current version of that model, so you are getting 'more car' with the newer one, which is what Mykl was saying about safety features and fuel efficiency.

I don't agree about 'more', at least if you're defining more as improved.  Different, yes (which was what I was saying :-))  It's not hard to think of models which have bulked up over the generations, adding size, weight, and bells & whistles while keeping the same name.  For instance, compare today's Honda Civic to the Civics of a couple of decades ago.

Now whether you want those things or not is a matter of personal taste, but the point, in a Mustachian context, is that you're going to be paying more for them.

Yeah I tend to agree with you, I was just trying to summarize what some of the other posters were getting at. ALthough I will admit that the gas mileage improvements have been quite dramatic in some of the models (like the aforementioned Altima) I think the safety stuff is a little overrated, and most of the other improvements make the cars more enjoyable but not really better.

The Money Monk

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Re: What's the sweet spot in used car prices?
« Reply #84 on: February 27, 2014, 04:52:31 PM »
I can easily see a 6k transmission repair rearing its head if you're a Volvo XC90 owner. Those things had issues.


Yeah its becoming more common today to with the CVTs.

My GFs sister had a basic nissan versa and the trans went out, and it unfortunately had a Continuously Variable Transmission and would have been like 6K to fix. And that's on a car that is maybe 17k brand new.

dragoncar

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Re: What's the sweet spot in used car prices?
« Reply #85 on: February 27, 2014, 05:17:40 PM »
I wonder how electric cars will change this analysis.  If I need a new car in, say, 10 years, it might be a hard choice between a 10 year old early-gen electric and a more modern version.  Or a 10 year old ICE. 

prodarwin

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Re: What's the sweet spot in used car prices?
« Reply #86 on: February 27, 2014, 05:29:13 PM »
I wonder how electric cars will change this analysis.  If I need a new car in, say, 10 years, it might be a hard choice between a 10 year old early-gen electric and a more modern version.  Or a 10 year old ICE.

I'm interested to find out.

Electric cars will surely make huge performance gains over the next 10 years, which is great.  More power, more range, etc.  BUT, that might de-value the early cars very quickly meaning I could pick up a current Leaf for pennies.  And that would meet my needs just fine.

Rural

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Re: What's the sweet spot in used car prices?
« Reply #87 on: February 27, 2014, 05:45:17 PM »
I'd say the sweet spot is about 10 years old / 100k miles. Buy from an individual, drive for another 100k miles, junk when it dies or when some idiot runs into me (the latter situation has resulted in a profit on two occasions, when the  idiot's insurance paid out more than I'd paid for the car).

This cycle can be maintained, easily, with $2,000-2,500* cars, if you're willing to put a couple hundred dollars of parts and two or three weekend days a year into upkeep. You have to know enough to do the upkeep, which also translates to knowing enough to tell if a car you're considering has major current problems (and don't buy if the engine has recently been pressure washed).

I don't know whether the 10 year / 100k model would work somewhere that roads have to be salted, but I don't intend to find out for entirely non-car-related reasons. :-)


* Now. When I started driving, this was probably $700-$800 cars, but I'm old.

beltim

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Re: What's the sweet spot in used car prices?
« Reply #88 on: February 27, 2014, 05:50:13 PM »
I'd say the sweet spot is about 10 years old / 100k miles. Buy from an individual, drive for another 100k miles, junk when it dies or when some idiot runs into me (the latter situation has resulted in a profit on two occasions, when the  idiot's insurance paid out more than I'd paid for the car).

This cycle can be maintained, easily, with $2,000-2,500* cars, if you're willing to put a couple hundred dollars of parts and two or three weekend days a year into upkeep. You have to know enough to do the upkeep, which also translates to knowing enough to tell if a car you're considering has major current problems (and don't buy if the engine has recently been pressure washed).

I don't know whether the 10 year / 100k model would work somewhere that roads have to be salted, but I don't intend to find out for entirely non-car-related reasons. :-)


* Now. When I started driving, this was probably $700-$800 cars, but I'm old.

Holy cow.  What 10 year/100k mile car can you buy for $2500?  Anyplace I've looked you're looking at cars twice that old/driven for that sort of price.

prodarwin

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Re: What's the sweet spot in used car prices?
« Reply #89 on: February 27, 2014, 06:00:43 PM »
I bought my '98 Saturn SL2 for $2750 with 100k miles on it in 2011 from a dealer.  I just saw a SW2 with 75k on it on craigslist for $1700 yesterday.  I want to pick it up badly.

I bet there are many cars not made by Toyota or Honda you could find in a similar situation.

Rural

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Re: What's the sweet spot in used car prices?
« Reply #90 on: February 27, 2014, 06:13:02 PM »
I'd say the sweet spot is about 10 years old / 100k miles. Buy from an individual, drive for another 100k miles, junk when it dies or when some idiot runs into me (the latter situation has resulted in a profit on two occasions, when the  idiot's insurance paid out more than I'd paid for the car).

This cycle can be maintained, easily, with $2,000-2,500* cars, if you're willing to put a couple hundred dollars of parts and two or three weekend days a year into upkeep. You have to know enough to do the upkeep, which also translates to knowing enough to tell if a car you're considering has major current problems (and don't buy if the engine has recently been pressure washed).

I don't know whether the 10 year / 100k model would work somewhere that roads have to be salted, but I don't intend to find out for entirely non-car-related reasons. :-)


* Now. When I started driving, this was probably $700-$800 cars, but I'm old.

Holy cow.  What 10 year/100k mile car can you buy for $2500?  Anyplace I've looked you're looking at cars twice that old/driven for that sort of price.

Current 2003 Kia was $1200 with 90k, actually (bought last year, so it was ten years old then.) The totalled 2001 model Kia it replaced had been $1600 at 9 years old and 105k miles. That's the one I made a profit on from the insurance company, which paid out $2200 with us keeping the car. The last Honda Civic I bought was closer to 15 years old at the time (in 2006, and sadly my husband wrecked that one), but was $1250 and also just under 100k miles.

To get those prices, you usually have to go to individuals, not dealers, and I figure the $2,000-2500 range is more realistic than my actual experience. But those are my last three vehicles, including the current one.

newideas2013

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Re: What's the sweet spot in used car prices?
« Reply #91 on: February 27, 2014, 06:32:33 PM »
I'd say the sweet spot is about 10 years old / 100k miles. Buy from an individual, drive for another 100k miles, junk when it dies or when some idiot runs into me (the latter situation has resulted in a profit on two occasions, when the  idiot's insurance paid out more than I'd paid for the car).

This cycle can be maintained, easily, with $2,000-2,500* cars, if you're willing to put a couple hundred dollars of parts and two or three weekend days a year into upkeep. You have to know enough to do the upkeep, which also translates to knowing enough to tell if a car you're considering has major current problems (and don't buy if the engine has recently been pressure washed).

I don't know whether the 10 year / 100k model would work somewhere that roads have to be salted, but I don't intend to find out for entirely non-car-related reasons. :-)


* Now. When I started driving, this was probably $700-$800 cars, but I'm old.

Holy cow.  What 10 year/100k mile car can you buy for $2500?  Anyplace I've looked you're looking at cars twice that old/driven for that sort of price.

That is cheap, but I'd be looking at base model kia.

Quick search on kijiji for Edmonton (prices in CDN dollars, cars listed in kilometers vs. miles). So I did a quick search for 2003-2005 (~roughly 10 years old). 100k miles is roughly 160,000km and most of these cars are a bit higher (180-220k) but prices are anywhere from 1500-2500 (that was the range I set to search).

Note you won't see many Toyota/Honda as they hold their value so well on the used car market (as do VW, Subaru from what I've noticed). Most anything else is fair game for rapid depreciation. That might also be the persons problem who is convinced a new car is best. If they are looking at Toyota, it very well might be in his situation.


Ask yourself what reasonable person buys a brand new Toyota, drives it for 10k and sells it the following year at a considerable loss? Where is the incentive here? Why not do a 2 year lease instead? How MANY people do you expect to own vehicles like this? And you want them to have full dealership paperwork of service performed, as if you will punish them with lowball offers if they don't have all this for you? These mythical people do not exist in my eyes. Nobody buys a brand new perfect vehicle and sells it for a 6-8k loss the next year. It's just stupid. You might find 1yr used cars from a rental fleet, or the odd person does exist who makes these stupid moves, but not enough to cover the demand from the used car market, especially the "high demand" honda civic, toyota corolla market.

Low demand - brand new Toyota Corolla. Dealers will give you huge incentives to buy. They were clearing out remaining 2013 models for 5 months on the radio.
High demand - used Toyota Corolla. Especially with complete service history, low mileage and mint condition. Such high demand they can ask damn close to retail price. It's like the apple iPad of used cars, you can crack the box, use it for a few months and still list it at 95% retail and people will scoop it up just to save the tax and convince themselves they don't need the warranty, receipt or packaging.

Anyways used cars can easily be had with 100k miles that are 10 years old for 2500 bucks, I found a bunch with a quick search in Canadian currency which is worth less then USD. Your dollar goes further, surely you can find one in a 2 second search on Craigslist. It just won't be a mint condition Honda Civic or Toyota Corolla. It will probably be a Saturn, Dodge, Kia, Pontiac, maybe a Hyundai, etc.

beltim

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Re: What's the sweet spot in used car prices?
« Reply #92 on: February 27, 2014, 07:23:37 PM »
Anyways used cars can easily be had with 100k miles that are 10 years old for 2500 bucks, I found a bunch with a quick search in Canadian currency which is worth less then USD. Your dollar goes further, surely you can find one in a 2 second search on Craigslist. It just won't be a mint condition Honda Civic or Toyota Corolla. It will probably be a Saturn, Dodge, Kia, Pontiac, maybe a Hyundai, etc.

Prices vary by region.  It's a lot harder to find than a 2 second search on Craigslist.

Rural

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Re: What's the sweet spot in used car prices?
« Reply #93 on: February 27, 2014, 07:44:29 PM »
Anyways used cars can easily be had with 100k miles that are 10 years old for 2500 bucks, I found a bunch with a quick search in Canadian currency which is worth less then USD. Your dollar goes further, surely you can find one in a 2 second search on Craigslist. It just won't be a mint condition Honda Civic or Toyota Corolla. It will probably be a Saturn, Dodge, Kia, Pontiac, maybe a Hyundai, etc.

Prices vary by region.  It's a lot harder to find than a 2 second search on Craigslist.

If the cost is that much higher in your region, consider whether it would be cost effective to search Craigslist a couple hundred miles away and drive out on a weekend with a friend or SO to test drive a few and hopefully drive on back. Geographic arbitrage with vehicles.

beltim

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Re: What's the sweet spot in used car prices?
« Reply #94 on: February 27, 2014, 07:56:24 PM »
Anyways used cars can easily be had with 100k miles that are 10 years old for 2500 bucks, I found a bunch with a quick search in Canadian currency which is worth less then USD. Your dollar goes further, surely you can find one in a 2 second search on Craigslist. It just won't be a mint condition Honda Civic or Toyota Corolla. It will probably be a Saturn, Dodge, Kia, Pontiac, maybe a Hyundai, etc.

Prices vary by region.  It's a lot harder to find than a 2 second search on Craigslist.

If the cost is that much higher in your region, consider whether it would be cost effective to search Craigslist a couple hundred miles away and drive out on a weekend with a friend or SO to test drive a few and hopefully drive on back. Geographic arbitrage with vehicles.

That is a nice, constructive suggestion.  Thank you!

The Money Monk

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Re: What's the sweet spot in used car prices?
« Reply #95 on: February 27, 2014, 08:21:58 PM »
I wonder how electric cars will change this analysis.  If I need a new car in, say, 10 years, it might be a hard choice between a 10 year old early-gen electric and a more modern version.  Or a 10 year old ICE.

I think the car that is going to change this is the Elio. Electric cars have a ways to go.

m8547

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Re: What's the sweet spot in used car prices?
« Reply #96 on: February 27, 2014, 08:52:44 PM »
There are some crazy listings on used cars out there. I was browsing craigslist today and I found a 2009 Honda Civic with 57000 miles listed for just under MSRP! Basically double what it's worth. Carmax also has a nice assortment of 2013 cars listed for more than the price of a new 2014, and you can't even negotiate with them to bring the price down.

MrFancypants

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Re: What's the sweet spot in used car prices?
« Reply #97 on: February 28, 2014, 07:13:14 AM »
There are some crazy listings on used cars out there. I was browsing craigslist today and I found a 2009 Honda Civic with 57000 miles listed for just under MSRP! Basically double what it's worth. Carmax also has a nice assortment of 2013 cars listed for more than the price of a new 2014, and you can't even negotiate with them to bring the price down.

Carmax is terrible.  I briefly browsed their lot to see what was available and you won't find a good deal there.

On the point of travelling to other areas....  this is a good idea but you have to keep one thing in mind....  don't travel so far that you feel obligated to buy the car no matter the condition just to justify the time and cost of having to travel to see it.  Always be willing to walk away.  This is a better option if you're looking for something less common doesn't pop up often in your region (typically people looking for older sports cars have to do this).  If you're looking for something as mundane as a Corolla you're typically better off just looking at Craigslist and Autotrader every day until something pops up.
« Last Edit: February 28, 2014, 07:16:28 AM by Mykl »

MrMoneyPinch

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Re: What's the sweet spot in used car prices?
« Reply #98 on: February 28, 2014, 10:04:44 AM »
My 2003 has around 70k miles. 

Not sure if I should be proud of that or ashamed.  Probably a little of both.
Don't worry, I junked my 1994 Altima in 2012 with 120 000kms on it (under 100k miles)  Proves I have not been a car clown.
Rust had taken a large bite into structural steel :(  Rust is very antimustachian IMO.

lithy

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Re: What's the sweet spot in used car prices?
« Reply #99 on: February 28, 2014, 10:42:48 AM »
Funny you should mention the Impala...

Fun fact: GM is currently producing two completely different Impalas, one is the beautiful new redesigned Impala, and the other is the Impala "Limited" which is essentially a late model Impala that Chevrolet has chosen to keep in production for fleet sales.

The late model Impala is a solid car and generally reliable.  You can usually pick these up for pretty cheap and run to the ground.

I did not know this. 

I have owned a few Ford Taurus cars over the years, had a 93, then a 92 SHO (for fun car), and currently a 2003 with 190k on it. 

The great thing about the last generation Taurus before it had a brief discontinuation/reintroduction is that it was sold mainly as a fleet vehicle which destroyed the resale value of the car.

You could buy one year old, under 20k miles, former fleet cars for under 10k back in 2008/09.  They had 'basic' luxuries like power windows/locks, but not leather, moonroofs, or anything fancy.  My opinion at least is that while yes there is a gamble buying used that people thrashed on a car, in general even rentals are not terrorized like people want to believe.  Rental car companies wouldn't make much money if every other person rented the car just to do high rev neutral drops in an automatic sedan that had to be replaced or out of service for transmission repairs. 

Second, you can figure out what sort of fleet the car as actually in before sale just from a VIN check.  Corporate fleets?  Government fleets?  Rental fleets?  You can choose a comfort level from different fleets.

Similarly I would have no problem buying old Crown Vic PIs that some 50 year old detective was using to go around town to scenes rather than running bank robbers off the road.

Looks like I'll add Impalas to the list of cars to take a look for in a few years.

 

Wow, a phone plan for fifteen bucks!