The Money Mustache Community
General Discussion => Welcome and General Discussion => Topic started by: The Money Monk on February 26, 2014, 11:30:11 AM
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I'm not currently on the market myself, but just something I have been contemplating. Buying cheap used cars is one of the pillars of mustachianism (if you must have a car at all), so what is the "sweet spot" in terms of age and mileage where you are getting the maximum discount?
For example: 1 year and 10,000 miles will make a huge difference in price when compared to a new car.
But for a car 15 years old with 150,000 miles, in another year and another 10k miles the price will probably be virtually unchanged.
So what is the sweet spot in age/mileage where you are getting the best bargain and still getting a reliable car?
My hunch would be a just-out-of-warranty car, 3-5 years old with about 50-75k miles. with a reliable make/model you should be able to get 10 years and 100k miles out of them from that point on.
What do you guys think?
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It depends on how long you intend to keep it and what your intended usage will be.
Personally, I feel the sweet spot is at around 75,000 miles. At this point the car has taken a bulk of its depreciation hit, but isn't so high up there that the savings on depreciation doesn't get eaten up with inevitable repairs. That's the point where the depreciation curve goes from being a cliff to being more of a gentle slope, and the price per mile from a depreciation standpoint becomes significantly more favorable.
That said, if you plan on keeping the vehicle for as much as 200,000 or 300,000 miles, it can be cost effective to purchase it brand new.
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That said, if you plan on keeping the vehicle for as much as 200,000 or 300,000 miles, it can be cost effective to purchase it brand new.
Is this simply because you can make sure it's maintained properly? Or something else?
I definitely value my decade old car, which I bout new, more than what I could sell it for.
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It depends on how long you intend to keep it and what your intended usage will be.
That said, if you plan on keeping the vehicle for as much as 200,000 or 300,000 miles, it can be cost effective to purchase it brand new.
No. It is never cost-effective to buy a brand new car, that is an emotional (or otherwise influenced) decision, not a mathematical one.
http://www.mrmoneymustache.com/2011/11/28/new-cars-and-auto-financing-stupid-or-sensible/
When you buy a brand new car, you’re buying up to 200,000 miles of automotive inventory. Even if you are one of the extremists who drives 15,000 miles per year, that is still over 13 years of inventory – meaning that although you are paying for all of those future miles when you buy the car and paying additional carrying costs for them constantly for the 13 years of ownership, you don’t get to actually use up those last miles until the year 2024.
So let’s imagine two 15,000-mile-per-year drivers:
Consumer Carl buys a new 2012 Toyota Corolla S with a 5-speed manual transmission, for $20,000 including taxes and fees and registration. This is one of the best new-car values on the market when measured on a cost-per-mile basis when you factor in its long term reliability and fuel efficiency. He drives it for 13 years, traveling 200,000 trouble-free miles.
After 13.3 years, tying up that $20 grand in a car cost Carl about $38,269, compared to putting the money into paying off part of a 5% mortgage or making another investment that pays a 5% annual return.
Mustache Mary buys a 2006 Toyota Corolla with 90,000 miles on it for $9,000 including taxes. She can only get 110,000 miles out of this car which takes 7.3 years to use up. At that point, she buys a second used Corolla to cover the remaining 90k miles. To make our numbers clean, let’s say she buys a slightly older one such that it only has 90,000 miles of life remaining. This costs her $7,500.
She has to go without that $9000 for the entire 13.3 years, which could have earned her $17,221 if she had used it to pay off her mortgage.
Then she spends an additional $7,500 which is missing for the final 6 years at a cost of $10,050.
So at the end of 13 years, Consumer Carl spent $38,269 on Corolla ownership, while Mustache Mary spent $27,271. She saves about $11,000 even while doing the same amount of driving, and she will repeat that windfall every 13 years or so by continuing this strategy.
Even while driving a nearly-equivalent car for exactly equivalent mileage, Mary saves 30% on the cost of driving simply by buying her Corollas used instead of new.
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It depends on how long you intend to keep it and what your intended usage will be.
Personally, I feel the sweet spot is at around 75,000 miles. At this point the car has taken a bulk of its depreciation hit, but isn't so high up there that the savings on depreciation doesn't get eaten up with inevitable repairs. That's the point where the depreciation curve goes from being a cliff to being more of a gentle slope, and the price per mile from a depreciation standpoint becomes significantly more favorable.
That said, if you plan on keeping the vehicle for as much as 200,000 or 300,000 miles, it can be cost effective to purchase it brand new.
I don't know if it's ever cost effective to buy a car brand new. no matter how long you are going to keep it. You can get a car 1 year old with less than 10K miles for a significant discount off brand new prices. And that is for a car that is mechanically good as new, and still under warranty.
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Is this simply because you can make sure it's maintained properly? Or something else?
I definitely value my decade old car, which I bout new, more than what I could sell it for.
Yes, because you can ensure that it will be maintained properly. Generally speaking, people don't treat their cars very well, and there is a certain level of risk that you assume when you purchase a used one. In effect, you are gambling a bit.
We'll use my recent purchase as an example. I bought a 2007 Toyota Camry with 93,000 miles on it for $12,000. I could have purchased a brand new Camry for $18,000. Up front I saved that $6000, but most of that $6000 goes up in smoke if the transmission eats itself. Now I'm in it for nearly the same as if I had purchased a new one, and I'm still not covered against further repairs like I would have been had I chosen the new one.
No. It is never cost-effective to buy a brand new car, that is an emotional (or otherwise influenced) decision, not a mathematical one.
http://www.mrmoneymustache.com/2011/11/28/new-cars-and-auto-financing-stupid-or-sensible/
Except in the real world, cars, even Toyota Corollas, break, and they do so in expensive ways and your risk of that happening increases with the age and milage of the car. If you're not factoring in that risk to your calculations, you're doing it wrong.
Not only that, but many cars need extra money thrown at them for maintenance items, particularly at around 100,000 miles. So add a couple thousand on top for that 90,000 car for potential brake work, tires, transmission servicing, timing belts, basic tune-up stuff like spark plugs, coolant drain and fill, etc. and you're THAT much closer to what it would have cost to purchase the brand new car that needing none of that, nor has the risks associated with neglectful and abusive prior owners.
I'm not saying that you're wrong, I'm saying it depends. To completely write off new car ownership as an option to consider without running the numbers based on your unique situation is folly.
I don't know if it's ever cost effective to buy a car brand new. no matter how long you are going to keep it. You can get a car 1 year old with less than 10K miles for a significant discount off brand new prices. And that is for a car that is mechanically good as new, and still under warranty.
Why didn't the original owner want to keep that car? Was there something wrong with it or did the car simply not meet the person's needs? These are questions you have to explore, but yeah you could save a ton of money that way, but you have to be on your toes to be sure you're not getting someone else's mess.
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There's also this http://en.m.wikipedia.org/wiki/The_Market_for_Lemons
And the fact that in the last few years, the new car premium was severely reduced (not sure if it still is - this was during the aftermath of financial crisis where used cars were in higher demand and manufacturers were hurting for sales)
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Why didn't the original owner want to keep that car? Was there something wrong with it or did the car simply not meet the person's needs? These are questions you have to explore, but yeah you could save a ton of money that way, but you have to be on your toes to be sure you're not getting someone else's mess.
It would have to be a mess that would take more than 2 years and 23,000 miles to surface, otherwise the car I mentioned is still under warranty.
Getting a brand new car can be a logical choice if you are knowingly doing so just to have piece of mind, but realize that you are paying for that little extra bit of security, so I wouldn't really call it "cost effective".
Realize also that even a barely used car liek i mentioned would be $2K to 3K cheaper than new, so it would take a serious mechanical issue to surface, AFTER warranty expire, just to break even with buying a new car.
You just have to realize there is price a premium attached to getting a car totally new that has nothing to do with the mechanical superiority compared to a barely used car.
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I don't know if it's ever cost effective to buy a car brand new. no matter how long you are going to keep it. You can get a car 1 year old with less than 10K miles for a significant discount off brand new prices. And that is for a car that is mechanically good as new, and still under warranty.
You are presuming that the used car has had a good driver and good maintenance. This is especially dubious if a car has not stayed long with it's last owner. A 1yo car was probably a rental or a company car, and was probably abused.
From my experience, a 20k$ used car is more difficult to buy than an under-5k$ car since on the former the profit made from hiding defects or the real mileage is much greater. At the upper end, I encountered rebuilt cars with forged titles and curbstoners. At the lower end, most sellers just want to sell it and be done. I bought good items in both cases, but the process was much easier in the lower bracket; due diligence and inspections won the day.
Buying new, despite what you hear about dealerships, is a point-and-pay affair.
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There's also this http://en.m.wikipedia.org/wiki/The_Market_for_Lemons
And the fact that in the last few years, the new car premium was severely reduced (not sure if it still is - this was during the aftermath of financial crisis where used cars were in higher demand and manufacturers were hurting for sales)
You can get a brand new Altima, Camry, or Fusion for $18,000, right now. The going rate for a used Camry or Altima with ~75,000 miles is in the area of $12,000 to $13,000. You can get a better deal on a used Fusion if you like the car.
Right now used car prices seem to be somewhat inflated, which makes buying a brand new one a potentially better long term option. It hasn't always been this way, but if you can see far enough ahead to know that you're going to keep the car for a very long time, a brand new $18,000 Camry or Altima could be a great value for your money.
The only reason my wife and I didn't go this route was because we didn't have the cash to cover it like we did for the car we chose, and we weren't certain that the car was going to meet our needs for more than five years... so we rolled the dice on the used one.
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Why didn't the original owner want to keep that car? Was there something wrong with it or did the car simply not meet the person's needs? These are questions you have to explore, but yeah you could save a ton of money that way, but you have to be on your toes to be sure you're not getting someone else's mess.
It would have to be a mess that would take more than 2 years and 23,000 miles to surface, otherwise the car I mentioned is still under warranty.
Getting a brand new car can be a logical choice if you are knowingly doing so just to have piece of mind, but realize that you are paying for that little extra bit of security, so I wouldn't really call it "cost effective".
Realize also that even a barely used car liek i mentioned would be $2K to 3K cheaper than new, so it would take a serious mechanical issue to surface, AFTER warranty expire, just to break even with buying a new car.
You just have to realize there is price a premium attached to getting a car totally new that has nothing to do with the mechanical superiority compared to a barely used car.
Based on the research I've done over the last month that isn't 100% true. Used car dealers are counting on people to believe that a used car is always the cheaper option and that they aren't even considering new. I encountered a great number of used cars being sold for within $1000 of the same exact car being sold brand new.
I almost made this mistake until I discovered how much certain manufacturers are cutting the price of their vehicles to move them off the lot.
For me, if the Camry I purchased needs a few thousand in repairs over the next two years who do you think is going to be kicking himself for not buying a new one instead? You can call that simple peace of mind if you want, but I don't think that's doing it justice. At the end of a day a used car with a certain amount spent on maintenance and repairs costs the same as a new one with a warranty.
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It would have to be a mess that would take more than 2 years and 23,000 miles to surface, otherwise the car I mentioned is still under warranty. compared to a barely used car.
That is a common misconception. Abuse or neglect is NOT covered. If that tranny has been damaged by racing, or that oil change has not been done, the only guarantee is that you are left holding the bag.
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It would have to be a mess that would take more than 2 years and 23,000 miles to surface, otherwise the car I mentioned is still under warranty. compared to a barely used car.
That is a common misconception. Abuse or neglect is NOT covered. If that tranny has been damaged by racing, or that oil change has not been done, the only guarantee is that you are left holding the bag.
....and heaven help you if you buy a sporty car with a turbocharger that got flagged by a dealer for having had the ECU reprogrammed by a tuner.
If something breaks, your wallet is toast.
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If you are concerned about the vehicle's maintenance record, ask the seller for it. Or, take the VIN, and head to the dealership, and have them pull the records.
There are many people who look after their vehicles, and you can generally tell who those people are, by talking with them. I've only ever once bought a used vehicle off a car lot, the rest of the time (and we've owned 9 vehicles in the last 8 years) have been private sales. No sales tax, and you can negotiate.
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It would have to be a mess that would take more than 2 years and 23,000 miles to surface, otherwise the car I mentioned is still under warranty. compared to a barely used car.
That is a common misconception. Abuse or neglect is NOT covered. If that tranny has been damaged by racing, or that oil change has not been done, the only guarantee is that you are left holding the bag.
....and heaven help you if you buy a sporty car with a turbocharger that got flagged by a dealer for having had the ECU reprogrammed by a tuner.
If something breaks, your wallet is toast.
And why would you buy such a ridiculous car in the first place?
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And why would you buy such a ridiculous car in the first place?
That's a pretty aggressive judgement to be making. What makes that ridiculous and why should anyone care what you think?
You realize that many basic cars are coming with smaller engines and turbochargers these days, right?
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I don't think there is any 'sweet spot' that applies to all makes. I certainly wouldn't hesitate over buying a Honda or Toyota with over 200K miles. (I own one of each: the Honda has about 175K, the Toyota something over 225K.) I'd hesitate over a Ford or Chevy with 100K, and wouldn't have a Chrysler fresh from the factory.
As for the random major expense (like the pretty much imaginary $6K transmission), buy cars cheap enough that you can simply replace the whole car for less than the price of a major repair.
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(like the pretty much imaginary $6K transmission)
Yeah, transmission replacements tend to not cost that much. I'm not sure where you got that from.
(if you're going to snipe at me at least do so based on what I actually said)
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It would have to be a mess that would take more than 2 years and 23,000 miles to surface, otherwise the car I mentioned is still under warranty. compared to a barely used car.
That is a common misconception. Abuse or neglect is NOT covered. If that tranny has been damaged by racing, or that oil change has not been done, the only guarantee is that you are left holding the bag.
I'm also guessing the kind of person who buys a new car every 1-2 years isn't treating the drivetrain well. But that's just, like, my opinon man.
I'd probably pay a small premium for a new car vs. 1-2 years. But I'd also be OK going out further on the depreciation curve. It hasn't really come up, since I'm hoping my car will last a long time.
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buy cars cheap enough that you can simply replace the whole car for less than the price of a major repair.
As an aside, my biggest regret with my current car is that I got the V6 without knowing anything about car maintenance. If I had more information, I would have realized that it's very expensive replacing the timing belt, which has to be done every 7 years or risk ruining the engine. On the other hand, the 4 cylinder model has a timing chain with (I gather) no maintenance.
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(like the pretty much imaginary $6K transmission)
Yeah, transmission replacements tend to not cost that much. I'm not sure where you got that from.
(if you're going to snipe at me at least do so based on what I actually said)
I got the $6K figure from your earlier post. I bought a 2007 Toyota Camry with 93,000 miles on it for $12,000. I could have purchased a brand new Camry for $18,000. Up front I saved that $6000, but most of that $6000 goes up in smoke if the transmission eats itself.
As to why I say that price is pretty much imaginary... Well, you could take it to the dealership, and I'm sure they'd be happy to charge you close to that for a brand-new replacement. But as Mustachians, we fix things like that by going to the salvage yard, where you can find a transmission for $500 or so http://car-part.com/cgi-bin/search.cgi Then we either do the work ourselves, or get a friend to do it for much less than dealer shop rates. So instead of nearly $6000, you're looking at something like $1000 or so.
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I think the sweet spot is just over 100K miles on a well built model. People still irrationally believe that 100K is some magical cutoff where things start going wrong. But cars today are made much better than in the past and 100K should only be 1/2 to 1/3 of the life of a car.
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And why would you buy such a ridiculous car in the first place?
That's a pretty aggressive judgement to be making. What makes that ridiculous and why should anyone care what you think?
You realize that many basic cars are coming with smaller engines and turbochargers these days, right?
It is judgemental, so shoot me :)
This is MMM, not a car enthusiasts forum. None of our vehicles are newer than 2005. Both are high milage, the most recent was bought last year, with more than 200,000km on it. It should see another 200,000km, with nothing more than minor repairs and regular maintenance.
The other car we bought 2 years ago, is also a 2005 (Yaris) and it had no freaking engine in it, and had to be towed off a driveway. It was $1400, and had more than 290,000km on it. It clearly hadn't been well maintained (no oil changes in the last 100,000km, which instigated the melting and fusing of a lot of the engine components). Oh, and then we had a *disaster* with it this summer, when it needed a new $68 water pump! The horror!
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(like the pretty much imaginary $6K transmission)
Yeah, transmission replacements tend to not cost that much. I'm not sure where you got that from.
(if you're going to snipe at me at least do so based on what I actually said)
I got the $6K figure from your earlier post.
I bought a 2007 Toyota Camry with 93,000 miles on it for $12,000. I could have purchased a brand new Camry for $18,000. Up front I saved that $6000, but most of that $6000 goes up in smoke if the transmission eats itself.
So I guess the words surrounding that number you chose to focus on are completely meaningless to you? Specifically the word "most" that suggests that I don't know the exact number, but that it could certainly be around or greater than half of that?
As to why I say that price is pretty much imaginary... Well, you could take it to the dealership, and I'm sure they'd be happy to charge you close to that for a brand-new replacement. But as Mustachians, we fix things like that by going to the salvage yard, where you can find a transmission for $500 or so http://car-part.com/cgi-bin/search.cgi Then we either do the work ourselves, or get a friend to do it for much less than dealer shop rates. So instead of nearly $6000, you're looking at something like $1000 or so.
Right so lets say that I'm deployed to the other side of the world, a very real possibility in my line of work. Do you think my wife is going to go to a pick-a-part yard to pluck a transmission to install in the garage herself?
Do you not see how you can't just apply your situation to everybody else?
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So apparently my idea that buying a new car might be a better option is a very unpopular one.
The core of my point is that you have to analyze your own situation and make the best decision on what your specific needs are. To flat out write off an idea without even asking the question is about as bad as refusing to purchasing anything other than a brand new car.
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I think the sweet spot is just over 100K miles on a well built model. People still irrationally believe that 100K is some magical cutoff where things start going wrong. But cars today are made much better than in the past and 100K should only be 1/2 to 1/3 of the life of a car.
This. I don't see how the "sweet spot" could be anything less... unless you are talking about an older model that has depreciated simply due to age.
There's also this http://en.m.wikipedia.org/wiki/The_Market_for_Lemons
And the fact that in the last few years, the new car premium was severely reduced (not sure if it still is - this was during the aftermath of financial crisis where used cars were in higher demand and manufacturers were hurting for sales)
You can get a brand new Altima, Camry, or Fusion for $18,000, right now. The going rate for a used Camry or Altima with ~75,000 miles is in the area of $12,000 to $13,000. You can get a better deal on a used Fusion if you like the car.
Right now used car prices seem to be somewhat inflated, which makes buying a brand new one a potentially better long term option. It hasn't always been this way, but if you can see far enough ahead to know that you're going to keep the car for a very long time, a brand new $18,000 Camry or Altima could be a great value for your money.
The only reason my wife and I didn't go this route was because we didn't have the cash to cover it like we did for the car we chose, and we weren't certain that the car was going to meet our needs for more than five years... so we rolled the dice on the used one.
You can buy a ~100k mile '02 Camry/Alitma/Whatever for $4-6K. Drive it for 100k+ miles and sell it for like $3K. Rinse and repeat.
I paid $3000 for my car several years ago. It had 100k miles on it. Now its a little over 140k, and should be worth around $2500. I'll sell it at 200k* for like $1800.
*I'll probably get bored of it and sell it before then, but I like to think that maybe one day I'll keep a car longer than 2 years.
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You can buy a ~100k mile '02 Camry/Alitma/Whatever for $4-6K. Drive it for 100k+ miles and sell it for like $3K. Rinse and repeat.
I paid $3000 for my car several years ago. It had 100k miles on it. Now its a little over 140k, and should be worth around $2500. I'll sell it at 200k* for like $1800.
*I'll probably get bored of it and sell it before then, but I like to think that maybe one day I'll keep a car longer than 2 years.
Finding a 12 year old car whose owners only put an average of 7142 miles per year on is not as easy as it sounds. They exist, but they're certainly not common.
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You can buy a ~100k mile '02 Camry/Alitma/Whatever for $4-6K. Drive it for 100k+ miles and sell it for like $3K. Rinse and repeat.
I paid $3000 for my car several years ago. It had 100k miles on it. Now its a little over 140k, and should be worth around $2500. I'll sell it at 200k* for like $1800.
*I'll probably get bored of it and sell it before then, but I like to think that maybe one day I'll keep a car longer than 2 years.
Finding a 12 year old car whose owners only put an average of 7142 miles per year on is not as easy as it sounds. They exist, but they're certainly not common.
Indeed, those cars are rare, but 18 out of 20 Toyotas sold in the last 10 years, are still on the road. Personally, I prefer a higher milage vehicle myself, in the $2-3000 range.
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My 2003 has around 70k miles.
Not sure if I should be proud of that or ashamed. Probably a little of both.
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Indeed, those cars are rare, but 18 out of 20 Toyotas sold in the last 10 years, are still on the road. Personally, I prefer a higher milage vehicle myself, in the $2-3000 range.
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So I guess the words surrounding that number you chose to focus on are completely meaningless to you? Specifically the word "most" that suggests that I don't know the exact number, but that it could certainly be around or greater than half of that?
Sure. So I guess that you can't understand that I've implicitly included that context, but don't choose to spend time & space carefully duplicating every word you type. The point is that while 'most of' might be $5k, or even $4K, it certainly isn't the more reasonable $1-2K.
Right so lets say that I'm deployed to the other side of the world, a very real possibility in my line of work. Do you think my wife is going to go to a pick-a-part yard to pluck a transmission to install in the garage herself?
I don't see why not. Is this not the 21st century, in which women ought to be as capable of any task as a man? (And vice versa, of course: if your wife was away, could you figure out how to cook & clean for yourself?) It's also fairly easy to find independent mechanics who'd do the job of getting & installing a used transmission for far less than a dealer.
So apparently my idea that buying a new car might be a better option is a very unpopular one.
It's not that it's unpopular, it's simply that when you do a logical analysis, that's the way thn numbers work out :-)
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Sure. So I guess that you can't understand that I've implicitly included that context, but don't choose to spend time & space carefully duplicating every word you type. The point is that while 'most of' might be $5k, or even $4K, it certainly isn't the more reasonable $1-2K.
You were very specific in what you chose to focus on. Given that it was a small snippet in a large post, it gives others the impression that that's what I mean. If you don't like being called out for being deceptive, don't be deceptive.
I don't see why not. Is this not the 21st century, in which women ought to be as capable of any task as a man? (And vice versa, of course: if your wife was away, could you figure out how to cook & clean for yourself?) It's also fairly easy to find independent mechanics who'd do the job of getting & installing a used transmission for far less than a dealer.
I DO see why not, because asking a woman who is dealing with the stress of living without the support of her spouse for months to a year to go to a junkyard to pull a very large and heavy part out of a car and have her figure out how to install it to save a couple thousand dollars is beyond selfish. Have you ever pulled a transmission out of a car before? I'm going to say with near certainty that you have not, because it is a fair bit more involved than making waffles or mopping the floor. That you would actually suggest this as an option makes me believe that you're less interested in exchanging ideas and more interested in winning an argument.
Yes, it's more likely that in that event I would do some research and direct her to an independent shop to get the work completed. But that still means that it's likely to cost anywhere between $2000 to $4000.
It's not that it's unpopular, it's simply that when you do a logical analysis, that's the way thn numbers work out :-)
I wish my world were so black and white, it sure would be a lot easier to live in.
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Nice to find someone who also believes new cars are a logical and cost effective choice. Especially with factory rebates, you can buy a new car with a warranty for LESS than the same model car several years old. Plus you get the benefit of knowing the history. In the few instances we have looked for a car, we considered both used and new, but couldn't find a cost benefit to buying used.
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Nice to find someone who also believes new cars are a logical and cost effective choice. Especially with factory rebates, you can buy a new car with a warranty for LESS than the same model car several years old. Plus you get the benefit of knowing the history. In the few instances we have looked for a car, we considered both used and new, but couldn't find a cost benefit to buying used.
The premium for a new car vs. an almost new used car (at least the ones I've considered) doesn't seem so significant, and although I would expect that on average buying an older used car would work out to be less expensive, (1) I'm likely only buying 1 every decade or so, so the "averages" aren't the only thing I consider---there's also the desire to minimize the risk of having a much worse than average outcome---and (2) continuous reliability is important to me, and generally seems likelier with a newer car. That I could resurrect my dormant mechanical skills and fix many problems on a used car, or even pay someone to fix any problem at lower total cost than having a newer car, doesn't fully address the fact that any number of scenarios involving car trouble can present immediate headaches that I'd like to avoid, even if they can ultimately be cured. We have one car, and two small kids, and minimizing the odds of getting a call from my wife about car trouble when she's out with them has some value to me.
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My 2 cents: used cars are no longer a great deal over buying new. The prices are ridiculous.
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Yes, it's more likely that in that event I would do some research and direct her to an independent shop to get the work completed. But that still means that it's likely to cost anywhere between $2000 to $4000.
Ok, lets say the chances of your used car having a catastrophic transmission failure are astronomically high, and every used car will need one between 100k and 200k miles.
$5000 used car + say $2000 in average repairs over the next 100k miles, a massive $3000 transmission repair bill and finally the car is resold for $3000 = $7000/100k miles
A new $20000 car sold for $3000 @ 200k which miraculously needs no repairs whatsoever would still cost $8500/100k miles, NOT including the time-value of the additional $15000 outlay at the beginning.
We can all agree that the above is an extremely optimistic view of new cars, yet they still fail to compete with used cars financially.
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Yes, it's more likely that in that event I would do some research and direct her to an independent shop to get the work completed. But that still means that it's likely to cost anywhere between $2000 to $4000.
Ok, lets say the chances of your used car having a catastrophic transmission failure are astronomically high, and every used car will need one between 100k and 200k miles.
$5000 used car + say $2000 in average repairs over the next 100k miles, a massive $3000 transmission repair bill and finally the car is resold for $3000 = $7000/100k miles
A new $20000 car sold for $3000 @ 200k which miraculously needs no repairs whatsoever would still cost $8500/100k miles, NOT including the time-value of the additional $15000 outlay at the beginning.
We can all agree that the above is an extremely optimistic view of new cars, yet they still fail to compete with used cars financially.
So in your engineered scenario the premium you pay for a brand new car is $1500 every 100,000 miles? That sounds like an absolute bargain. The safety features alone in a brand new car are worth that to me (I love my wife, and I'm willing to pay a reasonable amount of money to protect her), and the massive increase in fuel economy in even a car as big as a Nissan Altima will likely save you nearly that much over the course of 100,000 miles.
Given that a brand new Nissan Altima (or Camry, or Fusion) can be purchased for $18,000, you're now paying extra (factoring in fuel costs and resale) for the privilege of driving a used car, in your scenario. Then, since you're factoring resale into this, you sell the car.
What I'll give you is that it's not guaranteed that your $5000 car will need a new transmission. But it is guaranteed that the used car will need a fair amount of maintenance (if it were 100% up to date the car would cost more than $5000). If you do all the maintenance on a car you purchased brand new you'll enhance the amount of money you could get selling it... and at that point, this is not even a fair comparison, even if the transmission on your used car doesn't fail and it stays 100% reliable.
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I like driving beaters, easy~ish to work on, tons of parts both OEM and OEM-equivalent plus junkyard parts. Competitive market in the bottom end of the spectrum from private sellers so your cash in hand takes you pretty far if you are flexible. I find it tough to beat the value in my eyes of a 92-95 hatchback civic manual for anywhere between 500 to 2000 dollars with 32mpg (easily with manual trans) and a wide assortment of parts. They are cheap enough that I can own 2-3 vehicles with ease, and insurance is cheap enough where I live that I can get away with that.
End of the day I do most of my own work and enjoy it. I reinvest savings into more tools and look forward to a lifetime of DIY automotive work. I consider myself to be saving 90/hr after tax income (my mechanics shop rate) plus his markup on materials which I assume to be 200% + shipping (they get same day delivery from parts services, buy local parts which commands somewhat of a premium and get to mark them up). They have major overheads to cover, mechanic wages are high in my town, so is commercial rent/building values.
I don't make anywhere near 90/hr after tax so this is one of the best investments I can do, driving beaters and fixing them. I buy an old car and basically assume it will need new pads, possibly rotors, wheel bearings, tie rods, shocks and do as much as possible. Every vehicle I learn more. When I have a house with a garage I'll be able to do even more. Some jobs I'll always have to farm out to a mechanic like wheel bearings, but my long term goal is to be able to do 95% of automotive jobs myself with my own tools. I'll setup my home workshop with air tools and an oxy/acetylene torch for removing the most stubborn fasteners. I truely believe in the value of working on your own vehicles and I don't have much in common with consumers who want to gamble 10-20k away just to pray they get some magic car that needs no maintenance/time in the shop.
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I've been argued into a corner. My position is not that buying a brand new car is *the* right choice. I would even say in most situations it isn't the right choice, especially if you have to finance it and factor in the extra cost that goes along with that.
What I'm saying here is that the right choice is highly dependent on your situation and where you're at in life. If you're 45 years old, retired, with a house that has a garage with tools and you're willing and able to maintain and repair an older car.... a used vehicle should certainly save you money. But not everybody lives in that box, what if you're 60-65 years old with some physical issues that make it difficult or painful to do that kind of work?
There is no one right answer here.
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I agree and there is some value (especially now) in new cars as dealers seem desperate. People just aren't buying as many cars anymore (at least that's how I perceive it).
Taking an 18k car from 0 to 200,000 miles with minimal issues is not bad, I don't know how far the warranty will take you and what is covered, and if you have to pay for routine service (I will probably never find out first hand). I've done work at a dealership, a big remodel where they were building a new service building to keep up with demand. They are shiny and enticing. Even caught myself a few times thinking "I like that truck, ooh thats a nice car" and I'm frugal as hell.
My main issue with warranties is dealing with the dealers themselves. I find their shops to be shifty. I took a car to one in my earlier days and got $2300 quotes and $800 quotes from other mechanics explaining (even showing me with my car up on their lift) what the dealer "claimed" I needed vs showing me live in person. I found it shady I am absolutely barred from entering the service bays to see problems with my car. Problems you want me to pay thousands for.
It's well known dealers make no money now on new cars. Maybe 3-6% a car. They make money in 2 ways, creative financing and insane shop rates and inflated service work estimates. That is one disadvantage not listed to new cars, you leave your vehicle service at the mercy of the most expensive mechanics on the planet. And you kind of have to get work/service done there to honor your warranty. Many (IMO) will also nickel and dime you, ie: you changed your oil at 5100 miles not 5000, warranty void! Slight exageration but those are the kind of stunts I see them pulling.
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My theory on why used cars are clinging to their value at the moment is that there's some scarcity. Over the last recession new car sales slumped pretty dramatically. So that 75,000 mile Camry that should cost less than $10000 and actually be a good deal is currently hanging on for $12,000 or more (I JUST spent weeks shopping for and test driving Camrys, that's what they go for where I'm at), and that's for a sketchy example that either has incomplete service records or was a part of a rental fleet. Yeah, you can get a Camry for $5000 or $6000, but it has at least 150,000 miles and looks like it's lived a rough life.
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I've been argued into a corner. My position is not that buying a brand new car is *the* right choice. I would even say in most situations it isn't the right choice, especially if you have to finance it and factor in the extra cost that goes along with that.
What I'm saying here is that the right choice is highly dependent on your situation and where you're at in life. If you're 45 years old, retired, with a house that has a garage with tools and you're willing and able to maintain and repair an older car.... a used vehicle should certainly save you money. But not everybody lives in that box, what if you're 60-65 years old with some physical issues that make it difficult or painful to do that kind of work?
There is no one right answer here.
Nobody is arguing that it might not be the right choice for some people, but you were originally arguing that specifically it is CHEAPER. Which is only true under specific what-if situations. In reality it just is almost never the case over the long term
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So in your engineered scenario the premium you pay for a brand new car is $1500 every 100,000 miles? That sounds like an absolute bargain. The safety features alone in a brand new car are worth that to me (I love my wife, and I'm willing to pay a reasonable amount of money to protect her), and the massive increase in fuel economy in even a car as big as a Nissan Altima will likely save you nearly that much over the course of 100,000 miles.
if you value the simplicity of not having to do the maintenance more than you value $1500, it may be a bargain to you,but the point stands that the used car IS cheaper.
And come on, is there really that much of a difference in fuel economy and safety between a 2014 altima and, say, a 2006 altima?
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I've been argued into a corner. My position is not that buying a brand new car is *the* right choice. I would even say in most situations it isn't the right choice, especially if you have to finance it and factor in the extra cost that goes along with that.
What I'm saying here is that the right choice is highly dependent on your situation and where you're at in life. If you're 45 years old, retired, with a house that has a garage with tools and you're willing and able to maintain and repair an older car.... a used vehicle should certainly save you money. But not everybody lives in that box, what if you're 60-65 years old with some physical issues that make it difficult or painful to do that kind of work?
There is no one right answer here.
Nobody is arguing that it might not be the right choice for some people, but you were originally arguing that specifically it is CHEAPER. Which is only true under specific what-if situations. In reality it just is almost never the case over the long term
I was never arguing that it was cheaper. I was arguing that it can be cheaper.
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So in your engineered scenario the premium you pay for a brand new car is $1500 every 100,000 miles? That sounds like an absolute bargain. The safety features alone in a brand new car are worth that to me (I love my wife, and I'm willing to pay a reasonable amount of money to protect her), and the massive increase in fuel economy in even a car as big as a Nissan Altima will likely save you nearly that much over the course of 100,000 miles.
if you value the simplicity of not having to do the maintenance more than you value $1500, it may be a bargain to you,but the point stands that the used car IS cheaper.
And come on, is there really that much of a difference in fuel economy and safety between a 2014 altima and, say, a 2006 altima?
I value the enhanced safety of my family more than I value $1500 over the course of five years.
...and yes, the fuel economy difference is drastic. A 2006 Altima gets 27 mpg on the highway, and at 20,000 miles a year costs $2333.33 ($3.15 a gallon for fuel, last price I paid). A 2014 Altima gets 38 mpg on the highway, costing you $1657.89. That's a difference of $675.44 a year, or $3377.17 over the course of 100,000 miles (assuming gas prices don't go up, which isn't likely).
So again, you're paying more to drive an older car, held to a lower safety standard, even if the transmission in the old car doesn't eat itself.
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...asking a woman who is dealing with the stress of living without the support of her spouse for months to a year to go to a junkyard to pull a very large and heavy part out of a car...
You may not have noticed that the link I posted is for parts pulled off the car already, which the salvage yard will ship to you.
Have you ever pulled a transmission out of a car before? I'm going to say with near certainty that you have not, because it is a fair bit more involved than making waffles or mopping the floor.
You'd be way wrong. I think I was about 17 or 18 when I did my first, and in the years since have pulled transmissions (and engine/transmision as a unit, which is often easier) from vehicles ranging from an Austin-Healey Sprite to a D7 Cat. Honestly, most are not all that hard, and the hard cases might be easier for a woman, since the problem is limited access to bolts.
That you would actually suggest this as an option makes me believe that you're less interested in exchanging ideas and more interested in winning an argument.
Heck, I didn't even realize we were having an argument. I thought we were having a discussion about how to minimize car costs.
Yes, it's more likely that in that event I would do some research and direct her to an independent shop to get the work completed. But that still means that it's likely to cost anywhere between $2000 to $4000.
OK, so multiply that number by the (small) probablility that the transmission (or any other major part) will fail, to get your expected cost.
I wish my world were so black and white, it sure would be a lot easier to live in.
It's not the world that's black & white, it's the purely financial question that you originally asked. You are the one choosing to drag in all sorts of unquantifiable other factors to try to justify the choice you want to make. Which of course is your privilege: if you want a particular sort of car (and can afford it), then go for it. (Just as I, for instance, would never buy a 4-door sedan or a car with automatic transmission, even if it worked out to be the least expensive option.) Just don't try to lie to yourself, or to us, about your choice being the financial 'sweet spot'.
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...and yes, the fuel economy difference is drastic. A 2006 Altima gets 27 mpg on the highway, and at 20,000 miles a year costs $2333.33 ($3.15 a gallon for fuel, last price I paid). A 2014 Altima gets 38 mpg on the highway, costing you $1657.89.
But the 2014 and 2006 Altimas are not at all the same car. It's a fact that you can buy 2006 model year cars that will get 38 mpg, or better.
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...and yes, the fuel economy difference is drastic. A 2006 Altima gets 27 mpg on the highway, and at 20,000 miles a year costs $2333.33 ($3.15 a gallon for fuel, last price I paid). A 2014 Altima gets 38 mpg on the highway, costing you $1657.89.
But the 2014 and 2006 Altimas are not at all the same car. It's a fact that you can buy 2006 model year cars that will get 38 mpg, or better.
I don't understand this comment. What 2006 Altima gets 38 mpg?
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I was never arguing that it was cheaper. I was arguing that it can be cheaper.
Geez, of course it CAN be, just like it CAN actually benefit you in certain crash conditions to not be wearing a seatbelt. But we are trying to find actionable data here, so I choose to focus on the situation that is true the vast majority of the time.
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...and yes, the fuel economy difference is drastic. A 2006 Altima gets 27 mpg on the highway, and at 20,000 miles a year costs $2333.33 ($3.15 a gallon for fuel, last price I paid). A 2014 Altima gets 38 mpg on the highway, costing you $1657.89.
But the 2014 and 2006 Altimas are not at all the same car. It's a fact that you can buy 2006 model year cars that will get 38 mpg, or better.
I don't understand this comment. What 2006 Altima gets 38 mpg?
He was saying that you can find other cars that old that get that mileage. but as i'm sure you are waiting to point out, while true it isn't really relevant to the discussion.
We have to compare the same car or none of these arguments make sense. Otherwise you could say it's cheaper to buy a brand new civic than a 5 year old benz.
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I value the enhanced safety of my family more than I value $1500 over the course of five years.
Fine, but irrelevant.
You are just moving the target now. The whole point of this thread was to talk about which was cheaper. You originally argued that it can be cheaper to buy a new car. Now you are just arguing that you would rather pay more for a safer car.
...and yes, the fuel economy difference is drastic. A 2006 Altima gets 27 mpg on the highway, and at 20,000 miles a year costs $2333.33 ($3.15 a gallon for fuel, last price I paid). A 2014 Altima gets 38 mpg on the highway, costing you $1657.89. That's a difference of $675.44 a year, or $3377.17 over the course of 100,000 miles (assuming gas prices don't go up, which isn't likely).
I'll give you that one, That is surprisingly large difference. Not sure if most models have that big of a disparity over the last 8 years, but maybe.
Although it is interesting that you would choose a yearly mileage that is almost twice the national average (and even farther away from average mustachian driving). For people driving 8 thousand miles a year the cost difference is about 300 bucks a year. Still significant though.
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He was saying that you can find other cars that old that get that mileage. but as i'm sure you are waiting to point out, while true it isn't really relevant to the discussion.
We have to compare the same car or none of these arguments make sense. Otherwise you could say it's cheaper to buy a brand new civic than a 5 year old benz.
Oh, I see. Yes, I agree with you that you have to compare comparable cars (tautology alert!)
Personally, I'm interested in this discussion because I may soon be facing the same decision. The "old" personal finance advice of buying 2-3 year old cars instead of new hasn't been financially advantageous any time in the last 5 years or so that I've looked. I can see why the "beater" car strategy is financially advantageous, especially if you can do repairs yourself. But I've tried to look into failure rates for that sort of beater car to figure out how likely it is to get a lemon, and I haven't had much luck finding that sort of data.
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I value the enhanced safety of my family more than I value $1500 over the course of five years.
Fine, but irrelevant.
You are just moving the target now. The whole point of this thread was to talk about which was cheaper. You originally argued that it can be cheaper to buy a new car. Now you are just arguing that you would rather pay more for a safer car.
He didn't say cheaper, he said "can be cost effective"
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He didn't say cheaper, he said "can be cost effective"
I was never arguing that it was cheaper. I was arguing that it can be cheaper.
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Personally, I'm interested in this discussion because I may soon be facing the same decision. The "old" personal finance advice of buying 2-3 year old cars instead of new hasn't been financially advantageous any time in the last 5 years or so that I've looked. I can see why the "beater" car strategy is financially advantageous, especially if you can do repairs yourself. But I've tried to look into failure rates for that sort of beater car to figure out how likely it is to get a lemon, and I haven't had much luck finding that sort of data.
I've never been a fan of the 'beater' strategy myself either, simply because there are other costs involved with breakdowns that aren't normally included with maintenance costs (missing work, quality of life, etc)
I do still think the numbers are in favor of getting a used car, just not a REALLY used car. Buying a car a year old with like 8k miles still usually gives a discount that is usually disproportionately large in relation to the minimal increase in risk of breakdown versus a brand new car.
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He didn't say cheaper, he said "can be cost effective"
I was never arguing that it was cheaper. I was arguing that it can be cheaper.
Ha! You are right... but I think he meant to say cost effective since a) that's the first thing he said and b) that interpretation is consistent with his argument that it's worth paying a bit more for safety
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Personally, I'm interested in this discussion because I may soon be facing the same decision. The "old" personal finance advice of buying 2-3 year old cars instead of new hasn't been financially advantageous any time in the last 5 years or so that I've looked. I can see why the "beater" car strategy is financially advantageous, especially if you can do repairs yourself. But I've tried to look into failure rates for that sort of beater car to figure out how likely it is to get a lemon, and I haven't had much luck finding that sort of data.
I've never been a fan of the 'beater' strategy myself either, simply because there are other costs involved with breakdowns that aren't normally included with maintenance costs (missing work, quality of life, etc)
I do still think the numbers are in favor of getting a used car, just not a REALLY used car. Buying a car a year old with like 8k miles still usually gives a discount that is usually disproportionately large in relation to the minimal increase in risk of breakdown versus a brand new car.
Yeah, I've never been able to find that mythical 1 year old used car in the base model. Every time I've looked, I see ~2 year old cars with all sorts of extra packages that I don't need, that are more expensive than the current year base model. Am I just looking in the wrong place?
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Ha! You are right... but I think he meant to say cost effective since a) that's the first thing he said and b) that interpretation is consistent with his argument that it's worth paying a bit more for safety
Sure, I think you're right. He said both, and I'm assuming he meant both.
The reason I focused on the 'cheaper' part was because that is what the thread was about. While it's true that he thinks it's worth paying more for safety, its not really relevant to the thread any more than somebody saying its worth paying more for a better sound system or higher passenger capacity.
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Yeah, I've never been able to find that mythical 1 year old used car in the base model. Every time I've looked, I see ~2 year old cars with all sorts of extra packages that I don't need, that are more expensive than the current year base model. Am I just looking in the wrong place?
Hard to say. There definitely aren't an abundance of people giving up their one year old cars, so you have to look around. There is a place local to me that seems to specialize in that type of situation though, and my GF has purchased a Nissan Sentra from them that was only a year old with less than 10k miles. Not sure if it was the totally basic model though.
Sorry I don't have more tips for you.
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Ha! You are right... but I think he meant to say cost effective since a) that's the first thing he said and b) that interpretation is consistent with his argument that it's worth paying a bit more for safety
Sure, I think you're right. He said both, and I'm assuming he meant both.
The reason I focused on the 'cheaper' part was because that is what the thread was about. While it's true that he thinks it's worth paying more for safety, its not really relevant to the thread any more than somebody saying its worth paying more for a better sound system or higher passenger capacity.
To be fair, you did ask about the "sweet spot" and "best bargain," which could easily be interpreted as a value proposition vs. absolute cost.
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To be fair, you did ask about the "sweet spot" and "best bargain," which could easily be interpreted as a value proposition vs. absolute cost.
I dunno man, I think that's reaching a bit. This is the first thing I wrote:
I'm not currently on the market myself, but just something I have been contemplating. Buying cheap used cars is one of the pillars of mustachianism (if you must have a car at all), so what is the "sweet spot" in terms of age and mileage where you are getting the maximum discount?
I specifically asked for a maximum discount in terms of age and mileage.
value proposition vs. absolute cost is good to consider, it's just not what I was asking.
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For me the sweet spot is 4 years old and mileage does not matter much.
Winter salt is hard on rust so 10+ years old cars usually already started having issues.
I don't do much mileage in a year so a high mileage car would work for me.
Other things I look for:
Separate winter/summer tires are mandatory here so that's an expense. Don't want to buy a very old car that dies because resale value on tires is really bad.
Some cars need expensive timing belt maintenance at 60k miles. I factor this into the price or try to buy one that already had it done.
I could save some more by getting a 6-7 years old car and going through a single cycle of tires. I'd pay less upfront but more in maintenance and I really hate going to the garage. For me changing cars less often is worth it.
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You may not have noticed that the link I posted is for parts pulled off the car already, which the salvage yard will ship to you.
Ship both the transmission and the car overseas to me to install it and then ship it back? ....or ship it to my wife to figure out how to install herself? You're only addressing half of the problem.
You'd be way wrong. I think I was about 17 or 18 when I did my first, and in the years since have pulled transmissions (and engine/transmision as a unit, which is often easier) from vehicles ranging from an Austin-Healey Sprite to a D7 Cat. Honestly, most are not all that hard, and the hard cases might be easier for a woman, since the problem is limited access to bolts.
You'd be a great candidate for the show 'Extreme Cheapskates'. Because they could easily write an entire episode about a man who would ask his wife to change out a transmission in their car under those conditions.
Heck, I didn't even realize we were having an argument. I thought we were having a discussion about how to minimize car costs.
It's not a discussion when you completely dismiss other ideas without attempting to understand the circumstances under which those idea could be advantageous.
It's not the world that's black & white, it's the purely financial question that you originally asked. You are the one choosing to drag in all sorts of unquantifiable other factors to try to justify the choice you want to make. Which of course is your privilege: if you want a particular sort of car (and can afford it), then go for it. (Just as I, for instance, would never buy a 4-door sedan or a car with automatic transmission, even if it worked out to be the least expensive option.) Just don't try to lie to yourself, or to us, about your choice being the financial 'sweet spot'.
Those "unquantifiable other factors" are what make this world shades of gray. Without "unquantifiable other factors" the world is that perfect black and white where everything can be determined to be right or wrong before exploring context and asking further questions.
To suggest that your way is the only way for every person's situation and that it is always cheaper no matter what is absolutely, and completely arrogant.
Different people have different situations and needs, to not even try to understand what those are before giving advice is leading people towards the wrong decision.
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Geez, of course it CAN be, just like it CAN actually benefit you in certain crash conditions to not be wearing a seatbelt. But we are trying to find actionable data here, so I choose to focus on the situation that is true the vast majority of the time.
You're right, if you don't have the cash to purchase the car up front and you're taking away from other things... it absolutely is the equivalent of conditions where it could have been favorable to not wear a seatbelt.
But not everyone is at that stage. Some have the cash up front to pay for that new car and enjoy the long term benefits without a huge financial penalty.
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Fine, but irrelevant.
You are just moving the target now. The whole point of this thread was to talk about which was cheaper. You originally argued that it can be cheaper to buy a new car. Now you are just arguing that you would rather pay more for a safer car.
I mentioned that as an aside. It's an added bonus which has value. How much value is up to you to determine, but when I go into detail on fuel savings which make up the $1500 I didn't intend for anyone to dwell on the safety point too long. I only mention it because it is a valid consideration when choosing a vehicle.
I'll give you that one, That is surprisingly large difference. Not sure if most models have that big of a disparity over the last 8 years, but maybe.
Although it is interesting that you would choose a yearly mileage that is almost twice the national average (and even farther away from average mustachian driving). For people driving 8 thousand miles a year the cost difference is about 300 bucks a year. Still significant though.
I chose 20,000 to make the numbers neat and tidy. Slice it up any way you wish, but I thought our baseline was in miles driven. If it takes longer for you to drive that 100,000 miles it likely ends up costing more, as the price of fuel will probably only go up over the years.
The difference depends entirely on the model. The biggest gains seem to have come via mid sized sedans, although some economy class cars have made big improvements as well. Take the Honda Fit for example, the difference is about 2 mpg (2007 model vs 2013), which clearly isn't drastic. If a Honda Fit meets your needs, it may be unwise to buy a brand new one over a 2007 model. It's the same thing with a Scion xB.
So it comes down to what your needs are.
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Great discussion. Would you mind giving your opinions on this scenario?
Bought a 2002 Toyota 4Runner(6 cyl.) new in Fall 2001. No extra options except rear heater. Paid $30k final price with everything.
Now has 342k miles on it. I drive 30k miles a year.
Just had to put a new catalytic converter in and did new shocks within the last 6 months.
Been trying to do some research into what would make more sense if I HAD to get another vehicle. Keep in mind, I'd prefer to drive the 4Runner indefinitely.
I love it the vehicle.
Looked at the Subaru Outback wagon and the Toyota Rav4 (4 cyclinders models)
I want better gas mileage and can certainly downsize a bit though I like having some height.
Would welcome your mathematical analysis on this one.
TIA
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Too bad this has devolved into such a pissing match.
The most interesting idea here is that prices of new and used cars, particularly at the low end of the price range, have converged in recent years. Historically, America has been the shrine to all things new and used cars have suffered crushing depreciation. This is not true in other places.
I bought a 2006 Subaru in Australia in 2008 at about a 15% savings over new and with five years warranty. A year later with the financial crisis settled in, brand new Outbacks dropped in price to what I paid! I owned the car 4.5 years, had no repairs on or off warranty, and sold it for 2/3 what I paid so no regrets.
There are some excellent arguments in this thread for paying a few thousand dollars more for a new car and getting benefit of the longer warranty as well as a better, safer, faster, cleaner, car which probably gets better gas mileage and gives greater peace of mind. In addition one can spec the car new to suit and crush dealers playing them off against one another. Insurance costs may be higher for the newer car, depending on whether you purchase collision or prefer to self insure for that.
If you really are handy with car repairs, you can probably turn that into a fun and profitable side gig either repairing or fixing and flipping. If you are into exotic cars, you can drive some pretty cool rides while making money on them.
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He didn't say cheaper, he said "can be cost effective"
I was never arguing that it was cheaper. I was arguing that it can be cheaper.
Ha! You are right... but I think he meant to say cost effective since a) that's the first thing he said and b) that interpretation is consistent with his argument that it's worth paying a bit more for safety
Thank you sir, this was my intention.
I got "cheap" stuck in my head because of the scenario that was engineered to compare the $5000 used car with the new one.
Great discussion. Would you mind giving your opinions on this scenario?
Bought a 2002 Toyota 4Runner(6 cyl.) new in Fall 2001. No extra options except rear heater. Paid $30k final price with everything.
Now has 342k miles on it. I drive 30k miles a year.
Just had to put a new catalytic converter in and did new shocks within the last 6 months.
Been trying to do some research into what would make more sense if I HAD to get another vehicle. Keep in mind, I'd prefer to drive the 4Runner indefinitely.
I love it the vehicle.
Looked at the Subaru Outback wagon and the Toyota Rav4 (4 cyclinders models)
I want better gas mileage and can certainly downsize a bit though I like having some height.
Would welcome your mathematical analysis on this one.
TIA
This is tricky because the question is basically going to be "at what point does my current vehicle cost more to keep on the road than what I would have to pay for a new(er) one?" So you have to figure out what the operating costs of your 4Runner are, to include everything from fuel economy to maintenance and repairs.
The general rule that people typically go by if they're trying to stretch the max value out of a car is that if it costs more per month on average to maintain and repair a vehicle than it does to pay for a car payment, it's best to buy a newer vehicle. Clearly you also want to factor in fuel costs as well. I am not suggesting that you get a car payment, this is just the easiest way I can think of to do this comparison. It applies even if you pay cash for whatever you replace your current vehicle with.
I think though, that after that analysis the conclusion you're likely to come to is that it's cheaper to just keep driving the 4Runner at least until something major fails.
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Thanks Mykl, that's pretty much what I thought.
I loathe having to replace vehicles and do so only when absolutely necessary.
Anyone else care to weigh in?
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I've only ever once bought a used vehicle off a car lot, the rest of the time (and we've owned 9 vehicles in the last 8 years) have been private sales. No sales tax, and you can negotiate.
I thought you had to pay HST on privately sold used cars here in Canada once you register them...?
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I look for cars that are 5-8 years old and have 30-50 thousand miles. Hopefully there is some cosmetic problem with the car that drives other buyers away. I also like to go to a dealer lot that doesn't specialize in the car I'm buying.
For example, I bought a Mercedes Benz at a Cadillac dealer for $10k with 32,000 miles with a hole on top of the trunk in 2008. I don't remember what I paid to plug the hole and repaint but i believe it was a few hundred dollars. 2008 was probably one of the best years to buy a car since everyone was afraid to spend money, the dealers were desperate.
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Too bad this has devolved into such a pissing match.
The most interesting idea here is that prices of new and used cars, particularly at the low end of the price range, have converged in recent years. Historically, America has been the shrine to all things new and used cars have suffered crushing depreciation. This is not true in other places.
So the question then would be how much of a discount would it take to make it "worth it" to take the used car over the brand new one?
I know it's going to depend on the individual and how they value the money vs the less maintenance.
For very reliable makes like toyota most issues (with a new or used car) aren't going to surface until much later in their life, like after 150K miles. So I guess if you are going to take a car until it's very last legs (250k miles or more) then it might make sense to pay an extra 2 grand or whatever to have the car from brand new and be able to take care of it properly all along.
While if you are going to cycle cars more regularly it would make sense to buy them a few years old (from 50k miles to 150K miles) because you aren't likely to still have the car at the point when the extra reliability is likely to come into play.
I guess I'm just not buying the argument that you have a lot more to worry about with a car that is one year old with 8,000 miles than you do with a new car. Not sure how to find any data on that though.
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Great discussion. Would you mind giving your opinions on this scenario?
Bought a 2002 Toyota 4Runner(6 cyl.) new in Fall 2001. No extra options except rear heater. Paid $30k final price with everything.
Now has 342k miles on it. I drive 30k miles a year.
Just had to put a new catalytic converter in and did new shocks within the last 6 months.
Been trying to do some research into what would make more sense if I HAD to get another vehicle. Keep in mind, I'd prefer to drive the 4Runner indefinitely.
I love it the vehicle.
Looked at the Subaru Outback wagon and the Toyota Rav4 (4 cyclinders models)
I want better gas mileage and can certainly downsize a bit though I like having some height.
Would welcome your mathematical analysis on this one.
TIA
doesn't sound like you have had any major mechanical issues with the truck though?
I would think it would be cheapest to keep driving it and pay for all minor and moderate repairs, and then evaluate the situation when its time for a big repair (new engine or transmission) that cost half as much as just buying another car.
This also depends on how reliable it is at that point. Even if it only cost 50 bucks to fix, if it is breaking down every week you would probably want to get a new car, as that could cause a lot of disruptions.
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I guess I'm just not buying the argument that you have a lot more to worry about with a car that is one year old with 8,000 miles than you do with a new car. Not sure how to find any data on that though.
As a rule you can probably rely on that one year old car with 8000 to 12000 miles to be as reliable and dependable as a brand new one (I won't muddy this post with exceptions).
But if you set out to get a deal on a one year old car, you certainly still want to be armed with the knowledge of exactly how much you could get the same exact car for brand new. If nothing else you get a little negotiating power that lets you remind the person you're dealing with how small the difference between their used car and a new one is to maybe get them to come off the price some.
The problem with Hondas and Toyotas is that the people selling them are less inclined to deal because they know that somebody is going to be happy to pay the premium, so there's a good chance that they'll let you walk to see if they can get somebody in who doesn't actually understand how small the difference is between their used car and a new one.
*edit* you should also consider what your time is worth to you. I spent a LOT of hours and money on gasoline going to different places to inspect and test drive cars to find the right one. If you're looking for a good deal on a one year old car and *if* the margin is already very slim, based on this consideration it could be a better idea to go new over a very lightly used car.
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Thanks Monk
Yeah, at the moment, all is holding up with it.
I figure, every month that I drive it and maintain it for less than a new car payment I'm doing well.
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I have wondere this same question many times, I would love to find something, drive it for a year or 2 and sell it for about the same.
A long time ago I bought a Chevy Berratta or however you spell that word. I bought it for 4,500 and sold it almost 2 years later for $4,700 I couldn't believe it, something about that car held it's value, I love driving it too, but I must have gotten a really good deal when I bought it, but I bought it from a dealer and sold it to another dealer, not a trade in but a sale.
I would love to do that over and over again, and again :)
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He was saying that you can find other cars that old that get that mileage. but as i'm sure you are waiting to point out, while true it isn't really relevant to the discussion.
We have to compare the same car or none of these arguments make sense.
That's just my point: they aren't the same car, they just have the same nameplate*. They're two styling/tech generations apart: http://en.wikipedia.org/wiki/Nissan_Altima
*Going a bit further, GM has been cranking out cars called the 'Chevy Impala' since 1958. Do you think the '58 model has much of anything in common with the 2014 version?
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That's just my point: they aren't the same car, they just have the same nameplate*. They're two styling/tech generations apart: http://en.wikipedia.org/wiki/Nissan_Altima
*Going a bit further, GM has been cranking out cars called the 'Chevy Impala' since 1958. Do you think the '58 model has much of anything in common with the 2014 version?
Funny you should mention the Impala...
Fun fact: GM is currently producing two completely different Impalas, one is the beautiful new redesigned Impala, and the other is the Impala "Limited" which is essentially a late model Impala that Chevrolet has chosen to keep in production for fleet sales.
The late model Impala is a solid car and generally reliable. You can usually pick these up for pretty cheap and run to the ground.
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Ship both the transmission and the car overseas to me to install it and then ship it back? ....or ship it to my wife to figure out how to install herself? You're only addressing half of the problem.
No, you're bringing in (even more) other factors that don't really apply to the cost argument. Yes, if you can't do a particular job yourself, you'll have to pay someone else to do it, and it will cost more. That applies whether it's changing a transmission, filling your gas tank, or eating out because you never learned to cook.
You'd be a great candidate for the show 'Extreme Cheapskates'. Because they could easily write an entire episode about a man who would ask his wife to change out a transmission in their car under those conditions.
There we are, sexism rearing it's ugly head again. I guess we come from different worlds, 'cause the idea of paying close to $6K for a transmission repair, or paying IIRC something like $15k for a car because you believe it might keep you from having to do a repair... Well, in my entire life (and I'm not exactly young)I've only ever owned one car that cost more than $3500 to buy.
It's not a discussion when you completely dismiss other ideas without attempting to understand the circumstances under which those idea could be advantageous.
No, I suppose not. But I thought we were in a forum, and a thread, where the cost-minimizing context is taken for granted. So yes, I can see where your ideas could be advantageous to those of a certain turn of mind. Carrying your logic a bit further, why shouldn't we consider how advantageous it would be to have chauffeurs to drive our Rolls-Royces for us?
The late model Impala is a solid car and generally reliable. You can usually pick these up for pretty cheap and run to the ground.
Well, there's another good example of us living in different worlds. 'Late model' just doesn't fit with my idea of cheap, any more than GM meshes with reliable.
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...
*edit*
Nevermind, we're done. I shouldn't have gotten caught up with you. Have a nice day.
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That's just my point: they aren't the same car, they just have the same nameplate*. They're two styling/tech generations apart: http://en.wikipedia.org/wiki/Nissan_Altima
*Going a bit further, GM has been cranking out cars called the 'Chevy Impala' since 1958. Do you think the '58 model has much of anything in common with the 2014 version?
to clarify, we have to compare the same MODEL
Yes the same model may be wildly different a few years apart, but that just factors into the central argument of this thread. The older car you get the more it will differ from the current version of that model, so you are getting 'more car' with the newer one, which is what Mykl was saying about safety features and fuel efficiency.
If a model changes so much over 5 years or so that they can no longer even be remotely comparable, then obviously that has to factor in to the calculations.
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The older car you get the more it will differ from the current version of that model, so you are getting 'more car' with the newer one, which is what Mykl was saying about safety features and fuel efficiency.
I don't agree about 'more', at least if you're defining more as improved. Different, yes (which was what I was saying :-)) It's not hard to think of models which have bulked up over the generations, adding size, weight, and bells & whistles while keeping the same name. For instance, compare today's Honda Civic to the Civics of a couple of decades ago.
Now whether you want those things or not is a matter of personal taste, but the point, in a Mustachian context, is that you're going to be paying more for them.
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I can easily see a 6k transmission repair rearing its head if you're a Volvo XC90 owner. Those things had issues.
Regarding the OP, my sweet spot is more of a threshold. I don't think I'd buy a car above ~120k again unless we were on a really tight budget. My last car, a Tercel, had around 169k on the clock when I bought it, and even though it only cost me around 1k every 29k miles to keep on the road, it still had a few different issues that I suspect popped up due to a lack of maintenance between 100k and 169k miles. I still kept it for ~30k miles. My next car, an Avalon, had 109k on the clock when buying it, and I've got a much better feeling about its long term reliability; not just because it's a Toyota, or a Toyota with exceptional reliability reviews, but because I'm sure I'll give it much better care between 110k and 170k than the average owner.
Our current cars have ~205k an ~112k on them and will be replaced in the next few years for safety upgrades; I'm one of those folks who's willing to spend significantly more for features like head airbags and ESC. Our next cars are probably going to be either a pair of SUVs or an SUV/minivan combo. My wife has higher mileage standards, and I think she'd prefer something with under 60k, so we'll probably spend more on that and less on mine. However, time will tell.
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The older car you get the more it will differ from the current version of that model, so you are getting 'more car' with the newer one, which is what Mykl was saying about safety features and fuel efficiency.
I don't agree about 'more', at least if you're defining more as improved. Different, yes (which was what I was saying :-)) It's not hard to think of models which have bulked up over the generations, adding size, weight, and bells & whistles while keeping the same name. For instance, compare today's Honda Civic to the Civics of a couple of decades ago.
Now whether you want those things or not is a matter of personal taste, but the point, in a Mustachian context, is that you're going to be paying more for them.
Yeah I tend to agree with you, I was just trying to summarize what some of the other posters were getting at. ALthough I will admit that the gas mileage improvements have been quite dramatic in some of the models (like the aforementioned Altima) I think the safety stuff is a little overrated, and most of the other improvements make the cars more enjoyable but not really better.
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I can easily see a 6k transmission repair rearing its head if you're a Volvo XC90 owner. Those things had issues.
Yeah its becoming more common today to with the CVTs.
My GFs sister had a basic nissan versa and the trans went out, and it unfortunately had a Continuously Variable Transmission and would have been like 6K to fix. And that's on a car that is maybe 17k brand new.
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I wonder how electric cars will change this analysis. If I need a new car in, say, 10 years, it might be a hard choice between a 10 year old early-gen electric and a more modern version. Or a 10 year old ICE.
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I wonder how electric cars will change this analysis. If I need a new car in, say, 10 years, it might be a hard choice between a 10 year old early-gen electric and a more modern version. Or a 10 year old ICE.
I'm interested to find out.
Electric cars will surely make huge performance gains over the next 10 years, which is great. More power, more range, etc. BUT, that might de-value the early cars very quickly meaning I could pick up a current Leaf for pennies. And that would meet my needs just fine.
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I'd say the sweet spot is about 10 years old / 100k miles. Buy from an individual, drive for another 100k miles, junk when it dies or when some idiot runs into me (the latter situation has resulted in a profit on two occasions, when the idiot's insurance paid out more than I'd paid for the car).
This cycle can be maintained, easily, with $2,000-2,500* cars, if you're willing to put a couple hundred dollars of parts and two or three weekend days a year into upkeep. You have to know enough to do the upkeep, which also translates to knowing enough to tell if a car you're considering has major current problems (and don't buy if the engine has recently been pressure washed).
I don't know whether the 10 year / 100k model would work somewhere that roads have to be salted, but I don't intend to find out for entirely non-car-related reasons. :-)
* Now. When I started driving, this was probably $700-$800 cars, but I'm old.
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I'd say the sweet spot is about 10 years old / 100k miles. Buy from an individual, drive for another 100k miles, junk when it dies or when some idiot runs into me (the latter situation has resulted in a profit on two occasions, when the idiot's insurance paid out more than I'd paid for the car).
This cycle can be maintained, easily, with $2,000-2,500* cars, if you're willing to put a couple hundred dollars of parts and two or three weekend days a year into upkeep. You have to know enough to do the upkeep, which also translates to knowing enough to tell if a car you're considering has major current problems (and don't buy if the engine has recently been pressure washed).
I don't know whether the 10 year / 100k model would work somewhere that roads have to be salted, but I don't intend to find out for entirely non-car-related reasons. :-)
* Now. When I started driving, this was probably $700-$800 cars, but I'm old.
Holy cow. What 10 year/100k mile car can you buy for $2500? Anyplace I've looked you're looking at cars twice that old/driven for that sort of price.
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I bought my '98 Saturn SL2 for $2750 with 100k miles on it in 2011 from a dealer. I just saw a SW2 with 75k on it on craigslist for $1700 yesterday. I want to pick it up badly.
I bet there are many cars not made by Toyota or Honda you could find in a similar situation.
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I'd say the sweet spot is about 10 years old / 100k miles. Buy from an individual, drive for another 100k miles, junk when it dies or when some idiot runs into me (the latter situation has resulted in a profit on two occasions, when the idiot's insurance paid out more than I'd paid for the car).
This cycle can be maintained, easily, with $2,000-2,500* cars, if you're willing to put a couple hundred dollars of parts and two or three weekend days a year into upkeep. You have to know enough to do the upkeep, which also translates to knowing enough to tell if a car you're considering has major current problems (and don't buy if the engine has recently been pressure washed).
I don't know whether the 10 year / 100k model would work somewhere that roads have to be salted, but I don't intend to find out for entirely non-car-related reasons. :-)
* Now. When I started driving, this was probably $700-$800 cars, but I'm old.
Holy cow. What 10 year/100k mile car can you buy for $2500? Anyplace I've looked you're looking at cars twice that old/driven for that sort of price.
Current 2003 Kia was $1200 with 90k, actually (bought last year, so it was ten years old then.) The totalled 2001 model Kia it replaced had been $1600 at 9 years old and 105k miles. That's the one I made a profit on from the insurance company, which paid out $2200 with us keeping the car. The last Honda Civic I bought was closer to 15 years old at the time (in 2006, and sadly my husband wrecked that one), but was $1250 and also just under 100k miles.
To get those prices, you usually have to go to individuals, not dealers, and I figure the $2,000-2500 range is more realistic than my actual experience. But those are my last three vehicles, including the current one.
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I'd say the sweet spot is about 10 years old / 100k miles. Buy from an individual, drive for another 100k miles, junk when it dies or when some idiot runs into me (the latter situation has resulted in a profit on two occasions, when the idiot's insurance paid out more than I'd paid for the car).
This cycle can be maintained, easily, with $2,000-2,500* cars, if you're willing to put a couple hundred dollars of parts and two or three weekend days a year into upkeep. You have to know enough to do the upkeep, which also translates to knowing enough to tell if a car you're considering has major current problems (and don't buy if the engine has recently been pressure washed).
I don't know whether the 10 year / 100k model would work somewhere that roads have to be salted, but I don't intend to find out for entirely non-car-related reasons. :-)
* Now. When I started driving, this was probably $700-$800 cars, but I'm old.
Holy cow. What 10 year/100k mile car can you buy for $2500? Anyplace I've looked you're looking at cars twice that old/driven for that sort of price.
That is cheap, but I'd be looking at base model kia.
Quick search on kijiji for Edmonton (prices in CDN dollars, cars listed in kilometers vs. miles). So I did a quick search for 2003-2005 (~roughly 10 years old). 100k miles is roughly 160,000km and most of these cars are a bit higher (180-220k) but prices are anywhere from 1500-2500 (that was the range I set to search).
Note you won't see many Toyota/Honda as they hold their value so well on the used car market (as do VW, Subaru from what I've noticed). Most anything else is fair game for rapid depreciation. That might also be the persons problem who is convinced a new car is best. If they are looking at Toyota, it very well might be in his situation.
Ask yourself what reasonable person buys a brand new Toyota, drives it for 10k and sells it the following year at a considerable loss? Where is the incentive here? Why not do a 2 year lease instead? How MANY people do you expect to own vehicles like this? And you want them to have full dealership paperwork of service performed, as if you will punish them with lowball offers if they don't have all this for you? These mythical people do not exist in my eyes. Nobody buys a brand new perfect vehicle and sells it for a 6-8k loss the next year. It's just stupid. You might find 1yr used cars from a rental fleet, or the odd person does exist who makes these stupid moves, but not enough to cover the demand from the used car market, especially the "high demand" honda civic, toyota corolla market.
Low demand - brand new Toyota Corolla. Dealers will give you huge incentives to buy. They were clearing out remaining 2013 models for 5 months on the radio.
High demand - used Toyota Corolla. Especially with complete service history, low mileage and mint condition. Such high demand they can ask damn close to retail price. It's like the apple iPad of used cars, you can crack the box, use it for a few months and still list it at 95% retail and people will scoop it up just to save the tax and convince themselves they don't need the warranty, receipt or packaging.
Anyways used cars can easily be had with 100k miles that are 10 years old for 2500 bucks, I found a bunch with a quick search in Canadian currency which is worth less then USD. Your dollar goes further, surely you can find one in a 2 second search on Craigslist. It just won't be a mint condition Honda Civic or Toyota Corolla. It will probably be a Saturn, Dodge, Kia, Pontiac, maybe a Hyundai, etc.
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Anyways used cars can easily be had with 100k miles that are 10 years old for 2500 bucks, I found a bunch with a quick search in Canadian currency which is worth less then USD. Your dollar goes further, surely you can find one in a 2 second search on Craigslist. It just won't be a mint condition Honda Civic or Toyota Corolla. It will probably be a Saturn, Dodge, Kia, Pontiac, maybe a Hyundai, etc.
Prices vary by region. It's a lot harder to find than a 2 second search on Craigslist.
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Anyways used cars can easily be had with 100k miles that are 10 years old for 2500 bucks, I found a bunch with a quick search in Canadian currency which is worth less then USD. Your dollar goes further, surely you can find one in a 2 second search on Craigslist. It just won't be a mint condition Honda Civic or Toyota Corolla. It will probably be a Saturn, Dodge, Kia, Pontiac, maybe a Hyundai, etc.
Prices vary by region. It's a lot harder to find than a 2 second search on Craigslist.
If the cost is that much higher in your region, consider whether it would be cost effective to search Craigslist a couple hundred miles away and drive out on a weekend with a friend or SO to test drive a few and hopefully drive on back. Geographic arbitrage with vehicles.
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Anyways used cars can easily be had with 100k miles that are 10 years old for 2500 bucks, I found a bunch with a quick search in Canadian currency which is worth less then USD. Your dollar goes further, surely you can find one in a 2 second search on Craigslist. It just won't be a mint condition Honda Civic or Toyota Corolla. It will probably be a Saturn, Dodge, Kia, Pontiac, maybe a Hyundai, etc.
Prices vary by region. It's a lot harder to find than a 2 second search on Craigslist.
If the cost is that much higher in your region, consider whether it would be cost effective to search Craigslist a couple hundred miles away and drive out on a weekend with a friend or SO to test drive a few and hopefully drive on back. Geographic arbitrage with vehicles.
That is a nice, constructive suggestion. Thank you!
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I wonder how electric cars will change this analysis. If I need a new car in, say, 10 years, it might be a hard choice between a 10 year old early-gen electric and a more modern version. Or a 10 year old ICE.
I think the car that is going to change this is the Elio. Electric cars have a ways to go.
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There are some crazy listings on used cars out there. I was browsing craigslist today and I found a 2009 Honda Civic with 57000 miles listed for just under MSRP! Basically double what it's worth. Carmax also has a nice assortment of 2013 cars listed for more than the price of a new 2014, and you can't even negotiate with them to bring the price down.
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There are some crazy listings on used cars out there. I was browsing craigslist today and I found a 2009 Honda Civic with 57000 miles listed for just under MSRP! Basically double what it's worth. Carmax also has a nice assortment of 2013 cars listed for more than the price of a new 2014, and you can't even negotiate with them to bring the price down.
Carmax is terrible. I briefly browsed their lot to see what was available and you won't find a good deal there.
On the point of travelling to other areas.... this is a good idea but you have to keep one thing in mind.... don't travel so far that you feel obligated to buy the car no matter the condition just to justify the time and cost of having to travel to see it. Always be willing to walk away. This is a better option if you're looking for something less common doesn't pop up often in your region (typically people looking for older sports cars have to do this). If you're looking for something as mundane as a Corolla you're typically better off just looking at Craigslist and Autotrader every day until something pops up.
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My 2003 has around 70k miles.
Not sure if I should be proud of that or ashamed. Probably a little of both.
Don't worry, I junked my 1994 Altima in 2012 with 120 000kms on it (under 100k miles) Proves I have not been a car clown.
Rust had taken a large bite into structural steel :( Rust is very antimustachian IMO.
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Funny you should mention the Impala...
Fun fact: GM is currently producing two completely different Impalas, one is the beautiful new redesigned Impala, and the other is the Impala "Limited" which is essentially a late model Impala that Chevrolet has chosen to keep in production for fleet sales.
The late model Impala is a solid car and generally reliable. You can usually pick these up for pretty cheap and run to the ground.
I did not know this.
I have owned a few Ford Taurus cars over the years, had a 93, then a 92 SHO (for fun car), and currently a 2003 with 190k on it.
The great thing about the last generation Taurus before it had a brief discontinuation/reintroduction is that it was sold mainly as a fleet vehicle which destroyed the resale value of the car.
You could buy one year old, under 20k miles, former fleet cars for under 10k back in 2008/09. They had 'basic' luxuries like power windows/locks, but not leather, moonroofs, or anything fancy. My opinion at least is that while yes there is a gamble buying used that people thrashed on a car, in general even rentals are not terrorized like people want to believe. Rental car companies wouldn't make much money if every other person rented the car just to do high rev neutral drops in an automatic sedan that had to be replaced or out of service for transmission repairs.
Second, you can figure out what sort of fleet the car as actually in before sale just from a VIN check. Corporate fleets? Government fleets? Rental fleets? You can choose a comfort level from different fleets.
Similarly I would have no problem buying old Crown Vic PIs that some 50 year old detective was using to go around town to scenes rather than running bank robbers off the road.
Looks like I'll add Impalas to the list of cars to take a look for in a few years.
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Panther platform Fords (Crown Vic, Grand Marquis) are great budget cars. The 4.6 V-8 is pretty well known for being an extremely reliable/durable engine. There are so many of them floating around that parts are dirt cheap. I don't know if it's still true, but I remember a time when you could pick one up that had seen police fleet use for a $2000 to $3000, which came with some durability upgrades that you wouldn't find on the civilian version.
I think the main drawback would be operating costs. They come with relatively thirsty engines.
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I bought my truck when it was one year old and had only 12k miles on it at the time. It was (and still is) in brand new condition. Buying the same model brand new with the same options would've cost about $8k more. One year and 12k miles is a negligible difference in wear and tear and reliability. So I bought what was essentially a brand new truck for $8k less. 7 years and 40k miles later and it's still extremely reliable and a pleasure to drive. I'm keeping this one until it won't go any more.
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This is definitely a YMMV topic. We bought a new Honda Odyssey last February for $1K more than a 3 yr old van with 60K miles. It was worth it for us to buy new, especially since we will probably have it for the next decade, and this way we have the warranty.I know it's not a very Mustachian car, but we have three kids. They barely survived a 45 min drive in the back seat of the Jetta; we need three rows. It was worth our whole family's peace of mind to buy a minivan (I know it's not mustachian, but for us it is a quality of life decision).
Our other car is a 2004 Jetta wagon with 80 K miles (DH commuted 100 miles RT daily for the first several years of the car...much lower rate now). In the last 12 months, we have spent $2K on repairs to it (not cosmetic, required to run the thing). Neither DH or I are auto mechanics; the most advanced thing we can handle is changing light bulbs. We are considering selling it (I would say to not have a second car; he wants to get something else). Why? The consensus here seems to be that it just hit its sweet spot...but it needs new tires, the electrical system is going out (nothing like driving at night with no lights), the fuel pump is getting louder...for us it's not worth the hassle of having to either fix or live with these problems.
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You can buy a ~100k mile '02 Camry/Alitma/Whatever for $4-6K. Drive it for 100k+ miles and sell it for like $3K. Rinse and repeat.
I paid $3000 for my car several years ago. It had 100k miles on it. Now its a little over 140k, and should be worth around $2500. I'll sell it at 200k* for like $1800.
*I'll probably get bored of it and sell it before then, but I like to think that maybe one day I'll keep a car longer than 2 years.
Finding a 12 year old car whose owners only put an average of 7142 miles per year on is not as easy as it sounds. They exist, but they're certainly not common.
We got lucky in July and bought a 2000 model car with 40,800 miles on it! We took it straight to the tire place...from the numbers on the sidewall, we could tell that the tires were original.
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I've always been a believer in "left overs", if you want newer, it's actually better to go with a new left over than even a 3-5 year old car.
In my case, I need trucks for my company, I had been searching for a while and newer trucks hold their value very well, I was seeing 3-5 year old trucks with 30-50k miles on them selling for 20-23k when their original msrp was low 30's. I found a truck that was two model years old but still brand new (never had been purchased, still had full warranty had 100 miles on it), the msrp was almost 35K, I got them down to 20,200. My win really struck home when I was leaving the lot I stopped and looked at a truck they had that was a used 2010 with 38k miles on it and they were asking $27K...This isn't a rarity either, I tell everyone I know, you can easily get a third off msrp if you work them hard enough on a left over. Two years ago I did the same thing on my wife's nitro, it was almost two model years old, sticker of 31k, I bought it for 20,700.
My biggest advice to anyone wanting to save big on a new car, stick to text correspondence (email or texting), it takes all the emotion out of it and allows you to think on your next move. When I worked the truck deal, the dealer would always try to call me, I'd answer and say I was busy at work (usually was) and to just email me the numbers so I could remember it better.