Why used? I would ask why in the world you'd buy new.

I've only ever bought used cars. I bought a car in 2012 for $1000, crashed it into a Jeep in 2013 after putting 23k miles on it, bought another car for $2000 in 2013, put 13k on it and then recently sold it for $1750 and bought a different car for $1000 (bought with 146k). The per mile total costs of each car were/are, respectively (including all costs: depreciation, fuel, maintenance, repairs, insurance, registration, taxes, etc), $0.18/mile, $0.32/mile (relative gas guzzler with expensive maintenance, and $0.16/mile. That's with doing all the major maintenance (timing belt, water pump, all fluids, spark plugs/wires/cap/rotor, check brakes, etc) right after acquisition (otherwise you're asking for trouble with older cars).

Let's compare my older, used high-MPG subcompact, to a new, even-higher-MPG subcompact.

My girlfriend's sister bought a new Prius C last fall for $26k, financed at 2% with $6k down. She's put 14k on it. Currently she has no equity in it, so that's six grand just gone, plus she's still got her obnoxious car payment, and full coverage new car insurance. If the car gets to 250,000 miles before any major repairs (It's a Toyota, pretty fair assumption I'm pulling out of the air), that puts her at about $0.10/mile in depreciation. If we assume 60MPG with $4 gas, she's paying $0.07/mile for fuel. Maintenance is pretty minimal on that car, so if we assume $50 service every 10k for the synthetic oil change, new $400 tires every 50k, and major service every 100k for $500, that's about $0.02/mile. Her insurance is about $150/mo, which works out to $0.10/mile at her current rate of driving, but that'll go down as she (23) and the car both get older that'll go down, so I'll hand-wave a lifetime average of $0.06/mile. I'll throw in another $0.01/mile to cover things like wiper blades, car washes, and stupid random problems that come up every 100k or so.

So that's a total of $0.26/mile for the new car over 250,000 miles. On the surface, that's less than my 26MPG fancy car I used to drive, but only about 63% more than my current cheapo mustachemobile.

But then there's opportunity cost. This gets trickier to calculate with her financing the car and not buying it outright, but I'll try. If instead of putting $6,000 down and paying $372/mo for five years, I opened an IRA with $6,000 and added $372 per month to it, assuming an average of 5% growth, that puts the IRA balance at $32,324 after the five years. Then it sits there growing at 5% for another 9 years (based on her driving habits and my 250,000 mile number), growing to $50,145 when she sells her car for $500 to a bearded musician. Subtracting out the dollars actually put in (because we already counted that as depreciation earlier), that leaves $21,825 in investment gains over the life of the car. Dividing that out over 250,000 miles, and we get an additional $0.09/mile.

So then by that metric, using her driving habits again for simplicity, my car would last her three years if I sell for scrap at 200,000. So if I locked away $1,000 in an IRA for three years with the same 5% return, it would then be worth $1,157. $157 divided out by the 54,000 miles is $0.003, less than half a cent per mile.

So really, big picture, if that bumps my car up to $0.17/mile, and hers up to $0.34/mile, that's exactly **double the cost** to drive the new car. And the numbers get even worse if you get a new car that costs more than $26,000, gets less than 60MPG, isn't as reliable, long-lasting, and cheap to maintain as a Toyota, or all three. Or if you invest your money at better than 5%.

Also, if something really stupid happens, it's easier to dump a $1,000 car than a $26,000 one. And if you have to sell it, a $1,000 car sells a lot faster and easier than a $26,000 one, and you can give someone a deal on it and not really be screwing yourself over at all, or worry about sitting on as expensive of an asset.

I also just realized none of my numbers factored in taxes, which I know are significant on a new car. Oh well, I'm not recrunching those numbers. And I do think my car will last me longer than 200,000.

That's why you buy used. The difference is a little less dramatic when you buy less far down the depreciation curve than I do, but it's still very significant.

The absolute only exception I've seen that can ever make sense for some people is leasing an electric car on a super cheap promo lease deal combined with heavy tax incentives. Sometimes the numbers work out really really well in that situation. I know at least one person on the forum did something like that within the past year, and their total cost of driving is very close to zero if I remember correctly.