Just to play devils advocate in the new vs used car debate I did a little comparison. My assumptions were that someone would keep the car for 10 or 15 years of total life driving the car 10,000 miles per year and pay 8% sales tax (the rate in my part of NY). I looked up the value of a 2015 Prius Two on True Car, a 2013 Prius Two in very good condition with 20,000 miles in a private sale on Kelley Blue Book, and a 2012 Prius Two in very good condition with 30,000 miles in a private sale also on KBB. Here are the results:
Year | 2015 | 2013 | 2012 |
Cost | $21,866.00 | $16,577.00 | $15,464.00 |
Cost w/ tax | $23,615.28 | $17,903.16 | $16,701.12 |
Per year (10 yr) | $2,361.53 | $2,237.90 | $2,385.87 |
Per year (15 yr) | $1,574.35 | $1,377.17 | $1,391.76 |
10 yr vs new | 0 | $123.63 | -$24.35 |
15 yr vs new | 0 | $197.19 | $182.59 |
So the most you'll save is $200 per year if you keep the 2 year old car for a total life of 15 years. You'll actually spend more on the 3 year old car if you keep it for 10 years of total life.
You can obviously make arguments that if you keep it longer, get a used car in worse condition, find a better deal from a more desperate private seller, invest the upfront savings, etc that the used car advantage will become larger, but the point is once you accept that a car has some useful life that has already been used up when you buy used, the difference isn't all that much.
The question then becomes whether the extra warranty time, new car smell, knowing the full history, getting to tell people you bought a new car -- whatever you like about the idea of buying a new car is worth the (slight) premium.
(I see that people have made similar points while I've been working on this, so hopefully the numbers make this a valuable addition to the conversation).