The dilemma of buying new cars vs used (secondhand) - opinions?

edkwon

edkwon

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In this interesting article by Derek Thompson: The current generation of adult Millenials, dubbed 'Generation Y' by the press, are at an all time record low of buying expensive items like new cars and houses. Obviously this is in part due to the current world economic state and frankly, theres less money and jobs to go around.

Let's skip all the economics and political talk since this is not for the forum for that and concentrate on one question:

We all agree that buying used is financially smarter decision in almost ALL situations for buying a car. But since the car industry and companies traditionally built their business model on selling NEW cars. How is the best way for car companies to restructure their business models so they can sustain in an enviroment (in an ideal world where all people are smart shoppers) where the vast majority of car shoppers will buy used, with only a minority of buyers buying new to feed that constantly aging used car market?

Also how much new car purchasing is necessary to provide the needed supply of decent quality, low mileage used cars so the used car market doesnt end up looking like something self-cannabalized like Cuba (where all the cars on the road are 60 years old, all have 200K+ miles on them and basically run on retrofitted tractor diesel engines)?
 
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Depreciation alone makes buy a new car a mug's game unless you have more money than sense. Time was when a 1-3 year manufacturer's warranty coupled with the general reliability of cars as a whole made it a fairly sensible approach but even the crappiest cars are so well built these days that you have to be unlucky or an idiot to end up with a used lemon.

I've owned my car for 3 and a half years and it has lost less value than a brand new MX5 would as soon as it's driven from the dealer's forecourt and aside from routine servicing and consumables such as tyres, brake pads and wiper blades nothing has broken, failed or fallen off.
 
The way I look at it is that buying a 3-4 year old, low mileage car with a good service history gives 90% of the benefits of buying a new car and very few of the negatives. As MWF says (unless you are buying something British) chances of anything major exploding in the first 5 years is slim, even the Italians have stepped up their game recently.

I bought my car when it was 3 years old, 18,000 miles on the clock, one previous owner. So I've missed out on the biggest period of depreciation, the previous owner seem to have been an older gentleman from a nice area of Edinburgh and it had barely been run in (not that cars need running in now-a-days). The car was in mint condition inside and out, only detracting factor was it lacked alloys the original Toyota wheeltrims had been replaced with cheapo Halfords ones.

Arguably another problem is the complete lack of options boxes the first owner selected when he ordered the car, mine is as base spec as base spec could be and is not what I'd have chosen personally. But there are plenty of better ones out there for not much more money, I just needed a local car quickly.

There is also the fact that buying second hand also causes considerably less pollution than buying a new car. So the eco-hippies can fuck off and picket Wayne Rooney's tasteless Range Rovers.
 
It's not complicated. You buy a new car if you absolutely HAVE to have the first of something in your block, must have it specced out exactly as you want, can afford the horrible depreciation and simply don't care.

For everyone else, buying a (even slightly) used car is always going to be the better option. The only downside is trying to find the one model in the exact colour/trim you want.
 
I don't know, if you're financing the car, interest rates are/can be much lower on new cars verses used. Sometimes that alone can make up the difference you'll end up paying in the end.
 
Fully new cars really only make sense for people who either want something shiny, new and perfect and have the cash on hand to splash on said simple sentiment, a feeling I can understand but cannot justify economically, or for those who are truly clueless about cars. The people that walk out of a showroom having bought a car because 'they liked the color'.....they 'need' a new car with a warranty and the resulting manufacturer 'forced' maintenance schedule or they will run the poor thing into the ground in a year.
 
Put aside the buying new and paying full price for a moment, what about those people that pay above sticker just so they can be the first? (think new Camaro/Challenger) What's the point of that? 2 months later everybody's going to have one, and let's face it these are not particularly impressive in the first place...
 
_HighVoltage_ said:
Put aside the buying new and paying full price for a moment, what about those people that pay above sticker just so they can be the first? (think new Camaro/Challenger) What's the point of that? 2 months later everybody's going to have one, and let's face it these are not particularly impressive in the first place...
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Same mentality as the people who queue overnight at Apple stores. They were obviously either never taught patience by their parents or their lives are so devoid of anything approaching true meaning that they have to define themselves with the latest gadget.

Personally I think anyone who rushes out to by something as soon as it is released is asking for trouble. Same applies to cars - if you buy a model that's just come out you risk being the guinea pig for the manufacturer by discovering all the little glitches their own testing failed to reveal. Let some other poor sap have the headache and the inconvenience.
 
I bought my Focus SVT new back in 2004 with 0% interest on the financing. While I could of bought an 02 or an 03 I couldn't get the better financing and with a performance hatch I didn't like the idea of being the second owner.
That said I feel I have gotten my moneys worth out of the car and will probably get rid of it in a year or so for another car I expect to keep for a decade or so.
 
edkwon said:
Obviously this is in part due to the current world economic state
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While that's a part of it, were "millenials" actually a major part of the new-car-and-house-buying public, anyways? While the economy affects the people who actually DO buy cars and houses...I don't really think it's effects on people in their 20's has quite the impact on the total market as it does for, say, people in their 30s or 40s.

Don't forget that there have been countles articles on the simple fact that "kids these days" just don't aspire to a fancy car, or a house with lots of land anymore. It used to be that you cut back on everything to buy your house and car. Now, younger people cut back on the house and car, so they can afford everything else.

When my parents talk about "back in the day" they both worked two jobs, and never went out to eat to afford to buy their first house. When the time came where the family needed a new car, we tightened our belts and borrowed movies from family, rather than renting/going to the theater. However, this generation (and this includes most gen-x-ers I know, too) say that they are broke, but then give you the WEIRDEST look when you mention that you aren't going out on *gasp* friday night!! like you've just admitted to being a communist. They'll drop $75 on a Friday night, go out again on Saturday with complete and utter belief in that this is a right, and shouldn't have any affect on their budget. It's simply a must-have, like water and air. The middle class complaining that they are "broke" is much different than what they were complaning about 20-30 years ago. The low-bar that the majority is willing to live with has steadily crept upward to the point where you can claim to have "no money" with a 55" LCD TV, cable, iphone for the whole family, etc.

[/back to your regularly-schedule "used vs new" programming]

I've only ever bought used cars. However, both times I leased a vehicle, I leased new cars...and both times I just liked the feeling of a new car. Plain & simple. I like the smell (yes, I know it's really petrochemical off-gassing neurotoxins), the seats foam isn't dented-in yet, the fabric is all nice and taut, pristine carpets (without smelling like either wet carpet or carpet shampoo which...there is no way to avoid when cleaning car carpet. You get one or the other). I bought the cars I wanted, and never once thought about a) what people would think of me; b) the projected resale value after depreciation; c) when I plan to sell it to make sure I didn't lose too much money.

Shoes: as long as they are high-quality, clean & cleaned, in good condition, with indications of minimal wear, there's nothing wrong with buying used shoes. However, I would never buy used shoes. I have a friend who buys, and reconditions used vintage shoes...and many are awesome! But, not for me. Can't really explain why with logic...but for many people, buying a car isn't a math game. It's illogical. "I want it, so damnit, I'm going to have it!"

There's nothing wrong with impulse buying as long as you don't spend your entire 5-year-loan complaining about how much you paid. I bought a BluRay player 5 years ago, fully knowing what I was doing. It was $300 then, and I knew within a couple years they'd be down to $100 (or less). But I didn't care.

And, I plan on buying new for my next car (in a couple years) which I'm convinced will either be a Mustang or a BRZ. Neither of which is a logical car, anyways...so why not add an illogical price tag?

Lastly, I don't hold ANYTHING against people who wait in line for iPhones. You know that they aren't there to just buy a phone, right? It's no different than my friends and I going to a midnight opening of a record store for a release of a new album. It's something they talk about with their friends, and they have a sort of..."club" around it. I see no real issue with it...except that they are buying an inferior product. :p [/jaded Samsung smartphone owner]
 
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I also think it has to deal a lot with the car you buy. For example, My TSX I bought new at 27.5k after some cross shopping and haggling. Today, I think if it were to sell it i would get around 24k. I think that if I were to buy a used 2008 TSX back then, I would have paid around 23k and now it would be worth around 19k. So the deprecation is about the same (i think at least, with my general figures I've seen on forums and such).

I think this only applies to cars with really good resale values. Of course if you buy a much older car you would loose very little or sometimes nothing at all, but then you compromise reliability a bit.
 
p0w3r said:
Of course if you buy a much older car you would loose very little or sometimes nothing at all, but then you compromise reliability a bit.
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I have a cousin who, from what I understand, is paying for his schooling with this simple process:

1) Buy shitbox from far away at low price
2) Spend no more than $25 to improve
3) ???
4) Profit

Oh yeah...now I remember what 3) was...he washes it, takes good photos, and sells it for double.

Can't really do that with a 2008 TSX.
 
Thinking back to buying y Fox new and selling it used after 4.5 years I'd say that buying it new was a tiny bit more expensive as a whole. IMO worth it for better feeling and reliability.

It lost less than half its value over the duration (bought for 8, sold for 4.5), and required very little non-warranty maintenance. A used car would have been about 5, and might have sold for 2.5 - putting half of that saved grand into maintenance I'd say it was a good deal to go new.
 
I myself have never bought a new car, or even sold a car in my entire life. I buy them used, and drive the shit out of them until they need to be taken out back and shot.

I guess that if the car is still good enough to get some money out of, then it's good enough to still drive. :)
 
I learned my lesson from the two pieces of shit that I bought used: I'm horrible at choosing used cars. I buy new, I run into the ground, I buy new again.
 
Re: The dilemma of buying new cars vs used (secondhand) - opinions?

My brother and I are on opposite sides if this discussion.

He always buys new, I rarely even change cars.

The money he spends in car payments in a year is what I spent in my e30 over the last 4 years and until his recent VW GTi purchase, were always no where near as good as my 20year old car for enjoyment.

I keep thinking about buying a mazdaspeed 6, if I could find one, but not sure about working on it. I don't trust anyone to work on my car without supervision. Then the damn cost, plus insurance rates.

How does anyone who makes $30k/yearbor less afford these new cars that cost $35k + ?
 
thedguy said:
My brother and I are on opposite sides if this discussion.

He always buys new, I rarely even change cars.

The money he spends in car payments in a year is what I spent in my e30 over the last 4 years and until his recent VW GTi purchase, were always no where near as good as my 20year old car for enjoyment.

I keep thinking about buying a mazdaspeed 6, if I could find one, but not sure about working on it. I don't trust anyone to work on my car without supervision. Then the damn cost, plus insurance rates.

How does anyone who makes $30k/yearbor less afford these new cars that cost $35k + ?
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We can't really afford it. We're just stupid enough to live beyond our means. The worst part is, I'm not so sure I'll never buy new again, but I hope that when the time does come I'll find something used I like.
 
Well, my car was 9 months old and had run 3700 km when i bought it at 60% of its new value... 35xxx somethig ? was the list price, 23xxx was my price excluding the 2500? Abwrackpr?mie from the Government... It still smelled ned whe I got it!!!
Either buy like that or buy 8-12 years old at the lowpoint of depreciation (which means BMW, Merc, Exotic or classic) for the most bang for the buck, IMHO...
 
NecroJoe said:
I have a cousin who, from what I understand, is paying for his schooling with this simple process:

1) Buy shitbox from far away at low price
2) Spend no more than $25 to improve
3) ???
4) Profit

Oh yeah...now I remember what 3) was...he washes it, takes good photos, and sells it for double.

Can't really do that with a 2008 TSX.
Click to expand...

I actually know someone who does this, except he buys nice cars. He scours the forums for the best deals on evos, G35s, and other cars that are in high demand and then deatails and does some maintenance work on them. Sometimes drives the car for a few months, other times he just flips them with a few grand profit. Not a bad idea tbh.
 
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