Does it ever make sense to buy a new car?
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Thread: Does it ever make sense to buy a new car?

  1. #1

    Default Does it ever make sense to buy a new car?

    Hi,


    I?m approaching the end of my Camry lease in July. After making some moronic decisions with my past 2 car purchases I want to make the best possible decision this time. I recognize that a car is not an investment as it just depreciates but I want to be conscious of the total cost of ownership as well as safety features with this purchase. I?ve saved up 17k ontop of my emergency fund which I can either use to buy out my 2015 Camry lease residual, buy a different used vehicle, or put a large down payment on a new car, preferably a 2018 Camry. If I buyout my lease I?ve eliminated car payments and have a low mileage 2015 Camry with a residual that should be just under market value. The issues are I didn?t exactly baby the car in the past 3 years as I wasn?t anticipating buying it out. Also, the car is lacking many of the safety features I wanted to upgrade to as I anticipate my wife and I having kids in the next couple years. In my head, perhaps because my father told me ?never buy new? I feel like a sucker buying new as I would be the one taking the depreciation hit and would be committing to more monthly payments. On the upside I make over 200k and could easily pay it off quickly, I?d be getting every safety/convenience feature I want, and would get the benefit of the new warranty.Lastly, I?ve ruled out buying a heavily used car as I had my fair share of those in my life and am not mechanically inclined enough to identify a good/bad deal or handle repairs myself. If you were in my position what would you do? Does it ever make sense to buy new over used with a car like a Camry?

    Please help.


    I didn't find the right solution from the Internet.


    References:-
    https://www.bogleheads.org/forum/viewtopic.php?t=241254
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    Thanks!

  2. #2
    Join Date
    Sep 2014
    Location
    East Yorkshire
    Posts
    271

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    In recent years I have bought two cars from factory dealerships, - one a Seat, one a Toyota. They were both second hand with about 50k miles on the clock, but with dealer service history. In my experience of these two purchases, the dealers only sell what they consider to be the best of the used cars that come their way, the others get passed into the trade. Prices are not as low as can be found in other places, including private sales, but you get a good used car that's already done most of its depreciation, sold by a dealer whose good name is not worth them supplying dodgy motors.

    I found in both cases the dealers were not willing to negotiate on price, but were willing to put right minor blemishes etc, and sell with a full MOT - in both cases they were MOTd after I bought them so were sold with 12 months MOT.

    In both cases after one- and three-years respectively, the cars have proven to be reliable and trouble-free.

    I wouldn't buy a new car.

    I wonder why you have posted this question on this forum - have you an interest in our cars?

    Regards

    Andrew

  3. #3
    Join Date
    May 2006
    Location
    Callander, , .
    Posts
    2,571

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    About half the cars I have bough have been new the other half have been low mileage less than a year old all with manufacturers warranty. I tend to keep my cars for more than 5 years and usually have more than one car at a time. If you keep a car for more than 5 years you reduce the loss on an ownership per year level. I have had two cars now for more than ten years which has made the yearly drop very reasonable. Every now and again you get lucky had my 208GTB Turbo for more than twenty years and got three times what I paid for it . I think it really depends on what the reason for changing your car is, if you just like cars then new with a big financial loss may be best value. If you just want the most financial value then it has to be a medium sized good low mileage car kept until it starts to show signs of its age. All this does not take into account your own personal income and tax situation only you can work out that bit,
    Last edited by scooter; 24-07-2018 at 03:47 PM.

  4. #4
    Join Date
    Jan 2016
    Location
    Witney Oxfordshire
    Posts
    1,063

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    In the last 12 years I have probably lost less than 2k in depreciation in total. The cars I have bought I have managed to buy at the right price.

    The first was a Saab 9000 Aero, I found it at late at night on Ebay for what seemed a bargain price, I took a chance and it was better than it was advertised at. The dealer just wanted to get rid as it was a part ex and he didn't deal with cars older than 5 years old. I drove it like I stole it for 5 years and 50k miles and lost less than 1k on it when I came to sell it.

    The Second was a Saab 95 Aero Estate, I picked this up at a local auction, there was only one other bidder so another bargain. 3 years and 30k miles later and a 500 loss.

    The next was another Saab 95 Aero Estate that was on Gumtree, 3 years and I actually made 600 on that after 40,000 miles. The seller actually delivered it to me from Scotland.

    I now have my 260 ZTT, I suspect if I was going to sell it I would probably make a small profit.

    Basically what I am saying is buy a car that will be in demand and try and find a bargain, you wont find it tomorrow or even next week but patience is a virtue, I spent nearly a year looking for my 260 ZTT. It takes me a long time to earn what some people pay in depreciation annually. Cars out of dealer warranty with low mileage are the ones to go for. A 5 year old quality car with 30k on the clock will serve you well.
    ,
    Recently a friend sold his RS Focus after 2 years, he lost next to nothing on it, he bought it at a good price and the same dealer paid him top price for it.

    Cars to avoid are run of the mill models, performance always seems to sell. Yes your running costs will be higher but in most cases depreciation is most peoples biggest cost annually. A mate has recently taken a 20k hit on a Land rover in less than a year due to a change of circumstances.

    Steve

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