Author Topic: Buying a brand new car?  (Read 14043 times)

elduderino

  • 5 O'Clock Shadow
  • *
  • Posts: 13
Buying a brand new car?
« on: August 17, 2017, 03:24:38 PM »
Hi, I already read MMM articles on buying a brand new car. However, I'm still leaning towards doing it.
I don't want to buy something used and have it break down on me and have to junk it. I don't want to lose money buy buying a lemon.
Also I don't to lease for 3 years and then pay a high price to buy that car.
I'm moving from NY to Vegas and will need a car for work. I have money saved that I could put down on a car. I also have great credit.
I'm thinking of buying a brand new toyota rav4 for 20-23k. I would put 5k down and have monthly payments of $300-400 for 5 years.
I plan on keeping this car as long as possible.

Any advice? Can I still be a moustachian if I buy a brand new car?

Eric

  • Magnum Stache
  • ******
  • Posts: 4057
  • Location: On my bike
Re: Buying a brand new car?
« Reply #1 on: August 17, 2017, 04:40:31 PM »
Where do you think used lemons come from?  Buying new is no guarantee of anything other than the fact that you're going to pay too much for a car.

dycker1978

  • Pencil Stache
  • ****
  • Posts: 768
  • Age: 45
  • Location: Regina, Saskatchewan, Canada
Re: Buying a brand new car?
« Reply #2 on: August 17, 2017, 04:46:11 PM »
Hi, I already read MMM articles on buying a brand new car. However, I'm still leaning towards doing it.
I don't want to buy something used and have it break down on me and have to junk it. I don't want to lose money buy buying a lemon.
Also I don't to lease for 3 years and then pay a high price to buy that car.
I'm moving from NY to Vegas and will need a car for work. I have money saved that I could put down on a car. I also have great credit.
I'm thinking of buying a brand new toyota rav4 for 20-23k. I would put 5k down and have monthly payments of $300-400 for 5 years.
I plan on keeping this car as long as possible.

Any advice? Can I still be a moustachian if I buy a brand new car?

I love this, I don't want to lose money, but a I am going to throw away 3-400 a month for 5 years to a depreciating asset. 
All of the interest you pay will be lost money.  All the depreciation will be lost money.  Never mind the increased insurance costs, that you will have to take because you have a loan.  Its not worth it.  Buying a new car is the single biggest finical mistake I ever made.

Travis

  • Magnum Stache
  • ******
  • Posts: 4219
  • Location: California
Re: Buying a brand new car?
« Reply #3 on: August 17, 2017, 04:56:55 PM »
Hi, I already read MMM articles on buying a brand new car. However, I'm still leaning towards doing it.
I don't want to buy something used and have it break down on me and have to junk it. I don't want to lose money buy buying a lemon.
Also I don't to lease for 3 years and then pay a high price to buy that car.
I'm moving from NY to Vegas and will need a car for work. I have money saved that I could put down on a car. I also have great credit.
I'm thinking of buying a brand new toyota rav4 for 20-23k. I would put 5k down and have monthly payments of $300-400 for 5 years.
I plan on keeping this car as long as possible.

Any advice? Can I still be a moustachian if I buy a brand new car?

Used does not automatically mean ready to die.
Don't lease. Ever.
You'd pay the equivalent of a major repair bill every month for 5 years for the security of not having to take the car in for repairs?

There are probably a number of threads here on the forums about how to research and buy a used car without getting screwed.  If not, check out Edmunds.com.  They post articles like that all the time.

shawndoggy

  • Bristles
  • ***
  • Posts: 323
Re: Buying a brand new car?
« Reply #4 on: August 17, 2017, 05:04:45 PM »
FWIW if you wait to buy till you get to Nevada, and you buy used from a private party, there's no sales tax.  So you can basically get an 8% discount for nothing.

BigLou

  • 5 O'Clock Shadow
  • *
  • Posts: 16
Re: Buying a brand new car?
« Reply #5 on: August 17, 2017, 05:05:18 PM »
I just bought a brand new vehicle in April. BUT:

1) I drove my last vehicle, a 1996 Ford Ranger, for 21 years
2) I was able to pay cash for the new vehicle.  I would not have bought a brand new vehicle unless I was able to pay cash. Took me a long time to become debt free, and I plan on staying that way
3) I am completely debt free, and will continue to be debt free since I paid cash for the new vehicle.
4) Since I am debt free I am able to continue maxing out my TSP (401k) AND my Roth IRA. If I had financed the vehicle the payments would have prevented me from maxing out my retirement accounts every month, and that is a top priority for me
4) I tend to put relatively few miles on my vehicles. This was a major reason my Ranger lasted me 21 years.
5) I'm an Old Geezer (55) so if this new vehicles lasts as long as my last one, this could be the last vehicle I ever buy cuz it might last longer than me, but just in case I've opened a mutual fund account specifically for my next vehicle purchase and I put a small amount of money in that every month.

So everyone's situation is different, therefore I'm not suggesting you should buy a brand new vehicle because I, or anyone else, did. In fact I would say that the majority of the time it does not make sense to buy a brand new vehicle, but with my particular situation being what it is I did it and have no regrets.

koshtra

  • Pencil Stache
  • ****
  • Posts: 664
  • Location: Portland, Oregon, USA
    • Mole
Re: Buying a brand new car?
« Reply #6 on: August 17, 2017, 05:08:08 PM »
I dunno, I just couldn't stand to drive my new car off the sales lot and hear the ka-chunk! of five thousand dollars falling off its value and hitting the pavement :-)

GenXbiker

  • Bristles
  • ***
  • Posts: 327
Re: Buying a brand new car?
« Reply #7 on: August 17, 2017, 05:33:10 PM »
Face punch for considering buying a brand new vehicle.

alsoknownasDean

  • Magnum Stache
  • ******
  • Posts: 2843
  • Age: 39
  • Location: Melbourne, Australia
Re: Buying a brand new car?
« Reply #8 on: August 17, 2017, 07:11:41 PM »
Any advice? Can I still be a moustachian if I buy a brand new car?

If you buy something fairly basic (Yaris, Corolla, Civic, etc), pay cash and drive it for 15-20 years, then it's not so bad. Considering spending more than all of your money on it (and buying an SUV) isn't :)

Although if you have the cash already sitting aside earning good interest and finance rates are sufficiently low, financing isn't terrible, but most people don't.

Although, cars that are five or so years old are generally still pretty good, and sell at a significant discount to the new price.

DavidAnnArbor

  • Handlebar Stache
  • *****
  • Posts: 2266
  • Age: 58
  • Location: Ann Arbor, Michigan
Re: Buying a brand new car?
« Reply #9 on: August 17, 2017, 07:17:39 PM »
A 1 or 2 year old used  toyota rav4  is going to be pretty similar in price to a brand new. These cars don't depreciate much, therefore a new car of this model type would be perfectly fine.

Syonyk

  • Magnum Stache
  • ******
  • Posts: 4610
    • Syonyk's Project Blog
Re: Buying a brand new car?
« Reply #10 on: August 17, 2017, 08:22:49 PM »
I don't want to buy something used and have it break down on me and have to junk it. I don't want to lose money buy buying a lemon.

I know, right?  I mean, the headlight goes out and, boom.  Crush it, replace it.  A tire is low?  To the smasher.  Won't start because the fuel gauge is on E?  Why, look at all those new car deals out there!

</sarcasm>

You're talking about spending $29k so that, perhaps, you will have a car that won't break.

Do you have any idea how much shop time that buys, or how many decades of DIY parts and tools that is?

You can buy a $10k car, have $19k left over for repairs, and come out way, way ahead.

Get a car with less than 100k miles on it, ideally 5-10 years old, and you'll be fine.  Even if you have to totally replace the engine, you're still far cheaper than what you're planning on doing.

ketchup

  • Magnum Stache
  • ******
  • Posts: 4323
  • Age: 33
Re: Buying a brand new car?
« Reply #11 on: August 17, 2017, 09:21:10 PM »
My dad bought a used car with 80k miles on it for $3700 some years ago.  At 90k, he had to get some suspension parts replaced; it cost $400!  Around 110k, he had a major engine issue that had to be fixed ($1200)!

Guess what, he still has the car (at around 140k) and it's running great.  With $3700+$400+$1200 into it (apart from normal maintenance), he's still spend less than five grand and has a great car (and with plenty having gone wrong)!  It'd be even cheaper if he DIY'd the repairs, but even without that, he's still way ahead.

I'd much rather buy the same car my dad bought and have the same "expensive" problems than spend over $20k on a car that *probably won't but still might* have problems.

(I buy older/cheaper cars than my dad but I DIY the repairs/maintenance so his numbers are easier to realistically throw out there.)

koshtra

  • Pencil Stache
  • ****
  • Posts: 664
  • Location: Portland, Oregon, USA
    • Mole
Re: Buying a brand new car?
« Reply #12 on: August 17, 2017, 09:42:55 PM »
It is realio, trulio, throwing away real money -- a boatload of real money -- to buy an illusion of safety. Your brand new car won't have a force field around it causing it not to break down. Or get smashed into. Owning a car means fixing it or having it fixed from time to time.

And it means owning a very pricey thing that never, ever increases in value. The more you spend, the more you stand to lose.

So the short answer is no -- there really is no way it's Mustachian. You'll be setting yourself back thousands of dollars -- and developing a habit of buying false security, which is even worse. What really makes you secure is having lots of money, wisely invested. When you've got a million dollars churning out an annual income for you, you can buy all the RAV4's you want and snap your fingers at gas prices. *That* is security. Work towards that, not towards the shiny booby prize of a new car now.

elduderino

  • 5 O'Clock Shadow
  • *
  • Posts: 13
Re: Buying a brand new car?
« Reply #13 on: August 17, 2017, 09:57:50 PM »
But what about having a warranty?

elduderino

  • 5 O'Clock Shadow
  • *
  • Posts: 13
Re: Buying a brand new car?
« Reply #14 on: August 17, 2017, 10:02:54 PM »
Where is the best place to buy a used car?
What about the certified pre-owned cars?

Optimiser

  • Pencil Stache
  • ****
  • Posts: 771
  • Age: 41
  • Location: PNW
Re: Buying a brand new car?
« Reply #15 on: August 17, 2017, 10:05:12 PM »
But what about having a warranty?

Buy a well-reviewed car from a reliable manufacturer and set a side some money each month (much less than the $300-400/month you'll be saving by not buying new) for future repairs and maintenance expenses.

one piece at a time

  • Stubble
  • **
  • Posts: 100
Re: Buying a brand new car?
« Reply #16 on: August 17, 2017, 10:06:04 PM »
The two main problems you want to warrant against are unexpected breakdown and unplanned expense. Uber will sort you out for the first one and for the second one you can spend some money on preventative maintenance yourself (after reading up on forums for whatever car you chose) as well as putting cash into VEA. If the VEA goes up, your parts cost will go up, if the VEA goes down then at least your likely to be getting cheaper parts in that deflationary environment.

one piece at a time

  • Stubble
  • **
  • Posts: 100
Re: Buying a brand new car?
« Reply #17 on: August 17, 2017, 10:11:14 PM »
https://lasvegas.craigslist.org/cto/d/manual-elantra-gt-2013-white/6245341573.html

not cheap, but will give trouble free driving (and it's a stick shift!)

JLee

  • Walrus Stache
  • *******
  • Posts: 7512
Re: Buying a brand new car?
« Reply #18 on: August 17, 2017, 10:11:54 PM »
I have a friend who had a brand new car bought back by the dealer because they couldn't fix recurring problems. I have another friend who's certified pre-owned vehicle spent five consecutive months at a dealer.

Meanwhile, my '05 with 186k miles on it is chugging right along.

one piece at a time

  • Stubble
  • **
  • Posts: 100
Re: Buying a brand new car?
« Reply #19 on: August 17, 2017, 10:14:21 PM »

Optimiser

  • Pencil Stache
  • ****
  • Posts: 771
  • Age: 41
  • Location: PNW
Re: Buying a brand new car?
« Reply #20 on: August 17, 2017, 10:18:53 PM »

Travis

  • Magnum Stache
  • ******
  • Posts: 4219
  • Location: California
Re: Buying a brand new car?
« Reply #21 on: August 17, 2017, 10:22:11 PM »
Figure out how much warranties are on used cars and what it could potentially cover, and bounce that against the money you're saving by not buying new.  Odds are setting aside each month a fraction of what you were going to throw out as a car payment will cover any future repairs.

elduderino

  • 5 O'Clock Shadow
  • *
  • Posts: 13
Re: Buying a brand new car?
« Reply #22 on: August 17, 2017, 11:00:57 PM »
I have a friend who had a brand new car bought back by the dealer because they couldn't fix recurring problems. I have another friend who's certified pre-owned vehicle spent five consecutive months at a dealer.

Meanwhile, my '05 with 186k miles on it is chugging right along.

What kind of car do you have?

JLee

  • Walrus Stache
  • *******
  • Posts: 7512
Re: Buying a brand new car?
« Reply #23 on: August 17, 2017, 11:07:31 PM »
I have a friend who had a brand new car bought back by the dealer because they couldn't fix recurring problems. I have another friend who's certified pre-owned vehicle spent five consecutive months at a dealer.

Meanwhile, my '05 with 186k miles on it is chugging right along.

What kind of car do you have?

I have a very unmustachian pair -- 1991 Toyota MR2 Turbo (265k+, engine rebuilt 4 years ago) and a 2005 Lexus GX470 @ 186k with original drivetrain.

T-Money$

  • Stubble
  • **
  • Posts: 233
  • Location: New York
Re: Buying a brand new car?
« Reply #24 on: August 18, 2017, 05:31:28 AM »
I disagree buying used.  I've purchased 3 used cars in my life, and even being mechanically inclined two of them ended up having significant problems that took a long time to diagnose and eventually a lot of money.  I got rid of one of them because the problem was not fixable.  How does $4,000 in one year and lots and lots (like weeks) of free time spent trying to fix a problem?  Honda's and Subaru's, by the way. 

Buy a good, efficient and cheap car new.  Manual transmission.  Find a good deal.  Keep it forever.

You never know how a used car has been driven. 

My newish Honda Fit hasn't lost much value at all, and it gets about 45 mpg when I drive it carefully.  A used car isn't going to compare to the reliability of a new, efficient, highly rated car.  I'm a Mustachian because I want to spend my free time the way I want, not diagnosing the future problems on that used car.  By the way, a 2017 manual transmission Fit (new) can be had for around $15k.

I like to keep my things in very nice condition.  I take care of them and maintain them.  Very few people take proper care of their vehicle.  Used cars come with risk, too much for me.  I always found it strange a Mustachian won't do much more risk in the stock market aside from a index fund, but they are totally content with buying a used car.  This never made sense to me.

Didn't MMM buy a new car recently?  I thought I read a post about that.  One of those electric thing-a-ma-jigs. 
« Last Edit: August 18, 2017, 05:36:40 AM by egillespie »

nereo

  • Senior Mustachian
  • ********
  • Posts: 17499
  • Location: Just south of Canada
    • Here's how you can support science today:
Re: Buying a brand new car?
« Reply #25 on: August 18, 2017, 05:55:33 AM »
I'd just like the address the topic of reliability, lemons and warranties

To me, the greatest advantage of buying a used car is that there is already a ton of information about its reliability and trouble spots.  Conversely, there's no information about how reliable a new car will be.  Any decent mechanic can tell you how a used car has been treated. Overwhelmingly cars, even old cars, don't just stop working one day when its raining and you're late for to meet your dying uncle i the hospital. It's had the problem literally for months - easily predicted by a mechanic and most likely giving you all sorts of warning signs you've been intentionally ignoring.

regarding warranties - realize they are always there to make money.  Self-insuring (basically having enough money to pay for your own repairs) wins over having a warranty. If you save $10k on a car that up-front buying a gently used vehicle that money already pays for your repairs and maintenance ont eh car, probably for its entire lifespan.

marielle

  • Pencil Stache
  • ****
  • Posts: 860
  • Age: 30
  • Location: South Carolina
Re: Buying a brand new car?
« Reply #26 on: August 18, 2017, 06:16:52 AM »
I'd just like the address the topic of reliability, lemons and warranties

To me, the greatest advantage of buying a used car is that there is already a ton of information about its reliability and trouble spots.  Conversely, there's no information about how reliable a new car will be.  Any decent mechanic can tell you how a used car has been treated. Overwhelmingly cars, even old cars, don't just stop working one day when its raining and you're late for to meet your dying uncle i the hospital. It's had the problem literally for months - easily predicted by a mechanic and most likely giving you all sorts of warning signs you've been intentionally ignoring.

regarding warranties - realize they are always there to make money.  Self-insuring (basically having enough money to pay for your own repairs) wins over having a warranty. If you save $10k on a car that up-front buying a gently used vehicle that money already pays for your repairs and maintenance ont eh car, probably for its entire lifespan.

This. You have no idea if the car you're buying is one that's going to have bad transmissions or other problems. For example, the previous owner of my car replaced the transmission at 118k miles. Now it's old enough and the common transmission problems with the automatic are known by everybody. Some other good examples are the newer Ford Focuses and Tesla Model X with all kinds of problems. I also had a safety recall on my car that was only discovered after 13 years! You take a gamble with a lemon no matter what.

Do you really expect two $10k cars to not last as long as one $25k car? How about four $5k cars? Many people on this forum drive their $5k cars for 5-10 years easy, maybe spending a couple hundred a month on maintenance worst case scenario. Good luck driving the same new car for 20-40 years. Don't forget that the new car will be a used car needing maintenance within a few years anyway. Unless you plan on buying a new car every 50k miles in which case I don't know what to tell you.

You can justify a new car many different ways, such as wanting all the new bells and whistles, but saving money is definitely not one of them.

Laura33

  • Magnum Stache
  • ******
  • Posts: 3479
  • Location: Mid-Atlantic
Re: Buying a brand new car?
« Reply #27 on: August 18, 2017, 07:12:57 AM »
Hi, I already read MMM articles on buying a brand new car. However, I'm still leaning towards doing it.
I don't want to buy something used and have it break down on me and have to junk it. I don't want to lose money buy buying a lemon.
Also I don't to lease for 3 years and then pay a high price to buy that car.
I'm moving from NY to Vegas and will need a car for work. I have money saved that I could put down on a car. I also have great credit.
I'm thinking of buying a brand new toyota rav4 for 20-23k. I would put 5k down and have monthly payments of $300-400 for 5 years.
I plan on keeping this car as long as possible.

Any advice? Can I still be a moustachian if I buy a brand new car?

Do you have a sufficient EF?
Do you have your 401(k) and IRA maxed?
Do you have all CC debt and student loans paid off?
Have you identified your target FIRE date, and is your savings rate sufficient to get you there?
Are you sufficiently protected from bad shit? (Health insurance, disability insurance, life insurance for any dependents who rely on your salary)

If you can answer all those questions "yes," then have at it -- at that point, it's play money.

If not, your money has a higher purpose than funding a shiny new toy.  Suck it up, buy what you can afford for cash, and keep yourself on track.

Cwadda

  • Handlebar Stache
  • *****
  • Posts: 2178
  • Age: 29
Re: Buying a brand new car?
« Reply #28 on: August 18, 2017, 07:21:17 AM »
Face punch for considering buying a brand new vehicle.

Second face punch for considering buying a brand new vehicle.

RWD

  • Walrus Stache
  • *******
  • Posts: 6529
  • Location: Arizona
Re: Buying a brand new car?
« Reply #29 on: August 18, 2017, 07:29:08 AM »
But what about having a warranty?
Used cars can have warranties too, nothing particularly special about new cars there. Either by buying a used car that is still under warranty (still relatively new) or by purchasing a separate warranty (e.g. CarMax's MaxCare). Though modern cars are so reliable that you won't really need one, especially since you're considering a Toyota.

ketchup

  • Magnum Stache
  • ******
  • Posts: 4323
  • Age: 33
Re: Buying a brand new car?
« Reply #30 on: August 18, 2017, 07:59:15 AM »
But what about having a warranty?
Used cars can have warranties too, nothing particularly special about new cars there. Either by buying a used car that is still under warranty (still relatively new) or by purchasing a separate warranty (e.g. CarMax's MaxCare). Though modern cars are so reliable that you won't really need one, especially since you're considering a Toyota.
Also, apart from incredibly major immediately-apparent fuckups, any modern vehicle will probably get past your typical warranty period (~60k) before stupid flaws emerge anyway.

My parents had a car with a Stupid Flaw.  It was a 2003 Saturn with a bad CVT (transmission).  It started acting up around 50k, and they sold it for peanuts around 100k when it was basically about to fail.  GM wouldn't do anything about it any step of the way, so they just got screwed (bought new).

I presently drive a 2001 Volvo.  It has a Stupid Flaw.  The Electronic Throttle Modules in these cars fail due to physical wear of the throttle position sensor inside.  Volvo will give you a new one installed on your car for $1000, but that will just eventually wear out again anyway.  Luckily, aftermarket parts exist that contain a "non-contact" throttle position sensor that won't wear out.  I replaced mine (and for way less than $1000) when it acted up (uneven idle, loss of power sometimes, etc) and now it runs like a dream.  The issue did not surface until around 145k miles.

Both of these issues are now well-documented.  When the cars were new, the issues were completely unknown.  If my parents had known that Saturn would have had that problem, they definitely would not have bought it.  I knew of the problem with my Volvo before I bought it (used), so I researched the problem extensively, and decided that since it had a demonstrably permanent repair option now available, I took the risk (and it did happen, but I was ready).

Optimiser

  • Pencil Stache
  • ****
  • Posts: 771
  • Age: 41
  • Location: PNW
Re: Buying a brand new car?
« Reply #31 on: August 18, 2017, 08:01:22 AM »
Warranties are a scam, they wouldn't sell them if they didn't expect to make more money off it than they'll have to pay out. 

I don't know if I'd go that far. It's more like prepaid repair insurance. Like any insurance company they expect to make a profit.

I do totally agree with you that they aren't worth it and you should self insure against future repairs and buy a lightly used reliable car.
« Last Edit: August 18, 2017, 08:02:55 AM by Optimiser »

Laura33

  • Magnum Stache
  • ******
  • Posts: 3479
  • Location: Mid-Atlantic
Re: Buying a brand new car?
« Reply #32 on: August 18, 2017, 08:37:36 AM »
But what about having a warranty?

I once bought a spanky new "entry-level luxury" car -- I was having my first kid, and all wheel drive! safety! reliability! sold me.  Even better:  not only did I have a 4-year warranty, I had all scheduled maintenance free!  What a deal!

What I didn't realize:  the only "scheduled" maintenace within the 48,000 warranty period was oil changes -- and the car had synthetic oil, so there were only about 3 of those.  And the only thing that went wrong with that car during the entire warranty period was a defective clutch -- which they refused to pay for, claiming "driver error" (my own mechanic said it was a faulty clutch, and he had been "certified" as a "master mechanic" for that make -- but they didn't listen to him).  Oh: and a busted tire from running over something in the road -- oops, road hazard. 

Tl;dr:  the things that are the most likely to break during the warranty period are also the most likely not to be covered by the warranty.  At least if you buy a used car, you can look at the repair history -- both for the model as a whole and for that individual vehicle -- and get a sense of what's in store and how well the owner cared for it.

Saving in Austin

  • Stubble
  • **
  • Posts: 192
Re: Buying a brand new car?
« Reply #33 on: August 18, 2017, 08:59:05 AM »
I bought a 2007 RAV4 with 78K miles in 2012 for $13K cash out the door with all taxes and fees paid.

I have been driving it for almost 5 years.

I'm not much of a DIY person and it has cost me $1,800 a year to have Midas keep the car running well.

I like the car for shopping and I hope to drive it for at least another 10-20 years.

I still ride my bike when I can.

solon

  • Handlebar Stache
  • *****
  • Posts: 2359
  • Age: 1823
  • Location: OH
Re: Buying a brand new car?
« Reply #34 on: August 18, 2017, 09:05:53 AM »
Do you even MMM?

You're not allowed to even look at a vehicle until it's 10 years old.

ketchup

  • Magnum Stache
  • ******
  • Posts: 4323
  • Age: 33
Re: Buying a brand new car?
« Reply #35 on: August 18, 2017, 09:25:20 AM »
Do you even MMM?

You're not allowed to even look at a vehicle until it's 10 years old.
OR an absurd amount of miles.  I bought an '09 Hyundai with 250,000 miles on it for $1000 as an experiment last year.  Unfortunately, it quit at 261,000 but I'd still come out ahead doing that every 11,000 miles vs buying a brand new $23,000 car.

nereo

  • Senior Mustachian
  • ********
  • Posts: 17499
  • Location: Just south of Canada
    • Here's how you can support science today:
Re: Buying a brand new car?
« Reply #36 on: August 18, 2017, 09:45:48 AM »
Do you even MMM?

You're not allowed to even look at a vehicle until it's 10 years old.
come now... let's not slide into hyperbole or extremism. We can all espouse the benefits of buying an older car, but jumping from a shiny new car to a decade+ old one is a chasm too wide for most to leap across until their frugality muscles have gotten truly huge.  And it's simply not something current new-car-shoppers will ever want.

Let's start with the 5 year old cars, most coming off-lease, many still looking new and still years away from their 100k birthday (roughly middle-aged). That - to me - is a fine place to start when shopping for a vehicle and building up your frugality (providing of course that the buyer lacks any sort of hair-on-fire debt emergency). This means 2012 models with ~60,000 miles on them. Craigslist of course, inspected by your own trusted mechanic.

MrSal

  • Pencil Stache
  • ****
  • Posts: 889
Re: Buying a brand new car?
« Reply #37 on: August 18, 2017, 10:05:20 AM »
Hi, I already read MMM articles on buying a brand new car. However, I'm still leaning towards doing it.
I don't want to buy something used and have it break down on me and have to junk it. I don't want to lose money buy buying a lemon.
Also I don't to lease for 3 years and then pay a high price to buy that car.
I'm moving from NY to Vegas and will need a car for work. I have money saved that I could put down on a car. I also have great credit.
I'm thinking of buying a brand new toyota rav4 for 20-23k. I would put 5k down and have monthly payments of $300-400 for 5 years.
I plan on keeping this car as long as possible.

Any advice? Can I still be a moustachian if I buy a brand new car?

This is so silly!

Used does not mean ready to go to junkyard... There are used cars in every price point! Used with 3000 miles... used with 10,000 miles... used with 40k miles and so on!

ALL OF THEM have something in common... much cheaper than brand new... heck, if you are so adamant on buying new! at least buy something in the 10-20k range. Its NEW but you will save about 30% ... heck, you''ll save even a lot for buying a 3000 mile car just because its not NEW ...

koshtra

  • Pencil Stache
  • ****
  • Posts: 664
  • Location: Portland, Oregon, USA
    • Mole
Re: Buying a brand new car?
« Reply #38 on: August 18, 2017, 10:16:37 AM »
I try to keep my car purchase cost to about $500 per year -- i.e. to buy (in today's dollars) a $6,000 car and drive it twelve years. The only way to do that with a new RAV4 would be to drive it for forty-plus years... at that point you'd be driving something a lot older and less reliable than I would ever drive :-)

NeonPegasus

  • Bristles
  • ***
  • Posts: 374
  • Location: Metro Atlanta, GA
    • Neon Pegasus
Re: Buying a brand new car?
« Reply #39 on: August 18, 2017, 10:21:15 AM »
A new car is a sucker's game. Even if you were going to spend the same amount of money, you'd be better off taking that same amount of money and buying a used car because the used car will have better things than the new car you could get with the same amount of money. For example, if you spend $10k on a new car, you'll end up with a piece of crap like my friend's Chevy econobox that had so many problems it's absurd. Or you could get a used mid grade sedan that was driven by someone like my FIL and it'll hold up wayyy better, even if it has 100k miles.

I bought a 3 year old certified '08 Highlander after my Altima was totaled. It was the oldest Highlander I could get at the time that had the safety features I wanted ('07 and earlier had significantly worse, though not egregious, ratings). I did have to finance it but had it paid off within a six months. From here on out, it's cash only. Anyway, it had under 30k miles then and now has around 117k miles and I've yet to need any significant repairs. I've had it for 6 years and plan to drive it another 6 years. Then my oldest will be 16 and she'll be able to buy it from me. :)  Or if she wants to buy something smaller, I'll just keep on driving Shirley.

elduderino

  • 5 O'Clock Shadow
  • *
  • Posts: 13
Re: Buying a brand new car?
« Reply #40 on: August 18, 2017, 11:53:06 AM »
Ok. So if I'm buying off of Craigslist, I need to bring it to a mechanic to check it out. What else should I know? Don't want to get scammed.

MrSal

  • Pencil Stache
  • ****
  • Posts: 889
Re: Buying a brand new car?
« Reply #41 on: August 18, 2017, 12:17:48 PM »
Ok. So if I'm buying off of Craigslist, I need to bring it to a mechanic to check it out. What else should I know? Don't want to get scammed.


What I do when buying used is... Sign up for CarFax ... then whenever I am checking ads on CL or other website I run the VIN ... if there is something dodgy regarding miles inconsistency or severe accidents I don't even lose my time checking it out. Out of the ones I go check out that have been already filtered then sure enough bring your mechanic or something...

nereo

  • Senior Mustachian
  • ********
  • Posts: 17499
  • Location: Just south of Canada
    • Here's how you can support science today:
Re: Buying a brand new car?
« Reply #42 on: August 18, 2017, 12:23:09 PM »
Ok. So if I'm buying off of Craigslist, I need to bring it to a mechanic to check it out. What else should I know? Don't want to get scammed.
1) First of course is having a mechanic you trust - virtually all will have some sort of 'vehicle inspection routine'.  Tell them ahead of time so you have a standing appointment.

2) Do a VIN search, which will tell you about any major rebuilds, accidents and conflicts with the title.  This is free.  CarFax will do something similar for a small fee.

3) Know the acceptable price-range for a vehicle by searching similar models and checking KBB. Somtimes prices drift higher/lower from KBB so be aware.

4) be upfront with the seller - tell him/her your purchase is dependent on the mechanical inspection, and should that turn up anything you can haggle (e.g. "cover 50% of the repair cost for new struts and it's a deal")

5) have your payment ready. Sellers will take cash in hand over a promise to pay maybe slightly more next tuesday.  It also allows you to swoop up deals (example: i bought my last car from a vet who was being deployed and was willing to take a hit to sell quickly).

6) be safe - meet in a public parking lot and consider bringing a friend. I was told by a police officer once to take a photo of the person right at the start (and let them do the same) to build trust... common thieves won't want you to have a picture of them.

it's really quite easy - mostly common sense stuff.  For those thinking they'd rather buy from a dealership I'd argue that unlike private sellers dealerships actually exist to exploit you with car sales - most everyday people just want a fair price and no stress.

Optimiser

  • Pencil Stache
  • ****
  • Posts: 771
  • Age: 41
  • Location: PNW
Re: Buying a brand new car?
« Reply #43 on: August 18, 2017, 12:24:46 PM »
Ok. So if I'm buying off of Craigslist, I need to bring it to a mechanic to check it out. What else should I know? Don't want to get scammed.
You don't have to bring the mechanic with you, though if you have a mechanically inclined friend it isn't a bad idea to bring them along. You just need to make sure the seller will let you get a pre-purchase inspection at a mechanics shop.

I like to also ask the seller for all of their service records for the car. A good seller will have a folder full of receipts for all of the regular maintenance that was performed on the car. If you are buying a new-ish car there probably won't be many. I bought my current car when it was 18 years old, and looking through that folder gave me confidence that the seller had not neglected anything on the car.

Samuel

  • Pencil Stache
  • ****
  • Posts: 771
  • Location: the slippery slope
Re: Buying a brand new car?
« Reply #44 on: August 18, 2017, 12:32:18 PM »
Getting a deal on a good used car takes more time and effort than buying new from a dealership. With used cars being so good now I think buying new is more about avoiding effort than gaining reliability. You're paying for convenience, which doesn't seem very badass.


https://lasvegas.craigslist.org/cto/d/manual-elantra-gt-2013-white/6245341573.html

not cheap, but will give trouble free driving (and it's a stick shift!)

Pictures of odometer include the temperature: 117 degrees. No thank you, Vegas.


nereo

  • Senior Mustachian
  • ********
  • Posts: 17499
  • Location: Just south of Canada
    • Here's how you can support science today:
Re: Buying a brand new car?
« Reply #45 on: August 18, 2017, 12:33:48 PM »
Ok. So if I'm buying off of Craigslist, I need to bring it to a mechanic to check it out. What else should I know? Don't want to get scammed.
You don't have to bring the mechanic with you, though if you have a mechanically inclined friend it isn't a bad idea to bring them along. You just need to make sure the seller will let you get a pre-purchase inspection at a mechanics shop.

Exactly. If a seller won't agree to let you take the car to your nearby mechanic it's time to move on.
FWIW, it's expected that YOU, the buyer, will pay the inspection fee. IME it's normally about $50-75 at most shops*.
If any issues turn up you can ask that the seller either address them or reduce their price accordingly.

*some shops will waive this fee  if there is work that needs to be done and you pay them to do it, since they've essentially already done the diagnosis part of the repair. Just ask them "if I do the repair here will you knock the inspection fee off the labor?"

re: reciepts - yeah organized car owners will have a binder-full. But I wouldn't discredit a seller who kept less than detailed records.  Some people just don't keep a papertrail that long (myself included).

nereo

  • Senior Mustachian
  • ********
  • Posts: 17499
  • Location: Just south of Canada
    • Here's how you can support science today:
Re: Buying a brand new car?
« Reply #46 on: August 18, 2017, 12:35:02 PM »
Pictures of odometer include the temperature: 117 degrees. No thank you, Vegas.

Are you saying you wouldn't buy a car FROM Vegas, or that you just don't want to BE in Vegas. 

MrsPete

  • Magnum Stache
  • ******
  • Posts: 3505
Re: Buying a brand new car?
« Reply #47 on: August 18, 2017, 03:19:05 PM »
Hi, I already read MMM articles on buying a brand new car. However, I'm still leaning towards doing it.
I bought my last car new, and it was a good choice.  It cost just under $20,000, and I paid cash.  In two months I will have been driving it for a decade.  The mileage is sky-high, but I have maintained it religiously, and I know for absolute fact it has never been wrecked or abused.  When it was still new, I purchased the lifetime alignment and lifetime brakes, and I have those items checked several times a year (I opted to buy these services from Firestone, making it very convenient to drop the car off and run errands).  I expect this car has another five years of life in it ... but I'm going to get a new car soon, and this one will go to my college daughter, who is about to begin an internship and needs something more dependable than the old 1990 rat-trap she's driving. 

I'm going to buy new again.  Again, I can pay cash, and I am choosing an inexpensive model (inexpensive for a car).  It's a system that's been working for me my whole adult life. 

I love this, I don't want to lose money, but a I am going to throw away 3-400 a month for 5 years to a depreciating asset. 
All of the interest you pay will be lost money.
I would never pay interest for a car.  I'd pick up a second job, sell something, wait 'til I could afford it. 

Hargrove

  • Pencil Stache
  • ****
  • Posts: 737
Re: Buying a brand new car?
« Reply #48 on: August 18, 2017, 04:04:06 PM »
I bought an Accent used with 11k miles on it and knocked roughly 2k off the price of the new car (which was just a little under 20%). You can bet I did not care at all that there were 11k miles on it. If anything, it proved nothing was immediately faulty.

I have driven it almost 70k miles since then and, perhaps overcautiously, maintained the warranty because the car is necessary for work. I have had no problem whatsoever. I actually can point out the tires on this thing are hilariously cheap because tiny (I have to drive a LOT).

The warranty is set up so scheduled oil changes are free and more complicated (read: hilariously expensive) checkups are 120-180, meaning $75 oil changes at the dealership averaged over maintenance ticks.

Do your own oil changes and get a few maintenance things done at Valvoline occasionally and you save $60+ every maintenance tick, then $300-500 every major maintenance tick. Basically, you likely have 3 or 4 years to set aside money, and if you only set aside what you save, you would have around 4k before anything likely broke on the car, leaving you up the savings of buying used and compounding your maintenance fund while it waited for something to break. If nothing broke, you'd be up 6k+. If something broke, it's comically unlikely you'd be down against buying new.

Know what you're getting if you get a car loan. A car loan of 10-15k with 1.49% interest is probably a great idea. With a $600 origination fee...? Actually still pretty cheap money, but read the fine print.
« Last Edit: August 18, 2017, 04:06:58 PM by Hargrove »

libertarian4321

  • Handlebar Stache
  • *****
  • Posts: 1395
Re: Buying a brand new car?
« Reply #49 on: August 18, 2017, 05:34:19 PM »
There are certain things I won't buy used, even if it will save money.

Underwear and cars are among them.