buying used car smarter than buying new?

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ray.james
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Re: buying used car smarter than buying new?

Post by ray.james » Mon Aug 15, 2016 4:34 pm

There are cars that depreciate faster and cars that are very slow. I bought a 3 year old car with just 15k miles. I can even smell the new leather at 45% off. That's because it is an entry luxury and model has changed. If one tried the same with Honda accord/civic, I don't think it will depreciate more than 25- 35%. At 1 year, some of these cars go for 95-100% of the purchase price if you locked in manufacturer deals. Also, people often forget the taxes which is at least few hundreds on the purchase price difference + subsequent registration fees.

Going for 5-10 year old cars is way more mixed bag. I limit myself to less than 3 years.
When in doubt, http://www.bogleheads.org/forum/viewtopic.php?f=1&t=79939

MrNewEngland
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Re: buying used car smarter than buying new?

Post by MrNewEngland » Tue Aug 16, 2016 8:20 am

Jack FFR1846 wrote:
MrNewEngland wrote:I just bought a used Wrangler, but only because I got a super good deal on it. Those hold their value so well that I was going to buy a new one. I had been looking for a LONG time and the problem with used ones is that they're usually pretty beat. I found this one this weekend and it was really inexpensive, I doubt it was ever off the pavement, and it was the specific vehicle I wanted. So I finally got the vehicle I wanted. YMMV

Really good point. I spent about 6 months looking for a 2 year old Wrangler Unlimited for a reasonable price. Not only was I unable to find one with the equipment I wanted (rear LSD was a requirement), when I gave up and ordered a new one, it was $2k cheaper than any of the 2 year old ones I found.
Sounds similar to my situation. I wanted a 2 door with a manual and they were tough to find. Any used one that wasn't completely beaten was wildly expensive. I was planning on ordering a '17 next week until this one popped up. I couldn't be happier to be back in a Wrangler, but I searched for months because of how ridiculous the used ones cost.

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Re: buying used car smarter than buying new?

Post by LarryAllen » Tue Aug 16, 2016 8:30 am

I love cars, love buying them, and have had many new and used cars. In my opinion people often overstate the depreciation hit because they compare the used car price to the new car MSRP. Our last new car (which was bought in December - so beginning of model year) was about 15% off MSRP. That was simply attained by using truecar.com so didn't even have to haggle for it. If I had worked it I could have gotten more than 15% off MSRP. So, to me, in a situation like that you need to look at what the comparable used cars are actually selling for before deciding. On the other hand the last luxury car I bought was 3 years used, with extremely low mileage (12,000 miles on it), and was about 50% less than MSRP so I deemed it worth it. For that car it was simply easier to write a check for 50% than it would have been for the new car price.

As for cash v. financing we always look at the financing deals. If they are offering anything below 2% I would probably take it. You should be able to do better with your investments than that... hopefully.

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dm200
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Re: buying used car smarter than buying new?

Post by dm200 » Tue Aug 16, 2016 8:53 am

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In my opinion people often overstate the depreciation hit because they compare the used car price to the new car MSRP
I agree.

Also, the "value" of a used car (and measure of depreciation) should not use the actual price the new car purchaser actually paid for it - in doing these evaluations. Different people end up often paying quite different amounts for the identical new car. So, for example if a particular new car three model years (say 2013) ago had an MSRP of $30,000 - and "Pat" paid $30,000 and "Chris" paid $26,000 - when the car is driven off the lot, the "value" of the car is the same. Suppose they each drive their cars the same (say 10,000 miles a year) and take the same care. Now, two three year old used cars with 30,000 miles are for sale. Suppose each is sold at a dealer (or Carmax) for $20,000. Is the "depreciation" 33.33% (10,000/30,000) or 23% (6,000/26,000) or something else? If that make/model has not changed much, then another measure might be what you might pay for a new 2016 dentically equipped.

These often very different prices that consumers pay for new cars is also skewed by expensive add-ons dealers are very good at "selling", such as prepaid maintenance, extended warranties, GAP Insurance, paint protection ... and so on.

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dm200
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Re: buying used car smarter than buying new?

Post by dm200 » Tue Aug 16, 2016 11:16 am

What I am also noticing recently is that a number of folks have older Toyota Camrys (late 90's to early 2000's) that they bought new, drive few miles and take good care of. I actually bought one of these late last year.

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Re: buying used car smarter than buying new?

Post by feh » Tue Aug 16, 2016 12:22 pm

stoptothink wrote:
GordonG wrote:From what I've read, it seems that buying used is usually a smarter choice. For example, I can get a 2014 SUV for about $18,500. The comparable 2016 model starts at about $26K. That's almost a 30% savings. I like the idea of someone else taking that initial depreciation hit. The used SUV is low mileage (around 30K) and comes with a decent warranty.
This is the traditional viewpoint, but it really depends nowadays. Depending on the car you are looking to buy, it can definitely be better to simply buy new.
+1

Just bought a car 2 weeks ago. I investigated buying used, however, the cars we were interested in had such high resale value that it made more sense to buy new.

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backpacker
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Re: buying used car smarter than buying new?

Post by backpacker » Tue Aug 16, 2016 12:52 pm

Buying a new car isn't a good deal compared to buying used. It just isn't. Saying that it is is like saying that buying caviar is a good deal compared to buying tuna. Sure, if you like caviar and have the money, buy caviar. That may well be a rational way of maximizing your utility. But there's no good sense in which you're getting the most "fish for your buck".

For example, car salesmen will tell you that used Japanese econoboxes are "expensive" and that you can get "a great discount" on a new one. The quickest way to disabuse yourself of this idea is to look online for five minutes at actual prices. TrueCar reports that $22,000 would be a great price on a 2016 Prius in my area. Not just an average price, but one of the very best that anyone has paid. 45 seconds on CarFax shows a 2014 Prius with 37,000 miles for a little under $14,000. So even a two-year old econobox that "holds its value" costs less than 2/3 the price of a new one.

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Re: buying used car smarter than buying new?

Post by dsmil » Tue Aug 16, 2016 1:28 pm

I feel like buying new is better if you are going to run the car into the ground. Your cost per year should be very similar to buying used (more $ and more years), so why not buy new? If you are buying a car but will later sell it, let someone else take the depreciation hit and buy used.

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dm200
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Re: buying used car smarter than buying new?

Post by dm200 » Tue Aug 16, 2016 1:52 pm

backpacker wrote:Buying a new car isn't a good deal compared to buying used. It just isn't. Saying that it is is like saying that buying caviar is a good deal compared to buying tuna. Sure, if you like caviar and have the money, buy caviar. That may well be a rational way of maximizing your utility. But there's no good sense in which you're getting the most "fish for your buck".
For example, car salesmen will tell you that used Japanese econoboxes are "expensive" and that you can get "a great discount" on a new one. The quickest way to disabuse yourself of this idea is to look online for five minutes at actual prices. TrueCar reports that $22,000 would be a great price on a 2016 Prius in my area. Not just an average price, but one of the very best that anyone has paid. 45 seconds on CarFax shows a 2014 Prius with 37,000 miles for a little under $14,000. So even a two-year old econobox that "holds its value" costs less than 2/3 the price of a new one.
I disagree. Buying used vs buying new (in my opinion and experience) and whether it is a "good deal" depends on nearly all of the details. While I know little about the example cited (Prius), assuming this is two model years old (for comparison) - 37,000 miles is above average mileage. It is near certain that a two year old vehicle with 37,000 miles will require higher service and maintainence costs than a new 2016.

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backpacker
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Re: buying used car smarter than buying new?

Post by backpacker » Tue Aug 16, 2016 2:26 pm

dm200 wrote:
backpacker wrote:Buying a new car isn't a good deal compared to buying used. It just isn't. Saying that it is is like saying that buying caviar is a good deal compared to buying tuna. Sure, if you like caviar and have the money, buy caviar. That may well be a rational way of maximizing your utility. But there's no good sense in which you're getting the most "fish for your buck".
For example, car salesmen will tell you that used Japanese econoboxes are "expensive" and that you can get "a great discount" on a new one. The quickest way to disabuse yourself of this idea is to look online for five minutes at actual prices. TrueCar reports that $22,000 would be a great price on a 2016 Prius in my area. Not just an average price, but one of the very best that anyone has paid. 45 seconds on CarFax shows a 2014 Prius with 37,000 miles for a little under $14,000. So even a two-year old econobox that "holds its value" costs less than 2/3 the price of a new one.
I disagree. Buying used vs buying new (in my opinion and experience) and whether it is a "good deal" depends on nearly all of the details. While I know little about the example cited (Prius), assuming this is two model years old (for comparison) - 37,000 miles is above average mileage. It is near certain that a two year old vehicle with 37,000 miles will require higher service and maintainence costs than a new 2016.
The extra cost of insuring the new vehicle will more than offset any minor difference in expected maintenance costs.
Last edited by backpacker on Tue Aug 16, 2016 2:30 pm, edited 1 time in total.

stoptothink
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Re: buying used car smarter than buying new?

Post by stoptothink » Tue Aug 16, 2016 2:28 pm

backpacker wrote: For example, car salesmen will tell you that used Japanese econoboxes are "expensive" and that you can get "a great discount" on a new one. The quickest way to disabuse yourself of this idea is to look online for five minutes at actual prices. TrueCar reports that $22,000 would be a great price on a 2016 Prius in my area. Not just an average price, but one of the very best that anyone has paid. 45 seconds on CarFax shows a 2014 Prius with 37,000 miles for a little under $14,000. So even a two-year old econobox that "holds its value" costs less than 2/3 the price of a new one.
Many of us have looked, for a whole lot longer than 5min. We are planning now, for a car we'll likely be buying next summer. I've already been researching for several months. Maybe I'll find a used unicorn between now and then that is drastically cheaper than the others, but my research to date suggests that for the exact car we want, we'd be far better off buying new. Several other posters have also noted similar experiences. It simply depends.

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Re: buying used car smarter than buying new?

Post by roflwaffle » Tue Aug 16, 2016 2:33 pm

Mostly used, sometimes new. Certain cars (Honda, Toyota, etc...) don't depreciate that much within the first ~25k-50k miles, and sometimes you can catch dealer incentives that will put a new purchase at or below what someone is willing to sell you a car for on the used market. If you wait a year or so, the used market will usually catch up and drop below that discounted cost, but it can take a bit of time. As usual, YMMV.
backpacker wrote:For example, car salesmen will tell you that used Japanese econoboxes are "expensive" and that you can get "a great discount" on a new one. The quickest way to disabuse yourself of this idea is to look online for five minutes at actual prices. TrueCar reports that $22,000 would be a great price on a 2016 Prius in my area. Not just an average price, but one of the very best that anyone has paid. 45 seconds on CarFax shows a 2014 Prius with 37,000 miles for a little under $14,000. So even a two-year old econobox that "holds its value" costs less than 2/3 the price of a new one.
That price difference is because you're comparing different generations of the Prius. All the used 2016s I'm seeing are at $22k. There are plenty of cars where you can find the same model with a couple years and ~25k-50k miles for 2/3rds of the price of a new car, but some cars sell for a lot more than that even on the used market.

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Re: buying used car smarter than buying new?

Post by backpacker » Tue Aug 16, 2016 2:47 pm

stoptothink wrote:
backpacker wrote: For example, car salesmen will tell you that used Japanese econoboxes are "expensive" and that you can get "a great discount" on a new one. The quickest way to disabuse yourself of this idea is to look online for five minutes at actual prices.
Many of us have looked, for a whole lot longer than 5min. We are planning now, for a car we'll likely be buying next summer. I've already been researching for several months. Maybe I'll find a used unicorn between now and then that is drastically cheaper than the others, but my research to date suggests that for the exact car we want, we'd be far better off buying new.
Well, what model are you trying to buy? I'll be convinced once I've looked for five minutes and haven't found anything. :D
roflwaffle wrote:Mostly used, sometimes new. Certain cars (Honda, Toyota, etc...) don't depreciate that much within the first ~25k-50k miles.
Can you give an example? People always say this sort of thing, but I've never actually seem a Honda or Toyota that "doesn't depreciate that much".
roflwaffle wrote:
backpacker wrote:So even a two-year old econobox that "holds its value" costs less than 2/3 the price of a new one.
That price difference is because you're comparing different generations of the Prius.
I bought a 2013 Prius last summer for $14k and it was at the time 2/3 the TrueCar price for a new Prius. Those were the same model, so I'm skeptical that makes much difference.

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Re: buying used car smarter than buying new?

Post by roflwaffle » Tue Aug 16, 2016 3:28 pm

backpacker wrote:
roflwaffle wrote:Mostly used, sometimes new. Certain cars (Honda, Toyota, etc...) don't depreciate that much within the first ~25k-50k miles.
Can you give an example? People always say this sort of thing, but I've never actually seem a Honda or Toyota that "doesn't depreciate that much".
roflwaffle wrote:
backpacker wrote:So even a two-year old econobox that "holds its value" costs less than 2/3 the price of a new one.
That price difference is because you're comparing different generations of the Prius.
I bought a 2013 Prius last summer for $14k and it was at the time 2/3 the TrueCar price for a new Prius. Those were the same model, so I'm skeptical that makes much difference.
My wife and I picked up a new plug-in Prius Advanced in July of 2014 for ~$29k, which was what used plug-in Prius models with the same trim/condition and ~10k-50k miles were listed at on cargurus, craiglist, cars(dot)com, etc...
http://slickdeals.net/f/6932762-2014-pr ... edit-0-apr
After the rebate/tax credit, it was less expensive than what we would have paid for a normal Prius with similar trim based on the lowest price on TrueCar. Now we can get a 2012/2013 pip advanced with ~50k miles for ~$19k (compared to $24k after rebate/tax credit), but that took a couple years and lower gas prices.

How many miles/what trim was your 2013 when you bought it and what were the truecar prices? I'd look them up, but truecar drops older models which is kind of annoying. Certain cars also hold their value better in certain regions (eg hybrids in California, especially with carpool stickers), so location might have made a difference.

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Re: buying used car smarter than buying new?

Post by stoptothink » Tue Aug 16, 2016 4:27 pm

backpacker wrote:
stoptothink wrote:
backpacker wrote: For example, car salesmen will tell you that used Japanese econoboxes are "expensive" and that you can get "a great discount" on a new one. The quickest way to disabuse yourself of this idea is to look online for five minutes at actual prices.
Many of us have looked, for a whole lot longer than 5min. We are planning now, for a car we'll likely be buying next summer. I've already been researching for several months. Maybe I'll find a used unicorn between now and then that is drastically cheaper than the others, but my research to date suggests that for the exact car we want, we'd be far better off buying new.
Well, what model are you trying to buy? I'll be convinced once I've looked for five minutes and haven't found anything. :D
Hyundai elantra GT with a manual transmission. A local dealer, who I bought my previous vehicle from, offered us $16.5k OTD just a few weeks ago with the recent "end of summer" Hyundai rebates. We passed, as it wasn't good enough of a deal to have us bite a year before we really need the vehicle. Here is what is available used within 100 miles of us http://www.carfax.com/vehicles/Used-Hyu ... ion-Manual. I could either buy one new or spend $15-16k OTD on a used one with 20k+ miles. Keep in mind, this is a Hyundai, which is still known for having low resale. If you want a really good example, Toyota Tacoma is the most common.

I'm definitely not opposed to buying used, I've never owned a new car in my life, but 1-3yrs, 20K+ miles, and not knowing how it was treated by the previous owner(s), is definitely worth the ~10% price differential to us.

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Re: buying used car smarter than buying new?

Post by bottlecap » Tue Aug 16, 2016 4:59 pm

I guess this is one of the age-old debates that everyone has a different, and largely anecdotal, opinion about.

I've done both "buy new and drive forever" (once) and "buy used and drive forever" (thrice: but 2 got mushed). I'll say a got a whole lot more vehicle for the buck buying a used 5 year old SUV, but the one I bought new is more reliable and quite a bit older. I've had two other used cars that were not any trouble. Of course that's a sample size of 4. Maybe 5: My wife had a car she had bought new before I met her. It was probably the least reliable of all of the above, but nothing major.

In the end, I tend to believe the market - a used car that depreciates slowly is likely worth more and one that reflects greater depreciation is worth less. Much of this likely has to do with reliability of the car in general. So unless you find a seller that is desperate or doesn't car about a buck, the difference between two used cars in minimal. What you don't pay in depreciation will likely be made up in repairs.

I will also say that there is enough "fear of the unknown" and "new cars smell better and are more fun" sentiment - in even this fiscally conservative forum - to tell me that there is a "new car premium" over and above any purely fiscal calculation. If paying this premium is not "worth it" to you, you are likely saving money. But don't get too excited, it's probably not enough to make a huge difference in retirement!

JT

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Re: buying used car smarter than buying new?

Post by backpacker » Tue Aug 16, 2016 5:24 pm

roflwaffle wrote: My wife and I picked up a new plug-in Prius Advanced in July of 2014 for ~$29k, which was what used plug-in Prius models with the same trim/condition and ~10k-50k miles were listed at on cargurus, craiglist, cars(dot)com, etc...
http://slickdeals.net/f/6932762-2014-pr ... edit-0-apr
After the rebate/tax credit, it was less expensive than what we would have paid for a normal Prius with similar trim based on the lowest price on TrueCar. Now we can get a 2012/2013 pip advanced with ~50k miles for ~$19k (compared to $24k after rebate/tax credit), but that took a couple years and lower gas prices.
Hey, a fellow Prius driver! I agree that buying new looks pretty good in your case given the tax credits. State specific credits for new vehicles should be expected to push down the price of new vehicles compared to used vehicles.
roflwaffle wrote:How many miles/what trim was your 2013 when you bought it and what were the truecar prices? I'd look them up, but truecar drops older models which is kind of annoying. Certain cars also hold their value better in certain regions (eg hybrids in California, especially with carpool stickers), so location might have made a difference.
We bought a 2013 Prius two for $13,800 when the TrueCar price for 2015 Prius twos was about $21,000 (if I remember right). We're out in New Jersey, so a bit of a different market I suppose.

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Re: buying used car smarter than buying new?

Post by backpacker » Tue Aug 16, 2016 5:31 pm

stoptothink wrote:
backpacker wrote: Well, what model are you trying to buy? I'll be convinced once I've looked for five minutes and haven't found anything. :D
Hyundai elantra GT with a manual transmission. A local dealer, who I bought my previous vehicle from, offered us $16.5k OTD just a few weeks ago with the recent "end of summer" Hyundai rebates. We passed, as it wasn't good enough of a deal to have us bite a year before we really need the vehicle. Here is what is available used within 100 miles of us http://www.carfax.com/vehicles/Used-Hyu ... ion-Manual. I could either buy one new or spend $15-16k OTD on a used one with 20k+ miles. Keep in mind, this is a Hyundai, which is still known for having low resale. If you want a really good example, Toyota Tacoma is the most common.

I'm definitely not opposed to buying used, I've never owned a new car in my life, but 1-3yrs, 20K+ miles, and not knowing how it was treated by the previous owner(s), is definitely worth the ~10% price differential to us.
It does seem that Elantras are weirdly hard to find. There's this used 2016 near you for $13,700 or so after taxes. Saving $2,800 while driving a used vehicle from the same year looks pretty good! Of course, you could decide that buying the new car makes you happy and should do that if it does. It's like buying caviar instead of tuna. Not a better deal, but doesn't mean you shouldn't do it if you like caviar.
Last edited by backpacker on Tue Aug 16, 2016 5:45 pm, edited 2 times in total.

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Re: buying used car smarter than buying new?

Post by beagle1 » Tue Aug 16, 2016 5:35 pm

It's been awhile, but I bought my current car new about ten years ago. It was in September, and I was browsing used Subaru Outbacks, trying to take advantage of a lower price for a gently used two year old cars. I looked at the models, scratching my head as to why they were so expensive.

I asked the salesman for the price of the new car. Since it was the end of the model year, and they were trying to clear out the 2006 models, there were a couple of instant rebates, and they were dealing to move the car. Sure, I got a model that was technically a year old, but it had zero miles and was priced about the same as the other vehicles. They gave me zero percent interest on the payments, which I can't imagine would have been available on a used vehicle.

I know OP might be in a different situation, and things may have changed since I bought, but this time of year used to be a great time to be shopping for a new car. I've also heard end of the month is a good time to buy, as dealerships are trying to meet quotas to trigger bonus payments from the automaker.

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Re: buying used car smarter than buying new?

Post by JoeJohnson » Tue Aug 16, 2016 5:43 pm

GordonG wrote:
dm200 wrote:Especially if you have excellent credit, new (or late model) auto loan financing has very low interest rates. It can make a lot of sense to finance a car purchase so you can reduce other consumer credit balances and/or fund longer term investmnts.
I can get a 2014 SUV for about $18,500. The comparable 2016 model starts at about $26K. That's almost a 30% savings. I like the idea of someone else taking that initial depreciation hit. The used SUV is low mileage (around 30K) and comes with a decent warranty.
I would not consider two model years old at 30,000 miles as "low mileage". Let's say you drive 15,000 miles per year and target 150,000 miles and ten years on a vehicle. Using your numbers and assuming zero value at the end of life (10 years and 150,000 miles), that would be $2,600 per year for the new SUV and $2,313 per year for the used one (8 more years). That is less than $300 per year difference. It would not be unreasonable that the used vehicle would (or might) have maintenance/repair costs higher than the new one.

I think the "depreciation hit" for the first few years is often overestimated. Using your $26K (I assume MSRP), and if you could get it for $25,000 - then the new/used difference narrows.

Some long time friends of ours have purchased mini-vans for many decades - and drive them a long time. In recent years, they purchased late model used. Last month, when their minivan died, they purchased a new model because (to their surprise) there was no real break on a late model used.
The particular SUV I'm looking at was a leased vehicle, so I'm assuming the yearly cap was set around 15K miles. For some perspective, my last vehicle was a used Jeep with about 95K miles on it. I drove it for almost 5 years and put under 30K miles on it in that time. So I figure it'll take me another 5 years to put 30K on the "new" SUV. That'd put me at 60K miles in 2021, and it should still have a lot of life in it after that. It's a Nissan, so hoping it's fairly reliable.
If you are putting 6k miles on per year I wouldn't buy a vehicle with only 30k on the odometer. Go higher

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Recently bought a new Civic

Post by retire14 » Tue Aug 16, 2016 6:17 pm

I checked with Carmax and dealers for a 2012-2014 used Civic/Corolla/Mazda. Decided to buy a new one since the price differentials for these models are insignificant.

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Re: buying used car smarter than buying new?

Post by randomguy » Tue Aug 16, 2016 7:28 pm

backpacker wrote:
stoptothink wrote:
backpacker wrote: Well, what model are you trying to buy? I'll be convinced once I've looked for five minutes and haven't found anything. :D
Hyundai elantra GT with a manual transmission. A local dealer, who I bought my previous vehicle from, offered us $16.5k OTD just a few weeks ago with the recent "end of summer" Hyundai rebates. We passed, as it wasn't good enough of a deal to have us bite a year before we really need the vehicle. Here is what is available used within 100 miles of us http://www.carfax.com/vehicles/Used-Hyu ... ion-Manual. I could either buy one new or spend $15-16k OTD on a used one with 20k+ miles. Keep in mind, this is a Hyundai, which is still known for having low resale. If you want a really good example, Toyota Tacoma is the most common.

I'm definitely not opposed to buying used, I've never owned a new car in my life, but 1-3yrs, 20K+ miles, and not knowing how it was treated by the previous owner(s), is definitely worth the ~10% price differential to us.
It does seem that Elantras are weirdly hard to find. There's this used 2016 near you for $13,700 or so after taxes. Saving $2,800 while driving a used vehicle from the same year looks pretty good! Of course, you could decide that buying the new car makes you happy and should do that if it does. It's like buying caviar instead of tuna. Not a better deal, but doesn't mean you shouldn't do it if you like caviar.
For 2300 dollars (16k-13.7) you are
-giving up 21k of miles. That is almost 2 years of driving
-giving up 5 years/40k miles of power train warranty

That makes it pretty marginal to me. You figure the additional 2 years of driving are worth ~1.5-2.5k and the warranty is worth say 500 (on average you probably get 0 but the one 3k repair ups the average) so there is no way I am buying used. Get that used car down below 12k and I would think about it.

I assume the problem is nobody buys manuals anymore more than nobody buys elantras. I see them all over the place.

Reality is that new vs used is a minor factor in TCO compare to things like picking right brand(honda versus bmw), car (civic versus honda pilot), and ownership choices (running it for 10+ years versus trading in every 3 years). Worth thinking about but the numbers might not add up to much. Saving 3-4k on a 20k car is nice. But if you only own 4-5 (say 4-5 civics at 15-20 years each to take you from 20 to 80+), we are talking 12-20k over your life time. It is always nice to have more money but it isn't a choice you want to lose sleep over.

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Re: buying used car smarter than buying new?

Post by stoptothink » Wed Aug 17, 2016 9:33 am

backpacker wrote:
stoptothink wrote:
backpacker wrote: Well, what model are you trying to buy? I'll be convinced once I've looked for five minutes and haven't found anything. :D
Hyundai elantra GT with a manual transmission. A local dealer, who I bought my previous vehicle from, offered us $16.5k OTD just a few weeks ago with the recent "end of summer" Hyundai rebates. We passed, as it wasn't good enough of a deal to have us bite a year before we really need the vehicle. Here is what is available used within 100 miles of us http://www.carfax.com/vehicles/Used-Hyu ... ion-Manual. I could either buy one new or spend $15-16k OTD on a used one with 20k+ miles. Keep in mind, this is a Hyundai, which is still known for having low resale. If you want a really good example, Toyota Tacoma is the most common.

I'm definitely not opposed to buying used, I've never owned a new car in my life, but 1-3yrs, 20K+ miles, and not knowing how it was treated by the previous owner(s), is definitely worth the ~10% price differential to us.
It does seem that Elantras are weirdly hard to find. There's this used 2016 near you for $13,700 or so after taxes. Saving $2,800 while driving a used vehicle from the same year looks pretty good! Of course, you could decide that buying the new car makes you happy and should do that if it does. It's like buying caviar instead of tuna. Not a better deal, but doesn't mean you shouldn't do it if you like caviar.
Tax, title, and license would be more than $800 (sales tax alone is ~$900 here for that vehicle), probably more in the range of $1500+. That car isn't leaving the lot for <$14k. This is by far the best deal in the area and it still is saving us <15% for a car with 20K+ miles and giving up a big chunk of the warranty. If you think that is a better deal, we simply don't agree.

There simply are no hard and fast rules today, unless you are looking at a more used car. Buying cars several years old with 50K+ miles and driving them into the ground is pretty much always going to be cheapest route.

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GordonG
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Re: buying used car smarter than buying new?

Post by GordonG » Wed Aug 17, 2016 9:42 am

It really sounds like the answer to my original questions is: it depends. It seems like there used to be a larger price differential between new and used cars, but not so much nowadays. The really cheap used cars tend to have tons of miles on them.

Anyway, I ended up going with the certified-used SUV. It's basically "like new", still has at least 5 years of warranty, has new tires and brakes, and seems solid overall. Not sure how much the dealer would come down on new ones, but they have many comparable trim level 2016's on their website for around $29K. A lot of the dealerships don't seem willing to negotiate much nowadays. There is one that has "up-front pricing", and they won't budge on that. At any rate, I probably would've been pushing $30K out the door for a new one, so spending $20K on this one is a compromise I can live with. Plus, it's a second vehicle, so it's just transportation to me, nothing special.

Thanks for all the advice, everyone :sharebeer

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Re: buying used car smarter than buying new?

Post by roflwaffle » Wed Aug 17, 2016 10:02 am

backpacker wrote:
roflwaffle wrote: My wife and I picked up a new plug-in Prius Advanced in July of 2014 for ~$29k, which was what used plug-in Prius models with the same trim/condition and ~10k-50k miles were listed at on cargurus, craiglist, cars(dot)com, etc...
http://slickdeals.net/f/6932762-2014-pr ... edit-0-apr
After the rebate/tax credit, it was less expensive than what we would have paid for a normal Prius with similar trim based on the lowest price on TrueCar. Now we can get a 2012/2013 pip advanced with ~50k miles for ~$19k (compared to $24k after rebate/tax credit), but that took a couple years and lower gas prices.
Hey, a fellow Prius driver! I agree that buying new looks pretty good in your case given the tax credits. State specific credits for new vehicles should be expected to push down the price of new vehicles compared to used vehicles.
roflwaffle wrote:How many miles/what trim was your 2013 when you bought it and what were the truecar prices? I'd look them up, but truecar drops older models which is kind of annoying. Certain cars also hold their value better in certain regions (eg hybrids in California, especially with carpool stickers), so location might have made a difference.
We bought a 2013 Prius two for $13,800 when the TrueCar price for 2015 Prius twos was about $21,000 (if I remember right). We're out in New Jersey, so a bit of a different market I suppose.
The state rebate wasn't that much ($1500) compared to the federal tax credit ($2500), but they both pushed down prices. The thing is, Toyota priced the car on the high side by making the base equivalent to a Prius III and the Advanced equivalent to a Prius IV in trim, so when CA hit the first limit for carpool stickers, sales dropped off a cliff and that's when TFS offered $4k off/0% financing on top of whatever you could negotiate with a dealer.

Being able to get a used prius of the same gen for 2/3rds the price (I'm assuming mileage/condition were low/good) is awesome.I've noticed that used Toyota/Honda/Etc prices seem to track new prices pretty well for newer/lower mileage cars in CA, but not in other states/regions.

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Re: buying used car smarter than buying new?

Post by TonyDAntonio » Wed Aug 17, 2016 10:16 am

My son drives my late mother's 1999 Champagne Toyota Camary. It no longer has hub caps and looks like shxt but he still drives it 25 miles to work every day and loves it (what's not to love, it was free). There are so many of these things on the road that he started calling them the Golden Dragons (no idea why). Honestly, Toyota should have made enough money on these cars to retire.
dm200 wrote:What I am also noticing recently is that a number of folks have older Toyota Camrys (late 90's to early 2000's) that they bought new, drive few miles and take good care of. I actually bought one of these late last year.

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Re: buying used car smarter than buying new?

Post by sunny_socal » Wed Aug 17, 2016 10:26 am

I think it depends on the starting MSRP the most. German cars, SUVs and big trucks tend to have big sticker prices, 50k to 100k. These will indeed depreciate very quickly during the first year. Little Japanese economies don't take much of a hit and make sense to buy new.

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Re: buying used car smarter than buying new?

Post by backpacker » Wed Aug 17, 2016 11:17 am

stoptothink wrote:
backpacker wrote:
stoptothink wrote:
backpacker wrote: Well, what model are you trying to buy? I'll be convinced once I've looked for five minutes and haven't found anything. :D
Hyundai elantra GT with a manual transmission. A local dealer, who I bought my previous vehicle from, offered us $16.5k OTD just a few weeks ago with the recent "end of summer" Hyundai rebates. We passed, as it wasn't good enough of a deal to have us bite a year before we really need the vehicle. Here is what is available used within 100 miles of us http://www.carfax.com/vehicles/Used-Hyu ... ion-Manual. I could either buy one new or spend $15-16k OTD on a used one with 20k+ miles. Keep in mind, this is a Hyundai, which is still known for having low resale. If you want a really good example, Toyota Tacoma is the most common.

I'm definitely not opposed to buying used, I've never owned a new car in my life, but 1-3yrs, 20K+ miles, and not knowing how it was treated by the previous owner(s), is definitely worth the ~10% price differential to us.
It does seem that Elantras are weirdly hard to find. There's this used 2016 near you for $13,700 or so after taxes. Saving $2,800 while driving a used vehicle from the same year looks pretty good! Of course, you could decide that buying the new car makes you happy and should do that if it does. It's like buying caviar instead of tuna. Not a better deal, but doesn't mean you shouldn't do it if you like caviar.
Tax, title, and license would be more than $800 (sales tax alone is ~$900 here for that vehicle), probably more in the range of $1500+. That car isn't leaving the lot for <$14k.
Note that we're compared a negotiated new car price with a non-negotiated used car price. This artificially shrinks the difference in price between buying new and buying used. Your taxes and fees should be no more than about $1300.* If the dealer comes down even a couple hundred bucks, you have your +15% savings for buying a used 2016.

*Assuming you pay the 6.85% Utah sales tax, average documentation fees of about $300, and the Utah registration fee of $150 for a car manufactured since 2014.

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Re: buying used car smarter than buying new?

Post by stoptothink » Wed Aug 17, 2016 11:32 am

backpacker wrote:
stoptothink wrote:
backpacker wrote:
stoptothink wrote:
backpacker wrote: Well, what model are you trying to buy? I'll be convinced once I've looked for five minutes and haven't found anything. :D
Hyundai elantra GT with a manual transmission. A local dealer, who I bought my previous vehicle from, offered us $16.5k OTD just a few weeks ago with the recent "end of summer" Hyundai rebates. We passed, as it wasn't good enough of a deal to have us bite a year before we really need the vehicle. Here is what is available used within 100 miles of us http://www.carfax.com/vehicles/Used-Hyu ... ion-Manual. I could either buy one new or spend $15-16k OTD on a used one with 20k+ miles. Keep in mind, this is a Hyundai, which is still known for having low resale. If you want a really good example, Toyota Tacoma is the most common.

I'm definitely not opposed to buying used, I've never owned a new car in my life, but 1-3yrs, 20K+ miles, and not knowing how it was treated by the previous owner(s), is definitely worth the ~10% price differential to us.
It does seem that Elantras are weirdly hard to find. There's this used 2016 near you for $13,700 or so after taxes. Saving $2,800 while driving a used vehicle from the same year looks pretty good! Of course, you could decide that buying the new car makes you happy and should do that if it does. It's like buying caviar instead of tuna. Not a better deal, but doesn't mean you shouldn't do it if you like caviar.
Tax, title, and license would be more than $800 (sales tax alone is ~$900 here for that vehicle), probably more in the range of $1500+. That car isn't leaving the lot for <$14k.
Note that we're compared a negotiated new car price with a non-negotiated used car price. This artificially shrinks the difference in price between buying new and buying used. Your taxes and fees should be no more than about $1300.* If the dealer comes down even a couple hundred bucks, you have your +15% savings for buying a used 2016.

*Assuming you pay the 6.85% Utah sales tax, average documentation fees of about $300, and the Utah registration fee of $150 for a car manufactured since 2014.
Even if that all was the case, is a discount of 15% worth 20K miles, less warranty, and an unknown history? You may think so, but clearly I am not alone in saying no, and I've never purchased a new car. Others have shared their own anecdotes.

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Re: buying used car smarter than buying new?

Post by backpacker » Wed Aug 17, 2016 12:14 pm

stoptothink wrote:
backpacker wrote:
stoptothink wrote:
backpacker wrote:
stoptothink wrote:
Hyundai elantra GT with a manual transmission. A local dealer, who I bought my previous vehicle from, offered us $16.5k OTD just a few weeks ago with the recent "end of summer" Hyundai rebates.
It does seem that Elantras are weirdly hard to find. There's this used 2016 near you for $13,700 or so after taxes.
Tax, title, and license would be more than $800 (sales tax alone is ~$900 here for that vehicle), probably more in the range of $1500+. That car isn't leaving the lot for <$14k.
Note that we're compared a negotiated new car price with a non-negotiated used car price. This artificially shrinks the difference in price between buying new and buying used. Your taxes and fees should be no more than about $1300.* If the dealer comes down even a couple hundred bucks, you have your +15% savings for buying a used 2016.

*Assuming you pay the 6.85% Utah sales tax, average documentation fees of about $300, and the Utah registration fee of $150 for a car manufactured since 2014.
Even if that all was the case, is a discount of 15% worth 20K miles, less warranty, and an unknown history? You may think so, but clearly I am not alone in saying no, and I've never purchased a new car. Others have shared their own anecdotes.
Fair enough. Some of this may come back to what bottlecap said above about risk attitudes.

Myself, I wouldn't worry about the history of a car with a clean title that was less than a year old. The five year comprehensive warranty transfers. You lose powertrain coverage between five and ten years, but the odds of a powertrain failing in that range are small and the odds of Hyundai paying for the repair even if it happens even smaller. The extra mileage does matter for resale value, but an extra 20,000 miles on a car ten years from now won't make much difference. The cost of repairs could be marginally higher, but will be covered by the marginally higher cost of insurance for the new vehicle.

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Re: buying used car smarter than buying new?

Post by randomguy » Wed Aug 17, 2016 12:35 pm

stoptothink wrote:
backpacker wrote: Note that we're compared a negotiated new car price with a non-negotiated used car price. This artificially shrinks the difference in price between buying new and buying used. Your taxes and fees should be no more than about $1300.* If the dealer comes down even a couple hundred bucks, you have your +15% savings for buying a used 2016.

*Assuming you pay the 6.85% Utah sales tax, average documentation fees of about $300, and the Utah registration fee of $150 for a car manufactured since 2014.
Even if that all was the case, is a discount of 15% worth 20K miles, less warranty, and an unknown history? You may think so, but clearly I am not alone in saying no, and I've never purchased a new car. Others have shared their own anecdotes.
It should be pointed out that this particular car is a rental. Maybe I am paranoid but I have to imagine the market for manual, eco box rentals is people who are learning to drive manuals and want to abuse a car other than their own. I might be paranoid though:)

One thing I have noticed is that I find getting a 20% discount on a 50k luxury car always seems like a better deal than getting 20% off a 15k econobox. Probably not 100% logical but saving 10k versus 3k seems like a lot bigger deal.:)

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Re: buying used car smarter than buying new?

Post by stoptothink » Wed Aug 17, 2016 1:03 pm

randomguy wrote:
stoptothink wrote:
backpacker wrote: Note that we're compared a negotiated new car price with a non-negotiated used car price. This artificially shrinks the difference in price between buying new and buying used. Your taxes and fees should be no more than about $1300.* If the dealer comes down even a couple hundred bucks, you have your +15% savings for buying a used 2016.

*Assuming you pay the 6.85% Utah sales tax, average documentation fees of about $300, and the Utah registration fee of $150 for a car manufactured since 2014.
Even if that all was the case, is a discount of 15% worth 20K miles, less warranty, and an unknown history? You may think so, but clearly I am not alone in saying no, and I've never purchased a new car. Others have shared their own anecdotes.
It should be pointed out that this particular car is a rental. Maybe I am paranoid but I have to imagine the market for manual, eco box rentals is people who are learning to drive manuals and want to abuse a car other than their own. I might be paranoid though:)
That is definitely not something I missed. IMO, that suggests there is a high likelihood that this vehicle has been treated a bit more rough than I like, hence why it is cheaper than other options. Just another reason to think buying new might be the best option in this particular case. We've got another year to make that decision.

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Re: buying used car smarter than buying new?

Post by backpacker » Wed Aug 17, 2016 1:57 pm

stoptothink wrote:
randomguy wrote:
stoptothink wrote:
backpacker wrote: Note that we're compared a negotiated new car price with a non-negotiated used car price. This artificially shrinks the difference in price between buying new and buying used. Your taxes and fees should be no more than about $1300. If the dealer comes down even a couple hundred bucks, you have your +15% savings for buying a used 2016..
Even if that all was the case, is a discount of 15% worth 20K miles, less warranty, and an unknown history? You may think so, but clearly I am not alone in saying no, and I've never purchased a new car. Others have shared their own anecdotes.
It should be pointed out that this particular car is a rental. Maybe I am paranoid but I have to imagine the market for manual, eco box rentals is people who are learning to drive manuals and want to abuse a car other than their own. I might be paranoid though:)
That is definitely not something I missed. IMO, that suggests there is a high likelihood that this vehicle has been treated a bit more rough than I like, hence why it is cheaper than other options. Just another reason to think buying new might be the best option in this particular case. We've got another year to make that decision.
This is something people always say, but I've never seen any actual data supporting the idea that former rental cars are less reliable than other used cars.

If anything, the fact that most of their miles are highway miles suggests that they should be more reliable than other used cars. That a car has made it the first 20k miles also means its likely not defective. With a new car, you have no idea. There could be a factory defect that kills the transmission ten miles down the road.

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Re: buying used car smarter than buying new?

Post by stoptothink » Wed Aug 17, 2016 2:01 pm

backpacker wrote:
stoptothink wrote:
randomguy wrote:
stoptothink wrote:
backpacker wrote: Note that we're compared a negotiated new car price with a non-negotiated used car price. This artificially shrinks the difference in price between buying new and buying used. Your taxes and fees should be no more than about $1300. If the dealer comes down even a couple hundred bucks, you have your +15% savings for buying a used 2016..
Even if that all was the case, is a discount of 15% worth 20K miles, less warranty, and an unknown history? You may think so, but clearly I am not alone in saying no, and I've never purchased a new car. Others have shared their own anecdotes.
It should be pointed out that this particular car is a rental. Maybe I am paranoid but I have to imagine the market for manual, eco box rentals is people who are learning to drive manuals and want to abuse a car other than their own. I might be paranoid though:)
That is definitely not something I missed. IMO, that suggests there is a high likelihood that this vehicle has been treated a bit more rough than I like, hence why it is cheaper than other options. Just another reason to think buying new might be the best option in this particular case. We've got another year to make that decision.
This is something people always say, but I've never seen any actual data supporting the idea that former rental cars are less reliable than other used cars.

If anything, the fact that most of their miles are highway miles suggests that they should be more reliable than other used cars. That a car has made it the first 20k miles also means its likely not defective. With a new car, you have no idea. There could be a factory defect that kills the transmission ten miles down the road.
There is a reason former rental cars are cheaper than 1-owner vehicles. You may agree or disagree with that reason, but it exists.

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Re: buying used car smarter than buying new?

Post by backpacker » Wed Aug 17, 2016 2:19 pm

stoptothink wrote: There is a reason former rental cars are cheaper than 1-owner vehicles. You may agree or disagree with that reason, but it exists.
Well, some people avoid index funds because they think active funds are better. Some people avoid former rental cars because they think one-owner cars are better. People thinking they have good reasons and acting accordingly does not show they actually have good reasons. :happy

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Re: buying used car smarter than buying new?

Post by stoptothink » Wed Aug 17, 2016 3:30 pm

backpacker wrote:
stoptothink wrote: There is a reason former rental cars are cheaper than 1-owner vehicles. You may agree or disagree with that reason, but it exists.
Well, some people avoid index funds because they think active funds are better. Some people avoid former rental cars because they think one-owner cars are better. People thinking they have good reasons and acting accordingly does not show they actually have good reasons. :happy
Terrible analogy, but I see it is pointless trying to convince you that your sweeping generalization is not always correct :sharebeer .

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Re: buying used car smarter than buying new?

Post by randomguy » Wed Aug 17, 2016 6:04 pm

backpacker wrote:
This is something people always say, but I've never seen any actual data supporting the idea that former rental cars are less reliable than other used cars.

If anything, the fact that most of their miles are highway miles suggests that they should be more reliable than other used cars. That a car has made it the first 20k miles also means its likely not defective. With a new car, you have no idea. There could be a factory defect that kills the transmission ten miles down the road.
Why do you assume the miles are highway? Maybe the car was owned in an area where tourists like to do 10 5 mile trips/day. You have no way of knowing. You have to make a guess and hope it pans out.

In the end nobody is going to convince anyone else
a) used car buyers will compare MSRP to what they paid so they can feel good about their 30%+ savings
b) new car buyers will compare out the door prices and value those used up miles so they can feel good about paying 1k more not to have to worry about the usage of the car by the previous owners (i.e. with say 40 renters, what do you think the odds of one of them smoking in the car is? 99% 100%?)

And honestly if you would rather have 30k for problems to show up instead of 100k, we live in different worlds:) Yes out the door failures happen. The number of failures that show up with a bit of wear is a lot more.

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Re: buying used car smarter than buying new?

Post by backpacker » Wed Aug 17, 2016 6:35 pm

randomguy wrote: In the end nobody is going to convince anyone else
a) used car buyers will compare MSRP to what they paid so they can feel good about their 30%+ savings
b) new car buyers will compare out the door prices and value those used up miles so they can feel good about paying 1k more not to have to worry about the usage of the car by the previous owners (i.e. with say 40 renters, what do you think the odds of one of them smoking in the car is? 99% 100%?)
Here here. I think the thing that's hard about thinking about car buying is that there is so much motivated thinking by everyone. We all just want to be happy with whatever we in fact did, so pick up whatever conventional wisdom supports our choice. I'm sure I'm guilty of this as much as anyone. All the more reason to work hard to see if conventional "wisdom" really has anything to it.

Take the conventional wisdom that fewer drivers is better for example. Why would that be? Say one in ten drivers rides the breaks and that the longer this happens, the sooner they will need to be replaced. If a car has had only one driver for 30,000 miles, there is a one in ten chance that the one driver will have spent 30,000 miles damaging the breaks. If the car has had ten drivers, then probably about one driver damaged the break for about 3,000 miles. More drivers reduces the variance in driving quality just like more stocks reduces the variance in returns.

Now that might not be right. But hard to see why it would be obviously wrong either.

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Re: buying used car smarter than buying new?

Post by randomguy » Wed Aug 17, 2016 6:58 pm

backpacker wrote: Take the conventional wisdom that fewer drivers is better for example. Why would that be? Say one in ten drivers rides the breaks and that the longer this happens, the sooner they will need to be replaced. If a car has had only one driver for 30,000 miles, there is a one in ten chance that the one driver will have spent 30,000 miles damaging the breaks. If the car has had ten drivers, then probably about one driver damaged the break for about 3,000 miles. More drivers reduces the variance in driving quality just like more stocks reduces the variance in returns.

Now that might not be right. But hard to see why it would be obviously wrong either.
You are making a bet that it is the average driver that matters. I am guessing that the outlier (i.e. the really bad driver) matters more. Too much braking for example isn't a big deal. That is one brake job. Heck it would probably show up during an inspection. The one offs (i.e say overheating the engine, dropping into neutral from drive,...) would worry me a more. And for a manual having 30+ people having to adapt to the clutch and shifter seems like a lot more wear than a car where 1 or 2 people learn it once and then shift normally.

I must admit I would love to know this cars history. Figuring out what the rental market for a manual hyundai elantra where they put on 21k in 8 months doesn't sound remotely standard. I am dreaming up Bob's learn to drive a manual performance driving school where you have people with zero experience practicing shifting as fast from 0-100 (and 100-0) while going around some road track for 12 hours/day. As I said I can be paranoid:)

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Re: buying used car smarter than buying new?

Post by backpacker » Wed Aug 17, 2016 7:38 pm

randomguy wrote:
backpacker wrote: Take the conventional wisdom that fewer drivers is better for example. Why would that be? Say one in ten drivers rides the breaks and that the longer this happens, the sooner they will need to be replaced. If a car has had only one driver for 30,000 miles, there is a one in ten chance that the one driver will have spent 30,000 miles damaging the breaks. If the car has had ten drivers, then probably about one driver damaged the break for about 3,000 miles. More drivers reduces the variance in driving quality just like more stocks reduces the variance in returns.

Now that might not be right. But hard to see why it would be obviously wrong either.
You are making a bet that it is the average driver that matters. I am guessing that the outlier (i.e. the really bad driver) matters more. Too much braking for example isn't a big deal. That is one brake job. Heck it would probably show up during an inspection. The one offs (i.e say overheating the engine, dropping into neutral from drive,...) would worry me a more.
I suppose it depends on the specifics of how the damage works? Suppose a bad driver has a 5% chance of overheating the engine every 3k miles he drives. A good driver has 1%. Then, the single driver car will be more likely to have had the engine overheated multiple times, since it will be more likely to have had a bad driver for all 30k miles.

Having a single driver is only better when the expected damage done falls off fast enough as a function of time. Could be that your learning the clutch example works like that. If you're a bad driver, you'll damage the clutch in the first thousand miles, so it doesn't matter if you drive it 3k or 30k. I have no idea how this actually works though. Could be that bad drivers are always at risk of making shifting errors, so expected damage increases more or less linearly with time. In which case more drivers is better.
randomguy wrote: I must admit I would love to know this cars history. Figuring out what the rental market for a manual hyundai elantra where they put on 21k in 8 months doesn't sound remotely standard. I am dreaming up Bob's learn to drive a manual performance driving school where you have people with zero experience practicing shifting as fast from 0-100 (and 100-0) while going around some road track for 12 hours/day. As I said I can be paranoid:)
Ha!

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