Author Topic: Buying a new(or used) car, please advise!  (Read 7459 times)

superone!

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Buying a new(or used) car, please advise!
« on: January 02, 2015, 05:33:53 PM »

Hi Mustachians!
Disclaimer: There will be some anti-mustachian things in this post.

I am considering buying a new (or used) car. With a loan (eek!). For the first time in my life.

I currently drive an (awesome) 1977 Mercedes 240 Diesel with under 115,000 miles on it. It is a great car and in great condition. BUT: In July I accepted a new job that means I now drive 60+ miles per day for my commute--previously I was biking 12 miles (round trip) to work. There are some reasons (partner's job) that we cannot move closer to my new job and won't be able to for a few years. I now find myself in the position of driving down the collector value of my beautiful classic car by driving it all the time. If I'm being honest with myself, it is also less than ideal to spend 3+ hours a day (Los Angeles traffic!) in a 38 year old car in which the springs are sticking into my butt and a very fuzzy radio. (The new job however, is absolutely worth the commute.)

Back to my car issue:
Initially I was planning to save up about $8,000 and buy a used Prius or similar commuter car with good MPG. I'm finding, however, that the only Priuses I can get for that in the LA area are loaded down with miles--like over 200,000. I'd like whatever car I buy to last at least the next 10 years, ideally longer.

I realized that through my family, I have access to the Ford A/Z pricing plan if I purchase a new vehicle from Ford. This reduces the price of the car to very close to cost, from what I understand. I'm now thinking about purchasing a new (*gasp*) base model of the Ford Fiesta. I don't have the cash to buy it outright, and my current car is worth much more on the private market than as a trade in, but I am daily watching my classic car's value depreciate. My plan would be to put about $5,000 down and take out a loan for the rest, not quite 10,000 including taxes and fees and all of that (I'm estimating, possibly overestimating). I'd then sell my current car and throw that money at the loan, reducing the outstanding loan amount to about $5000, which I should be able to pay off within 6/8 months.

A couple things:
One reason I am seriously considering a loan is help to rebuild my credit. In 2007 I made the disastrous-for-credit-score decision to close out all of my credit cards. (I didn't want to part of the debt system. I still don't want to be, but I've come to realize that it is more of a necessary evil...) Good news: no credit card debt, bad news, terrible credit score and about 20,000 in student loans.... My credit score is around 650.

Questions:

1) Anyone have any experience with the Ford A/Z pricing plan? How much of a discount is it? Enough to make buying a depreciating asset new worthwhile? The base model I'm looking at is about $14,000, I'm hoping and wishing that the Z plan would get it under 10,000, but is that too wishful?

2) Anyone with a newish Ford Fiesta out there? How do you like it?

3) Do I need a facepunch or a reality check? Should I be buying a $7,000 Nissan Versa for cash instead? Should I just be sticking with my Mercedes?




alsoknownasDean

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Re: Buying a new(or used) car, please advise!
« Reply #1 on: January 02, 2015, 08:03:17 PM »
What would you do if you were paying cash? Would you buy the new Fiesta or the used Versa?

If you wouldn't buy the new Fiesta with cash, then why buy it with finance?

Do Ford have any cheaper ex-demo models (especially 2014's now that it's 2015). Might be worth looking into ex-demonstrators or last year's stock for a bit of a discount.

Spiliph

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Re: Buying a new(or used) car, please advise!
« Reply #2 on: January 02, 2015, 09:39:56 PM »
If you plan to pay down the debt in 6 to 8 months then I don't see anything wrong with financing. The only thing to consider is the money that lose by buying a new car. If you intend keeping the car 10+ years then that is too moot.

DeltaBond

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Re: Buying a new(or used) car, please advise!
« Reply #3 on: January 03, 2015, 05:24:04 AM »
DUDE, I WANT THAT BENZ!  Are you selling it and do you live anywhere near Nashville, TN?  Honestly, you would be fine keeping that car, is it a 123 engine?  See, that is the car I'm shopping for to have a reliable 3rd car, when we already have a 1985 Benz 300TD.  Only 300K miles on ours, so it has quite a ways to go before its done. 

Why not a newer Benz, mid 80s or something? 

Retired To Win

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Re: Buying a new(or used) car, please advise!
« Reply #4 on: January 03, 2015, 06:34:16 AM »
In your position, I would without question buy the used Nissan Versa for $7000 cash, which appears to be the least-cost alternative that you are considering.  And I would then take the money not spent on having reliable transportation and put it towards reaching financial independence.

In my experience, older cars can give remarkably good and reliable service for a long, long time if properly maintained.  I drive a 1996 Dodge Dakota with over 140,000 miles on it.  My wife puts me to shame with her 1998 Subaru Forester that she has already happily driven over 240,000 miles.

Keep your transportation costs down and you will be shortening your journey to financial independence by a LOT!

DeltaBond

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Re: Buying a new(or used) car, please advise!
« Reply #5 on: January 03, 2015, 06:40:28 AM »
Woops, you're in LA, I got all excited and forgot that part.  Before you choose any car you can buy with your cash... pay $7 for a month of the online consumer reports website and check out the cars you're pondering.

HawkeyeJD

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Re: Buying a new(or used) car, please advise!
« Reply #6 on: January 03, 2015, 07:47:50 AM »

Hi Mustachians!

...If I'm being honest with myself, it is also less than ideal to spend 3+ hours a day (Los Angeles traffic!)

Back to my car issue:
Initially I was planning to save up about $8,000 and buy a used Prius or similar commuter car with good MPG.

The only Priuses I can get for that in the LA area are loaded down with miles--like over 200,000. I'd like whatever car I buy to last at least the next 10 years, ideally longer.

This reduces the price of the car to very close to cost, from what I understand. I'm now thinking about purchasing a new (*gasp*) base model of the Ford Fiesta.

I'd then sell my current car and throw that money at the loan, reducing the outstanding loan amount to about $5000, which I should be able to pay off within 6/8 months.

A couple things:
One reason I am seriously considering a loan is help to rebuild my credit.

Questions:

3) Do I need a facepunch or a reality check? Should I be buying a $7,000 Nissan Versa for cash instead? Should I just be sticking with my Mercedes?

Going in order of some of the things that jumped out at me from your post:

1. I would find a 3+ hour commute to probably be one of the worst things on this planet that I can imagine doing 5 of 7 days a week.  I would literally turn down a $100,000 raise to avoid that.  Holy crap, I just hope that you really know how you will feel about this commute (do you do it now, have you done it before?) because it sounds freaking awful to me anyways. 

2.  Your sentiment to save up cash and buy a car is a good sentiment.

3. Do not buy a Prius with 200,000 miles on it.  Your other options, even taking a loan, seem much better to me.  You are going to be putting a ton of miles on this commuter car and it is just a fact that after 150,000 or so miles you will just start running into problem after problem on most cars.  You might get lucky or you might not but you are certainly tempting fate in my opinion here. 

4. There is nothing wrong with buying a base model new car and driving the crap out of it for a long time.  Time is the big differentiator as to whether a car purchase was a good “value.”  Eventually, unless a car is a collectable, it will eventually be worthless and sold for scrap.  If you drive it that entire time, you will get a good value out of your purchase either new or used.  I think one other key point here is also avoid all the frilly crap the cars can come with, so sticking to a base type model is a good way to avoid at least wasting money.   

5. As to your “family pricing” or whatever, you need to comparison shop with the program and with dealers and find the best price that way.  I used USAA’s car buying service last time for a car purchase at one dealer and then negotiated with two other dealers for the exact same SUV, and was able to get better prices out of the other dealers than was advertised on the USAA car buying service.  So, do not assume the program is truly the best deal out there, do your homework!

5. As to how to pay for the car I think you are doing it backwards.  You say you can get a loan, buy the new or new to you car, then sell your collectable car and use the money to pay off part of the loan, then spend 6 to 8 months paying down the loan.  This tells me that you do not actually need the loan.  I understand that you might need the loan to bridge you between the new car until you are able to sell the old car, so that is fine, BUT you should save the 6 to 8 months of payments BEFORE you sign for the new car loan.  That way your initial loan will be lower, and as soon as you sell your other car, you can turn around and pay that loan off.  This avoids getting in the mindset of “well I’ll just get a loan since I can pay it off in 8 months” because that is the type of thinking that the collection of even more debt over time (trust me I know about this!).  To avoid getting on this cycle you really need to be of the mindset that loans should be for near emergencies and that you need to save save save before major purchases.  The added benefit here is this:  When I bought our last SUV we got a loan.  I don’t need a 2nd car right now but if the time comes I will pay cash for what I can afford at the time.  I can’t stress, at least for me, how much more tangible $15,000 in cash coming out of my checking account feels relative to the relative “free money” feeling of financing things.  This really does keep me from doing/buying big ticket items I don’t need. 

6.  DO NOT GET A LOAN BECAUSE OF YOUR CREDIT SCORE!  With only a few exceptions, such as perhaps buying a house in the NEAR future, you should not pay someone else interest for the privilege of maybe raising your credit score.  Put it this way, if you vow never to borrow money for things (with the exception of a mortgage) why do you care about your credit score?  In addition, the game is rigged.  Don’t have much credit history but never defaulted or had a late payment etc then you will have a low credit score.   Go get a TON of debt on a bunch of credit cards, houses, crap you don’t need, and live a lifestyle that is one paycheck from ruin, and guess what, you will have a good credit score (until the day comes that the last paycheck does not come in)! I owe on the order of $600,000 in debt between my mortgage, federal student loans, and our SUV loan (in that order, 90% of the debt is mortgage debt) and guess what? I have great credit.  I’m a proven sucker!  Anyways, just get this thought out of your head.  If you REALLY need your credit to go up say to buy a house soon and want to get a better rate come back and make a post there are other much less costly ways to accomplish the same thing!

7.  You don’t need a facepunch or reality check but just make sure you make your decision based on the goal to be accomplished (transportation) for the least long term cost and avoid getting distracted by things like helping your credit score and other silly factors.   And, if I had a vote, I’d probably buy the new base fiesta (excellent reviews, great gas mileage, appears no major maintenance issues if you believe Edmunds) with the expectation of driving it into a scrap heap.  At least this way you should expect the first 100,000 to 150,000 miles to be free of most major maintenance issues while you build up a larger cash reserve.


FeynmanFan

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Re: Buying a new(or used) car, please advise!
« Reply #7 on: January 03, 2015, 08:30:28 AM »
I'm 51 years old.

I've only owned three cars my entire life. I commute daily to a professional/white collar job, and have done so for circa 30 years.

Of those three cars, only one was purchased new -- a 2001 Toyota 4-Runner that now has 160,000 miles on it. I intend to drive the 4-Runner until the day I die and thereafter be buried in it. I purchased that vehicle because at the time I suspected it was a great value -- to wit, it was one of the final models to be made in Japan vice the United States, which then was an indicator of value. My initial assessment of the car's value luckily turned out to be correct.

Bottom line:

(1) Only buy a new car if it is a great value and you intend to drive it for a decade or more. As a general rule, new cars are a terrible waste of money.

(2) Unless (1) above applies, purchase a reliable used car.

(3) Cars are expensive modes of transport. That's all they are.

Exhale

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Re: Buying a new(or used) car, please advise!
« Reply #8 on: January 03, 2015, 09:05:24 AM »
If you intend keeping the car 10+ years then that is too moot.

Okay, stupid car question here.

Can buying a new car can be a viable option if:
1) You intend to keep it forever
2) Can buy it without loans

HawkeyeJD

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Re: Buying a new(or used) car, please advise!
« Reply #9 on: January 03, 2015, 09:41:07 AM »
If you intend keeping the car 10+ years then that is too moot.

Okay, stupid car question here.

Can buying a new car can be a viable option if:
1) You intend to keep it forever
2) Can buy it without loans

It certainly can be, but as with all things, it depends on the specifics of each car.

You need a few pieces of information to decide whether a new or used car is a better way to go: the price of a new car all in, the price of the comparable used car all in, the mileage of the used car, and the projected life of both cars. 

Example #1 (from a friend looking at cars right now): 

a. 2015 VW Passat SE V6 - new all in price of $33,000.  Zero miles.  Expected moderate costs of repairs over the life of the car.  Estimated remaining life of the car 150,000 miles. 

b.  2012 VW Passat SE V6 - used all in price $19,500 all in. 40k miles.  Expected moderate costs of repairs over the life of the car.  Estimated remaining life of the car is 110,000 miles (150,000 for new minus 40k miles).
 
So in this comparison, you can do a "cost per mile" to compare the relative value of the cars (All in price/number of useable miles in the car).  In the above example option a. costs you 22 cents per mile over its useable life.  Option b. costs you 18 cents per mile over its useable life.  This is simplified since most of the variables are controlled (like gas mileage and expected usable life) but the rough idea how to go about it.  In addition, in this instance the 2012 used is a better value because the cars deprciate real aggressively the first few years. 

Example 2:

a. 2015 Honda Accord lx - new all in price $$21,000.  Expected low costs of repairs over life of car. Expected 200,000 miles remaining useable life.   

b. 2012 Honda Accord LX - used all in price $13,600- 46k miles.  Expected low costs of maintenance over life of car.  Expected 156,000 miles remaining useable life. 

So in this case option a. runs 10.5 cents per mile and option b. runs about 8.7 cents per mile.  So, in the VW example the difference between the cars was 4 cents per mile while with the Honda here the difference is just 1.8 cents per mile difference. 

Example 3:

a. 2015 honda odyssey minivan LX - all in price of $26970.  expected low cost of repairs over life of car.  Expected 200,000 miles useable life.

b. 2012 honda odyssey minivan LX - all in price of $22,500. 33k miles on it.  expected low cost of repairs over life of car.  expected 167,000 miles of useable life. 

Option a. 13.4 cents per mile and option b. 13.4 cents per mile.  Basically the same cost here, so why not buy the new one in this comparison and at least get the 3 years of warranty?  You will see this happen if you compare Honda CRVs right now as well, the resale is so high on the used ones that for many it will be an equal or better deal, given incentives, to just buy the new one. 
 


superone!

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Re: Buying a new(or used) car, please advise!
« Reply #10 on: January 03, 2015, 09:50:27 AM »
Thank you all for your replies!!

@HawkeyeJD - Great thoughts here. I agree that I am kind of doing the payment thing backwards, but the reason I want to stop driving my collectable car now is that in another 6-8 months I will have close to 150,000 miles on my car, which greatly depreciates its collector value (though it will run for 500,000+ miles, Mercedes 123s are great cars.) The point here would be to get the newer car up front and sell the Mercedes while it is still worth more. Now I can probably get $5,000 for it, if it had over 150k miles I'd be lucky to get closer to $4,000 -- This has to do with the insurability and restoration classic car market. So, I was looking at the 6-8 month loan as cheaper (less than $1000) than the cost of depreciation if I drive my car for that extra time.

Also the 3 hour commute sucks, but the job is amazing. Not for the money, though it is almost twice what I was making before) but because I actually love what I do every day. The commute won't be forever, but it will be for a few years....

HawkeyeJD

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Re: Buying a new(or used) car, please advise!
« Reply #11 on: January 03, 2015, 11:36:19 AM »
Thank you all for your replies!!

@HawkeyeJD - Great thoughts here. I agree that I am kind of doing the payment thing backwards, but the reason I want to stop driving my collectable car now is that in another 6-8 months I will have close to 150,000 miles on my car, which greatly depreciates its collector value (though it will run for 500,000+ miles, Mercedes 123s are great cars.) The point here would be to get the newer car up front and sell the Mercedes while it is still worth more. Now I can probably get $5,000 for it, if it had over 150k miles I'd be lucky to get closer to $4,000 -- This has to do with the insurability and restoration classic car market. So, I was looking at the 6-8 month loan as cheaper (less than $1000) than the cost of depreciation if I drive my car for that extra time.

Also the 3 hour commute sucks, but the job is amazing. Not for the money, though it is almost twice what I was making before) but because I actually love what I do every day. The commute won't be forever, but it will be for a few years....

If there is a "line in the sand" over 150k where you would be giving up $1k (i.e. 149,999 to 150,000 is litearlly 1k just gone in value) then that should be considered.  One thing you might do is get a loan calculator online and see how much interest you will pay on your car loan over 6 to 8 months.  If you finance $10,000 at 2% over 8 months you will pay about $75 in interest.  If the rate is 6% you pay $226 or so in interest. 

So, in these scenarios I would take the $1k savings and pay the $75 to $226 in interest.  Just have to make sure the "8 month loan" does not turn into a 36 month loan and the interest ends up being more than the savings from your older car.  Then, once the loan is paid off, start building up a small fund to eventually replace the car.  Doing something like $25 or $50 a week into a high interest savings account (or investing it in a way you like) with the notion that fund will pay for repairs and replacement 10 years from now will make the next time quite easy to buy what you need without having to worry about the loan.   


Also be sure that you can get a true value, after negotiation, for your car.     


My caveat here is that I would make very sure that you can sell your car for what you think you can get it after negotiations and such just to lay it out as much as possible. 
« Last Edit: January 03, 2015, 11:39:01 AM by HawkeyeJD »

dhlogic

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Re: Buying a new(or used) car, please advise!
« Reply #12 on: January 03, 2015, 11:46:45 AM »
Thank you all for your replies!!

@HawkeyeJD - Great thoughts here. I agree that I am kind of doing the payment thing backwards, but the reason I want to stop driving my collectable car now is that in another 6-8 months I will have close to 150,000 miles on my car, which greatly depreciates its collector value (though it will run for 500,000+ miles, Mercedes 123s are great cars.) The point here would be to get the newer car up front and sell the Mercedes while it is still worth more.

Why spend $7000+ to save $1000?

Its like when the cable company offers me savings if I bundle cable, internet, and phone for $100+ when I currently only have internet and paying well under $100. I ask them how is $130 a month considered a savings compared to the $50 I currently pay. They have no answer to this.

Cassie

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Re: Buying a new(or used) car, please advise!
« Reply #13 on: January 03, 2015, 02:12:31 PM »
Years ago the car company my hubby worked for allowed employees to buy cars at cost instead of giving them a raise. We actually bought 2 within 2 years but we bought very base models & drove them until they died so it was a good choice for us.

Returnoftheyeti

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Re: Buying a new(or used) car, please advise!
« Reply #14 on: January 03, 2015, 02:57:11 PM »
I bought my new car using a GM discount. All in all, it does not make that much of a difference. The dealer is going to get to a price, one way or the other. The "discount" is just a "feel good" slightly used or CPO cars are still cheaper, and still a better deal.

Think of it this way.  When they offer 0% financing on a 25k car, you don't get any discounts.  Or you can get the same car for 21k but pay 3% interest.

You have to decide what is a better deal.

Also, with a new car you pay tax on the amount before any rebates, this is usually a lot of money. 
« Last Edit: January 03, 2015, 05:52:43 PM by Returnoftheyeti »

DeltaBond

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Re: Buying a new(or used) car, please advise!
« Reply #15 on: January 03, 2015, 03:06:11 PM »
What's the new job?

superone!

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Re: Buying a new(or used) car, please advise!
« Reply #16 on: January 03, 2015, 07:12:31 PM »
@ dhlogic:
Why spend $7000+ to save $1000? -- I'm not totally sure I follow your logic. The $7000 nissan I was looking at had over 100,000 miles on it. I'd be spending the extra money to get a new car with no issues that I can drive into the ground.

The Ford employee plan (for Ford engineers/designers, not from a Ford dealership) basically gives you the car at cost--which works out to about a 30% savings over the sticker price from what I understand. So if the MSRP is about $15k, I'd be looking at paying $10.5k, plus whatever interest I'd need in the 6-8 month loan. I think it is probably a pretty good deal -- So I'm looking at paying an extra $3500 to get a new car instead of one with 100k miles on it.

@Cassie and Returnoftheyeti and others!
Thanks for your insights!

@DeltaBond
I'm an anthropologist. I landed an applied job in my field, which is tricky to do. Before this I was doing very boring data analysis at a fire department. The new job is a big win and a lot of fun and makes me very happy to go to work every day.

alsoknownasDean

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Re: Buying a new(or used) car, please advise!
« Reply #17 on: January 03, 2015, 07:38:10 PM »
A base model commuter hatchback like a Fiesta, purchased at a discount, for someone who's doing big miles? My guess is you'll be doing 20,000+ miles a year, right?

If it was a $40K SUV that got 15MPG, I'd suggest to run away. For the Fiesta, whilst I'm sure you could get a very decent used car with plenty of life left in it for less than half that, buying said Fiesta and owning for a long period of time isn't a terrible move.

dhlogic

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Re: Buying a new(or used) car, please advise!
« Reply #18 on: January 03, 2015, 07:46:56 PM »
@ dhlogic:
Why spend $7000+ to save $1000? -- I'm not totally sure I follow your logic. The $7000 nissan I was looking at had over 100,000 miles on it. I'd be spending the extra money to get a new car with no issues that I can drive into the ground.

You don't want to drive your Mercedes because it will lower its value, but you'll spend several times more to prevent that from happening.

I did notice that you didn't care for its radio performance or seating comfort, but you seem to like everything else about it? You could most likely correct those deficiencies by spending only a fraction of $7,000.
« Last Edit: January 03, 2015, 07:50:28 PM by dhlogic »

Exhale

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Re: Buying a new(or used) car, please advise!
« Reply #19 on: January 04, 2015, 09:30:02 PM »
If you intend keeping the car 10+ years then that is too moot.

Okay, stupid car question here.

Can buying a new car can be a viable option if:
1) You intend to keep it forever
2) Can buy it without loans

It certainly can be, but as with all things, it depends on the specifics of each car.

You need a few pieces of information to decide whether a new or used car is a better way to go: the price of a new car all in, the price of the comparable used car all in, the mileage of the used car, and the projected life of both cars. 

Example #1 (from a friend looking at cars right now): 

a. 2015 VW Passat SE V6 - new all in price of $33,000.  Zero miles.  Expected moderate costs of repairs over the life of the car.  Estimated remaining life of the car 150,000 miles. 

b.  2012 VW Passat SE V6 - used all in price $19,500 all in. 40k miles.  Expected moderate costs of repairs over the life of the car.  Estimated remaining life of the car is 110,000 miles (150,000 for new minus 40k miles).
 
So in this comparison, you can do a "cost per mile" to compare the relative value of the cars (All in price/number of useable miles in the car).  In the above example option a. costs you 22 cents per mile over its useable life.  Option b. costs you 18 cents per mile over its useable life.  This is simplified since most of the variables are controlled (like gas mileage and expected usable life) but the rough idea how to go about it.  In addition, in this instance the 2012 used is a better value because the cars deprciate real aggressively the first few years. 

Example 2:

a. 2015 Honda Accord lx - new all in price $$21,000.  Expected low costs of repairs over life of car. Expected 200,000 miles remaining useable life.   

b. 2012 Honda Accord LX - used all in price $13,600- 46k miles.  Expected low costs of maintenance over life of car.  Expected 156,000 miles remaining useable life. 

So in this case option a. runs 10.5 cents per mile and option b. runs about 8.7 cents per mile.  So, in the VW example the difference between the cars was 4 cents per mile while with the Honda here the difference is just 1.8 cents per mile difference. 

Example 3:

a. 2015 honda odyssey minivan LX - all in price of $26970.  expected low cost of repairs over life of car.  Expected 200,000 miles useable life.

b. 2012 honda odyssey minivan LX - all in price of $22,500. 33k miles on it.  expected low cost of repairs over life of car.  expected 167,000 miles of useable life. 

Option a. 13.4 cents per mile and option b. 13.4 cents per mile.  Basically the same cost here, so why not buy the new one in this comparison and at least get the 3 years of warranty?  You will see this happen if you compare Honda CRVs right now as well, the resale is so high on the used ones that for many it will be an equal or better deal, given incentives, to just buy the new one. 
 

Thank you HawkeyeJD for taking the time to reply and give detailed examples. How you describe it makes lots of sense. In fact, I'm just going to copy your post and use it as my cheat sheet when the time comes to make this decision. (Hopefully not for some years if I can stay sufficiently badass!)


superone!

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Re: Buying a new(or used) car, please advise!
« Reply #20 on: January 09, 2015, 12:01:50 AM »
@ dhlogic:
Why spend $7000+ to save $1000? -- I'm not totally sure I follow your logic. The $7000 nissan I was looking at had over 100,000 miles on it. I'd be spending the extra money to get a new car with no issues that I can drive into the ground.

You don't want to drive your Mercedes because it will lower its value, but you'll spend several times more to prevent that from happening.

I did notice that you didn't care for its radio performance or seating comfort, but you seem to like everything else about it? You could most likely correct those deficiencies by spending only a fraction of $7,000.

Well, I was perhaps oversimplifying. I love my mercedes *theoretically* but it is a lot less practical now that I'm driving so much. As a diesel it also has a loud engine and a lot of road noise (part of the issue of the lack of radio) and I don't have the needed pickup to drive in rush-hour traffic on LA freeways. The car was perfect for me when I drove only for pleasure on the weekends--but really these aren't things that can easily be "fixed". I also wouldn't want to fix them. I think the car is great as is; it just isn't the right kind of car for the kind of work I need it to do. I'm reluctant to get rid of it more out of sentimentality and (probably misplaced) "coolness" than anything else. I love the car--and a Ford Fiesta is booooring--but way more practical (if more expensive) for my transportation needs.

lr

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Re: Buying a new(or used) car, please advise!
« Reply #21 on: January 09, 2015, 06:35:28 AM »
Face punch!

Don't buy a new gas car when there are so many options for used cars that have the depreciation hit. Consider a rental car, for example. They don't get beat up as much as people think (which makes them cheaper than they deserve) and the companies cycle them out quickly, so they're usually low mileage. When I bought from Hertz, they let me rent the car first for a week to check it out, then apply the fee towards the purchase.

neo von retorch

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Re: Buying a new(or used) car, please advise!
« Reply #22 on: January 09, 2015, 08:19:02 AM »
I don't know how different the LA car market is but around here (Phi, PA) you can find a (boring) Versa that's a few years old but practically new. One example was $8,900
and 34,550 mi. In the Cost Per Mile example, that's just $0.061 / mile assuming 180k life, compared to $0.077 for the new Fiesta if it goes to 180k. That's a 26% increase in costs!

On the flip side, I've seen the Fiesta ST dip below $16k with only 20k on it - if it gets closer to $14k with similarly low mileage, I may bite. It's not the absolute least expensive option, but it's still a relatively efficient, practical hatchback that also happens to be a very fun driver's car.

ysette9

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Re: Buying a new(or used) car, please advise!
« Reply #23 on: January 09, 2015, 10:40:52 AM »
I may be disagreeing with others here, but my experience having a Fiesta as a rental car was that it SUCKED. Slow, not responsive, poor handling - just a lousy thing to drive. I have been very pleasantly surprised by the Ford Focus however. I don't know about pricing but they are very similar cars in terms of size/design.

Le Barbu

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Re: Buying a new(or used) car, please advise!
« Reply #24 on: January 09, 2015, 11:23:32 AM »
In your position, I would without question buy the used Nissan Versa for $7000 cash, which appears to be the least-cost alternative that you are considering.  And I would then take the money not spent on having reliable transportation and put it towards reaching financial independence.

In my experience, older cars can give remarkably good and reliable service for a long, long time if properly maintained.  I drive a 1996 Dodge Dakota with over 140,000 miles on it.  My wife puts me to shame with her 1998 Subaru Forester that she has already happily driven over 240,000 miles.

Keep your transportation costs down and you will be shortening your journey to financial independence by a LOT!

definetly that!

RelaxedGal

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Re: Buying a new(or used) car, please advise!
« Reply #25 on: January 09, 2015, 12:33:20 PM »
1) Anyone have any experience with the Ford A/Z pricing plan? How much of a discount is it? Enough to make buying a depreciating asset new worthwhile? The base model I'm looking at is about $14,000, I'm hoping and wishing that the Z plan would get it under 10,000, but is that too wishful?

Get your access pin from your family member.  That will get you in to the website where you can configure a car with all the bells and whistles you do or don't want.  My Mother-in-law set me up in May when I was thinking of replacing my car.  That will give you the bottom line price rather than fuzzy numbers.  And no, I don't think you'll get down to $10K, I think the Fiesta has such a small margin you'll only save $350 or so, but at least it's a no haggle price.  When I spec'd out a Fiesta SE in a premium color with heated seats and mirrors and some other fanciness it came out to $17,256 with A plan.

I may be disagreeing with others here, but my experience having a Fiesta as a rental car was that it SUCKED. Slow, not responsive, poor handling - just a lousy thing to drive. I have been very pleasantly surprised by the Ford Focus however. I don't know about pricing but they are very similar cars in terms of size/design.
I don't remember it being THAT bad, we rented one in 2012.  My husband hated it though, and it was a REALLY tight squeeze to get the carseat into the back, and that green color is just... off.  Definitely test drive to see what you like or dislike.  I was all fired up to buy an electric Ford Focus until I sat in it and HATED the giant console.  Which seems to be what all cars are moving towards so I'd better learn to love it or keep my current car forever.

RWD

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Re: Buying a new(or used) car, please advise!
« Reply #26 on: January 09, 2015, 02:30:59 PM »
If you intend keeping the car 10+ years then that is too moot.

Okay, stupid car question here.

Can buying a new car can be a viable option if:
1) You intend to keep it forever
2) Can buy it without loans

I posted this detailed used/new comparison a couple months ago. Almost no one responded to it though...
http://forum.mrmoneymustache.com/welcome-to-the-forum/detailed-used-vs-new-car-cost-comparison/

Le Barbu

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Re: Buying a new(or used) car, please advise!
« Reply #27 on: January 09, 2015, 02:48:34 PM »
I made myself that kind of spreedsheet. In every situation, the "sweet spot" for cars is between year 3 and 10 (50k-150k miles). Newer than this, you lose because of depreciation, higher insurances and opportunity cost. After, the caveats are repairs and reliability.

For someone driving less than 10k miles/year, good at DIY mechanic, not worry about minor reliability issue (i.e. a Mustachian like me!), sweet spot is more like owning between year 5 and 15, 75k-175k miles.