Author Topic: Is this car a good deal  (Read 1061 times)

dragonwalker

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Is this car a good deal
« on: May 01, 2019, 10:33:45 PM »
Recently I was thinking of buying a new car. I currently have a 2009 Honda Civic LX with 84K miles. No problems except for some small cosmetic issues. Weekly use is about 200-250 miles. It has low mileage because I biked to work for the longest time. In about 1 year my care mileage may go up to about 300. I don't have a particularly good reason for a new car other than maybe wanting to change it up while getting an even more fuel efficient option. I asked on another post and a few people reminded me it seems the numbers couldn't justify it but then I saw a really great deal and see what you guys think.

There is a 2016 Toyota Prius 2 Eco with 15,053 miles near me selling for $16,995. KBB says the fair purchase price for that car is $21,928. The Prius looks great and it seems fine. The only thing is the website I found it on did say something about "frame" damage indicated. When I called the dealership they claimed the title was clean, no accidents but that yes it may have gotten that from someone perhaps backing into a pole or other similar type of damage. Nothing appears to be visible. It's been at the dealership for almost 2 months. I have not gone to seen it in person. If I bought it I would probably buy in cash unless the interest was really low. I'm aware of the increase in car insurance.   

I thought that was a bit of a weird explanation and then I was thinking about how it's possible for anyone to know about that kind of damage if it was so minor it wouldn't have gotten reported. Could someone selling the car to a dealership have self reported that? Are dealerships under some obligation to disclose that kind of information? I'd think if a car was not officially listed as having been at an accident and the cosmetic damage was repaired, are dealerships legally not even mention the damage? What do you guys think of the situation and the deal? Thanks.   
« Last Edit: May 01, 2019, 10:39:09 PM by dragonwalker »

RWD

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Re: Is this car a good deal
« Reply #1 on: May 01, 2019, 11:23:12 PM »
There was probably an insurance claim. Cars can have been in an accident and still have a clean title. If you pursue that vehicle make sure to have it inspected by someone that knows what to look for with regards to frame damage and proper repair. Frame damage can be a safety issue and of course also would greatly affect the value of the car.

chemistk

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Re: Is this car a good deal
« Reply #2 on: May 02, 2019, 06:00:52 AM »
I found the car you're describing on Cars.com. First of all, the pictures the dealer has posted are absolutely awful. It's almost like they're using a fish-bowl lens.

I would probably avoid this car, unless you can get a really thorough PPI and a reputable (ideally one certified to work on a Prius) mechanic gives you his full confidence that there's nothing wrong.

It was a lease, looking at the carfax, which does mean that any and all damage should have been repaired and it could have been something as simple as a rogue shopping cart going full-bore into the side of the car. Frame damage is not necessarily the thing you should jump to.

I think my issue with this, like you say, is that it's too good to be true. Sure, it's not the most desirable color (a rich blue), or desirable trim (one up from base), but the miles alone should be enough for the dealer to see that it should be priced higher than it is.

The other flag is that it was for sale (briefly) on another dealer's lot before going to auction. Now, this too isn't inherently bad - happens all the time in the industry. If the original dealer can't move it in whatever they feel is a reasonable time frame, they'll send it off to auction. But it was on the original dealer's lot for less than a month. Unless the original dealer was trying to ask above KBB, it would have been a no-brainer sale.

Sometimes good deals just happen. Maybe that dealership doesn't move many Priuses and knows it has to go low to move it. Or maybe the issues it has are worse than one would expect.

It doesn't hurt to test drive it, but thinking back to your other thread, I'd still keep the Honda.

nereo

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Re: Is this car a good deal
« Reply #3 on: May 02, 2019, 07:48:14 AM »
you numbers still don't support buying a this newer car.
Look, you've got a good, fuel efficient car which is older and has low miles and low maintenance and does not cost much to insure. That's the gold standard around here in terms of having a car.
While a 2016 Toyota Prius 2 Eco would have better fuel economy, you're looking at "saving" $400 per year in fuel costs vs your current ride (assuming fuel @ $3/gallon, 15,000 miles/year). A good chunk of your savings in fuel costs will be offset by increased insurance, so let's be generous and say you'd save $300/year. 

You're considering dropping $17,000 to save $300/year?  The theoretical ROI is 57 years, decades longer than you'd own either car.  It's not a smart investment.  EVen if you slant the numbers to absurd levels (e.g. $5/gallon fuel, double your annual driving) you still won't make the new car save you money over the existing one.

Hey, if you just really want a new car and have tons of money saved up and no serious debt issues, identify this for what it is - you want the shiner toy and can afford it - but you can't make this a "better financial decision". 

dragonwalker

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Re: Is this car a good deal
« Reply #4 on: May 02, 2019, 08:19:09 AM »
@chemistk, thanks a lot for checking the Carfax. Iím surprised you were able to find that same exact car and look at it. Iím probably going to call again and ask some probing questions. Something has got to be amiss aside from the color
and trim level which happens to be exactly the trim I want because of the fuel efficiency and the color is fine I like blue. My big question is why this low below market? Could it be that they just want to move the car quickly and there truly isnít a hidden problem? Iím not experienced in car buying matters. Are there any questions you suggest that I ask?

@nereo I do appreciate your calculations. A few things I wanted to mention to see if the calculations change. I wouldnít plan to keep my car so an expected private party value of my current car is about $6K. I donít believe that was factored in. The lowest gas I can get in my area is $3.89/gallon which I am predicting will rise to well past $4 soon perhaps not $5 in some time. It seems keeping the exact same insurance coverage and recalculating new current annual mileage will raise annual insurance about $150. However if I add collision coverage it will increase about $800 per year. I believe the general rule is collision should be carried if itís annual premium doesnít exceed 10% of value. Is that reasonable? Iím not sure what you guys think about not carrying collision on a newish car. I am a good driver but still, mistakes happen. Thinking about worse case my mileage in 11 months time could increase from 200-250 to 350-400/week.   
« Last Edit: May 02, 2019, 08:20:46 AM by dragonwalker »

nereo

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Re: Is this car a good deal
« Reply #5 on: May 02, 2019, 08:36:22 AM »

@nereo I do appreciate your calculations. A few things I wanted to mention to see if the calculations change. I wouldnít plan to keep my car so an expected private party value of my current car is about $6K. I donít believe that was factored in. The lowest gas I can get in my area is $3.89/gallon which I am predicting will rise to well past $4 soon perhaps not $5 in some time. It seems keeping the exact same insurance coverage and recalculating new current annual mileage will raise annual insurance about $150. However if I add collision coverage it will increase about $800 per year. I believe the general rule is collision should be carried if itís annual premium doesnít exceed 10% of value. Is that reasonable? Iím not sure what you guys think about not carrying collision on a newish car. I am a good driver but still, mistakes happen. Thinking about worse case my mileage in 11 months time could increase from 200-250 to 350-400/week.

Fair enough, but all of those things still don't make this a 'better' financial deal for you.  Bottom line, the new car costs $17k and your existing car is $6k.  That's a difference of $11k.  You can't make up $11k in fuel savings in any reasonable amount of time when your existing fuel bill is somewhere around $1,700.  At best you might save, what, $900/month?  Maybe (possibly, with unicorn farts) a grand?  That's still too little to make up for the $11k difference, particularly when the car is unlikely to last that long under those "biggest saving scenario" driving loads.

FWIW I know how tempting it is to want an even more (and newer!) fuel efficient car.  I actually drive a 2006 Civic, and I often find myself wanting something better.  But the fuel savings aren't there enough to justify the loss of capitol.

Re: collision - realize all insurance is designed to make a profit off of its pool of drivers, and if you have the financial means to self insure you will statistically be better off.

As others have said, I'd be wary of this car regardless.
« Last Edit: May 02, 2019, 08:40:33 AM by nereo »

dragonwalker

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Re: Is this car a good deal
« Reply #6 on: May 02, 2019, 12:03:05 PM »
Thank you for the feedback. Under what likely scenario would it be worth getting a car like this? Since you drive basically the same kind of car what is your estimate of the remaining useful life of your car?

nereo

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Re: Is this car a good deal
« Reply #7 on: May 02, 2019, 12:31:39 PM »
Thank you for the feedback. Under what likely scenario would it be worth getting a car like this? Since you drive basically the same kind of car what is your estimate of the remaining useful life of your car?
There's no reason why a properly maintained Civic shouldn't continue to be reliable past 200,000 miles, and even mildly abused you can get well past the 150,000 mark no problem. I'm hoping to hit 240k on mine, but frame rust may become an issue long before I get to that milestone (at our current rate of driving it will take us another 7-8 years).
Remember that the depreciation curve is largely flat on older models.  Keep it maintained and you should get another 6+ years on your vehicle.  Perhaps not what you wanted to hear, but that's how I see it.

chemistk

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Re: Is this car a good deal
« Reply #8 on: May 02, 2019, 01:30:38 PM »
@chemistk, thanks a lot for checking the Carfax. Iím surprised you were able to find that same exact car and look at it. Iím probably going to call again and ask some probing questions. Something has got to be amiss aside from the color
and trim level which happens to be exactly the trim I want because of the fuel efficiency and the color is fine I like blue. My big question is why this low below market? Could it be that they just want to move the car quickly and there truly isnít a hidden problem? Iím not experienced in car buying matters. Are there any questions you suggest that I ask?

We recently purchased a used Odyssey because we have a 3rd on the way, and we ended up getting the van for ~$2k below what KBB and NADA suggested it would sell for. There's not a damn thing wrong with it - it just wasn't in a dealer where people were looking for vans (Chevy dealer) in a market where people are more interested in trucks and SUVs. The salesmen said that they had maybe 4 or 5 people interested in it total in the 3 months it sat on their lot. They wanted to clear the space so they priced it accordingly and were prepared to send it to auction a week later.

Point is, good deals do exist and you just have to recognize them when you see them and do your due diligence to avoid getting taken.

There's not many questions you could ask them in this situation that would alleviate the concern of underlying issues. You could try to read up on the Prius basics and go in as an informed buyer but if there truly is something like frame damage, you're never going to know without a second opinion.

If you tend to have an optimistic view on life, go ahead and cautiously assume that there's nothing wrong with it and that it's a confluence of factors that's caused it to be priced like it is. But you'll have to accept that you could end up with a lemon and then prepare yourself to deal with that.

If you tend toward a cloudy outlook, don't pursue it or pursue it assuming there's a major issue until you're convinced otherwise.

Some very quick comps research does show that this particular trim just may not be that desirable. https://www.purecarbuying.com/2016-Toyota-Prius/Used-Hatchback/Dumfries-VA/12615865/Details.aspx.

Take that for what you will. If I were you I'd still keep the Honda, but I'm not you so the least I can offer is the above advice.

honeybbq

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Re: Is this car a good deal
« Reply #9 on: May 02, 2019, 04:17:44 PM »
Thank you for the feedback. Under what likely scenario would it be worth getting a car like this? Since you drive basically the same kind of car what is your estimate of the remaining useful life of your car?
There's no reason why a properly maintained Civic shouldn't continue to be reliable past 200,000 miles, and even mildly abused you can get well past the 150,000 mark no problem. I'm hoping to hit 240k on mine, but frame rust may become an issue long before I get to that milestone (at our current rate of driving it will take us another 7-8 years).
Remember that the depreciation curve is largely flat on older models.  Keep it maintained and you should get another 6+ years on your vehicle.  Perhaps not what you wanted to hear, but that's how I see it.

As someone with a 2005 Honda... I totally agree. I see no reason to change your vehicle.

cchrissyy

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Re: Is this car a good deal
« Reply #10 on: May 02, 2019, 04:28:04 PM »
https://www.salestaxhandbook.com/california/sales-tax-vehicles

don't forget that any change of your faithful civic to a fresher used car will cost you a large extra one-time cost for sales tax.

Buffalo Chip

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Re: Is this car a good deal
« Reply #11 on: May 02, 2019, 07:39:38 PM »
I donít see how the decision to buy the newer, nicer car can be made on economic grounds. If you want a newer vehicle because you like cars, it gives you great joy and have the cash, then definitely enjoy your newer car!  Otherwise, youíre already driving a car that is reliable with less than 100k miles on it. Heck itís not even broke in yet.

The other day DS was noting how cool some new truck was. A teachable moment! I pointed out that my older SUV that we were driving at the time, which is worth $3k on a good day, got to its destination just as fast as a $50k truck. So we spent time looking out for truck awesomeness and blundered across a fine, well broke in truck that happened to be for sale for $500. We decided that was the best one on the road. But a bike would be even better.

lost_in_the_endless_aisle

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Re: Is this car a good deal
« Reply #12 on: May 02, 2019, 08:15:50 PM »
As a fellow 2009 Civic LX owner, I can't imagine why you'd get rid of it. I'll send you a picture of mine if you want to feel better about yours (paint got sandblasted off, extensive hail damage, elk-related damage, skunk-related damage, smashed back bumper [backed into an invisible concrete wall]...)

dragonwalker

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Re: Is this car a good deal
« Reply #13 on: May 02, 2019, 09:57:09 PM »
Yes yes I'm not going to buy the car. I think it will be a long time until I think anyone here thinks that should even be considered in the realm of possibility.

nereo

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Re: Is this car a good deal
« Reply #14 on: May 03, 2019, 04:37:02 AM »
Yes yes I'm not going to buy the car. I think it will be a long time until I think anyone here thinks that should even be considered in the realm of possibility.

Again, I'm not saying you shouldn't by such a car - just that the economic rationalization for doing so isn't there. 
If you've got a lot of savings, and a cash surplus each month, and a more fuel efficient car is what you want to spend your money on - by all means go ahead.  But it won't save you money by saving you fuel.  You would be doing it because you want to, not because it makes financial sense.  Plenty of people around here drive much less sensible cars.

chemistk

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Re: Is this car a good deal
« Reply #15 on: May 03, 2019, 05:59:02 AM »
Yes yes I'm not going to buy the car. I think it will be a long time until I think anyone here thinks that should even be considered in the realm of possibility.

Again, I'm not saying you shouldn't by such a car - just that the economic rationalization for doing so isn't there. 
If you've got a lot of savings, and a cash surplus each month, and a more fuel efficient car is what you want to spend your money on - by all means go ahead.  But it won't save you money by saving you fuel.  You would be doing it because you want to, not because it makes financial sense.  Plenty of people around here drive much less sensible cars.

To add to this point, we (the at-large forum population) are not here to dictate the decisions you make with your life. But, when you ask for an opinion you'll get one. If you were to buy the Prius tomorrow, and never tell anyone here but continue to participate, nobody would ever know the extent of your decision because you're not accountable to anyone here.

dragonwalker

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Re: Is this car a good deal
« Reply #16 on: May 05, 2019, 09:17:52 AM »
I get it. I think I'm on here to ask questions like these so I can have some people look at the reality for me. I think I knew inside what answer I was going to get. It's just that I'm not that experienced with cars and it looked like a good deal on a sensible car that I have thought about over the last few years. Maybe in the next few years something on my car will blow up and it will make sense, financially, but probably not because knowing this place someone will recommend that I buy an even older version of my own car. I doubt it the car seems pretty indestructible :)

Come to think of it I don't think it would ever "technically" make sense to buy a newer car as the difference in older and newer especially in MPG hasn't reached a wide enough gap.