Author Topic: Used car purchase: low miles or low cost?  (Read 3316 times)

jaye_p

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Used car purchase: low miles or low cost?
« on: October 22, 2015, 09:00:50 AM »
Assuming other variables (year, trim level, etc.) being roughly equal, which is a better deal:  buying a lower-priced vehicle with higher miles (a 2004 with 170,000 miles for $3900) or a higher-priced vehicle with lower miles  (a 2005 with 115,000 miles for $7300)?  Would the higher-mileage vehicle have higher repair and maintenance costs significant enough to cancel out the $3,400 price difference, assuming that an absolute maximum of 5,000 miles would be put on the vehicle in any given year, and that we would be driving this vehicle for at least the next ten years?

Bracken_Joy

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Re: Used car purchase: low miles or low cost?
« Reply #1 on: October 22, 2015, 09:09:39 AM »
I don't have an answer for you- I have the same question! Would love to know people's thoughts on this.

yuka

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Re: Used car purchase: low miles or low cost?
« Reply #2 on: October 22, 2015, 09:28:06 AM »
I would definitely go with the low cost car. The number of miles you suggested would get you to 220k miles, or 165k on the newer one.

However, you should probably say what kind of car it is, because then someone with more specific experience can chime in about that vehicle. As someone with way too much money tied up in his car, I say go for the cheap one!

Bracken_Joy

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Re: Used car purchase: low miles or low cost?
« Reply #3 on: October 22, 2015, 09:44:18 AM »
Anyone have any experience with Ford Escapes? How about Rav4s?

Gone Fishing

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Re: Used car purchase: low miles or low cost?
« Reply #4 on: October 22, 2015, 09:50:41 AM »
Probably worth playing with one of the car valuators (KBB, Edmunds) and see what the mileage does to value with a large sample size. Might not just be mileage affecting the price.  Did they change body styles from 04 to 05?

I don't enjoy the car buying process, so I tend to lean towards the lower mileage/more expensive cars than many on the forum.  5-6 years old and 70-80,000 miles is my personal sweet spot at the moment, which probably gives me around 10 years of use before repairs start getting out of control (we drive a fair bit) and I have to start car shopping again.    If your hair is on fire with high rate debt, I'd try to keep as little as possible in "car inventory" but once you have your feet under you, I consider it a bit of a personal luxury to buy a slightly newer car that will give a few more hassle free years. 

I also try to estimate depreciation curves attempt to pick the vehicle with the flattest curve.  I can almost assure you the curve will be flatter on the 2004 model!     

alexrcraig

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Re: Used car purchase: low miles or low cost?
« Reply #5 on: October 22, 2015, 09:52:35 AM »
Good question. The first part will not be math based and will be more of a personal preference, but I will try to back it up with facts when possible.

My take:

I would buy the slightly more expensive car with less miles. The reason is because that is exactly what I have done in the past. A car with only 70,000 some miles left has significant amount of drive time on it. It also means less wear in a given time period. The fact that someone drove 170,000 miles on about 10 years means they drove 17,000 miles per year.

The average american only drives about 12,000 miles per year. So that means they drove 50% more than the average american driver. That is a lot of wear and tear on a car in a short period of time. When you are driving it that much, I feel like keeping up on the maintenance can be difficult compared to the more expensive less miles car.

I bought a car with 74,000 miles on it for $5800 and I have not had any problems since I purchased it five years ago. The only thing I have had to do is minor stuff like lights, brakes, and tires. Other than that I have not had any problems. *Knock on wood*

I cannot come up with a mathematical formula, but this guys insights might be extremely helpful to you:

http://www-math.bgsu.edu/~zirbel/carcosts/





jaye_p

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Re: Used car purchase: low miles or low cost?
« Reply #6 on: October 22, 2015, 10:20:41 AM »
Hmm.  Food for thought.

To answer questions asked by others:

1.  We have no debt other than our mortgage, which will be paid off in 15 years at the most (we make extra payments most months, so I anticipate having it paid off in about 12 years).
2.  The vehicle in question is a Toyota Sienna minivan.  Redesigned in 2004, so no significant changes from 2004 to 2005.
3.  For comparison purposes, my current car is a 99 New Beetle with 190,000 miles; my husband's is a 96 Civic with 300,000+ miles.  Both purchased used long ago.

Captain and Mrs Slow

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Re: Used car purchase: low miles or low cost?
« Reply #7 on: October 22, 2015, 11:09:39 AM »
I don't know US prices but that seem to be pretty high!. I mean 3900 for an soon to be 12 year old car!

The wife and I hardly drive any more so I tend to for a year old low mileage car done right you can get it 30% less than new

Andrew Hallman  (Millionaire Teacher) likes to buy fully depreciated cars (like the ones you have) drive them for a year and then sell them. I asked on his blog how well it worked and for the most part he had no repairs and had no problem selling it a year later.

Drifterrider

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Re: Used car purchase: low miles or low cost?
« Reply #8 on: October 22, 2015, 01:27:54 PM »
Assuming other variables (year, trim level, etc.) being roughly equal, which is a better deal:  buying a lower-priced vehicle with higher miles (a 2004 with 170,000 miles for $3900) or a higher-priced vehicle with lower miles  (a 2005 with 115,000 miles for $7300)?  Would the higher-mileage vehicle have higher repair and maintenance costs significant enough to cancel out the $3,400 price difference, assuming that an absolute maximum of 5,000 miles would be put on the vehicle in any given year, and that we would be driving this vehicle for at least the next ten years?

Consider this:  Would you pay $3,400 for a car that would last you 55,000 miles?  That is the difference in price and mileage you are comparing.

If you are talking about a Toyota, Honda etc. you can reasonably expect to get 200,000+ plus miles.  Check the car faxes.  Are the two the same make, model etc?  Are you comparing apples to apples?

I just bought a 2005 Hyundai Accent.  Don't really like it, a bit too small and noisy BUT everything works, I got a limited 6 month warranty (doesn't cover much), NADA was $3,700 and I got it for $2,800 (doesn't cover TTL).  106K miles. 

You can get a low mileage lemon or a high mileage pearl.  All things being equal, I'd go with the lower cost car.

405programmer

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Re: Used car purchase: low miles or low cost?
« Reply #9 on: October 22, 2015, 02:00:57 PM »
Overall I would vote for the lower price car.

But definitely keep in mind the engine and transmission on the car. For example if you look up the engine model on Wikipedia and find out it was used on many production years then there will be plenty of parts available if things break on your car. However I would absolutely stay away from high mileage cars that had a relatively unique engine where it was only used on one or two model years. This means that parts will be more difficult to find and there could be an engineering reason why the manufacturer didn't keep that motor for many years.


jaye_p

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Re: Used car purchase: low miles or low cost?
« Reply #10 on: October 22, 2015, 02:04:45 PM »
Drifterrider,

They are exactly the same vehicle - make, model, trim level - except that one is a 2004, the other a 2005.  No significant redesigns between 2004 and 2005.  The only significant difference is the mileage.

405programmer, that is a good question.  I know the Sienna was redesigned for 2004, and was redesigned for 2010.  So 6 years with the same engine, etc.

Matt in Akron

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Re: Used car purchase: low miles or low cost?
« Reply #11 on: October 22, 2015, 02:27:15 PM »
The answer is - whichever vehicle has more complete service/repair records provided to you from the seller.

A vehicle with 170k on the clock can be purchased with confidence if you've got a binder full of receipts for oil changes and repairs from the previous owner.

A vehicle with 170k on the clock and no repair history is a pretty big question mark - you have no idea about how well (or, not well) that vehicle has been maintained.

Either way - I'd recommend a pre-purchase inspection (PPI) at the local Toyota dealer, to identify any immediate issues or area of concern.  This could provide you additional bargaining power if something is really wrong with the car, or just give you an idea of what you might need to budget for in the repairs dept down the road.  PPI's are usually 1.0hr of labor, so around $80-$100 depending on your Dealer.  Worth the peace of mind.