Driving forces: When buying a new car is smarter than buying used

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  • high school fan Huntington, UT
    March 9, 2014 10:09 p.m.

    I have sold cars for the past thirty years and I can tell you that one should never buy a new car, they lose too much value the minute you leave the dealership. Buy a one year old at a much better deal.

  • JSB Sugar City, ID
    March 5, 2014 9:48 p.m.

    Not wanting to get stuck with car payments so my policy has been, if I didn't have the cash, I didn't buy it. Which means I've always driven older cars. The most I've ever paid for a car is $5000 and I can't calculate how much money I have saved because I've never made a car payment. Also, insurance is less expensive. I shop around, look for a good deal and most of the cars I've owned have given me good service. Bought a 1976 Ford Van when my youngest child was born (1982). We were still driving it after he returned from his mission 21 years later! Had to put in a rebuilt engine and had a few other issues but for the most part, it was reliable. I could load the whole family in it and it was a great car for taking scouts on camping trips. Plus, you could wash it out with a garden hose! I did a lot of the repairs myself. Pressing on the gas was like flushing the toilet, but gas was cheaper back then. I feel sorry for people who have to make monthly car payments.

  • SillyRabbit Layton, 00
    March 5, 2014 11:44 a.m.

    UVU to Cedar City is 212 miles.

    424 every day. 2120 every work week. 110,240 every year.

    Of COURSE you'd reach 250,000 miles! It only takes him 2.27 years at that rate!

    Let's do some math:

    Assoc professor salary = $74,473 / year - $18,618 in income tax (25% if married or single) = $55,855 / year

    Gas cost for 424 round trip = $3.28 in Cedar City x 12 gal fuel tank = $39.36. With a 40 MPG rating, he can get to and from work on 1 tank/day. But that's every SINGLE day.

    $55,855 - $10,233 gas cost / year = $45,622 left over. The cheapest Nissan for this year, the Versa, $12,800 in cost.

    $45,622 spread over 12 months = $3,801 left for expenses, assume a $1000 mortgage and $250 car payment, and...

    $2,550 left per month, BEFORE car insurance, utilities, cell phones, internet, cable, etc. Is he contributing 15% towards his 401(k) or IRA? That's another $925 per month.

    $1,625 left. Pay tithing to any church? -$600 per month.

    $1,025 left.

    Necessity of the car aside, his situation is a losing proposition. You, sir, should move (based on numerous assumptions).

  • SillyRabbit Layton, 00
    March 5, 2014 10:57 a.m.

    You win, Mr. Z (or Ms.).

    Buying sub-$2000 cars is buying a likely-to-break machine. Good work on stopping that habit.

    But running 180 degrees in the opposite direction to a new car dealer is NOT being financially astute.

    Choose the middle ground and look for 4-5 year old vehicles with average mileage or less. They'll look expensive, yes, but they will have passed through the infant mortality stage where failing parts/electronics will have made themselves known and/or hopefully replaced.

    And if your thought on people selling broken cars is true, then take it to a mechanic to pinpoint the problem and adjust the price/offer accordingly. That's not hard.

    There is so much you can do and take into your own hands in order to find the most reasonable price for the car you want. Just don't go thinking that the extreme ends of the spectrum are justified. An old clunker is not a hidden gem, and a new car will always depreciate horrifically.

    To fat skis, hey cool! My 04 Corolla, too. It's like all drastic depreciation occurs within the first 5 years. Thank you for the perfect example for Mr. (or Ms.) Z.

  • sknny tires fat skis Cottonwood Heights, UT
    March 4, 2014 9:55 a.m.

    I've had lots of luck buying BMW's Toyota Avalons and even suburbans with 60-80K miles on them. They work great, saved me money. In fact, I looked at selling mey 2004 Avalon the other day on KSL and found it has not depreciated much in the lat 3 years. I was shocked. Not the sexiest car, but non-depreciating car is always attractive? Who even knew they existed?

  • Z South Jordan, UT
    March 4, 2014 9:14 a.m.

    For years my dad would by worn out cars because they were cheap, then spend more on lost time and repairs than if he had bought a new car off the lot. I finally talked him out of that.

    A cheap car isn't really cheap if you have to spend a fortune to get it running and keep it running. These days, if someone is selling their car most likely there is something wrong with it. How much time and money are you willing to invest to figure it out and fix it?

  • SundanceKid27 OREM, UT
    March 3, 2014 9:02 p.m.

    The finance professor teaches at UVU but lives in Cedar City?

    Seems like a waste of money. More likely driving 6 hours a day to commute and this guy is giving financial advice?

  • samhill Salt Lake City, UT
    March 3, 2014 4:01 p.m.

    The best deal I've ever made on a car was buying a brand new but hail-damaged Toyota Avalon in 1995.

    It had 40% knocked off the sticker price and with body work to restore it, the total was still about %30 off the sticker. It has a "salvaged" title which hurts its resale value, but since my policy is always to drive a car into the ground, that was never a concern.

    For almost 19 years it has performed flawlessly and been an absolutely **terrific** car and, apart from someone getting a car as a gift, the best deal I know of.

  • SillyRabbit Layton, 00
    March 3, 2014 2:17 p.m.

    Sorry, no sale.

    Which is it? :
    Used cars might need repairs, or
    New cars might need repairs.

    If you are buying a new car because of the warranty, you are signing on the dotted line as an indication that you are expecting repairs on a brand new piece of machinery, therefore, you want protection from that impending cost. They call it "Peace of Mind."

    When you buy a used car from a private seller, you can go and get the same mechanical inspection that the car dealer can claim they performed, talk with the person who drove the vehicle daily, and save yourself from the $2000 markup.

    So, if you do need a $2000 repair within the dates that the warranty would covered, the difference is nil.
    If you don't need the repair, you saved $2000.

    Do your due diligence when buying.