Used cars, does the math work?

[Big_Hitter]

I am pretty surprised both by the variety and quality of the advice here. From a financial perspective, it makes far more sense to buy used, all factors held equal.

not if you spin a rod bearing, blow your tranny or something like that in warranty

 

[exnavynuke]

not if you spin a rod bearing, blow your tranny or something like that in warranty

Used doesn't have to mean no warranty. My current and my last car were both CPO with warranties.

 

[Sojourner]

From a financial perspective, it makes far more sense to buy used, all factors held equal. This is purely because depreciation can't fall that far if you don't pay that much. And because you buy used, you are much more likely to pay it off earlier and incur less interest expense on a loan. Additionally, insurance, registration, annual fees, repairs, are all way less.

But people are not financially rational when it comes to cars. They will pay an extra $10K, so they can minimize their chances of a $150 repair once a year. They will also pay $20K more just to justify the car of their dreams.

...

people are just making their decision on what car they want, and then coming up with some crazy financial justification post purchase that the car salesman probably planted in their head. People believe anything you tell them about cars

Hmm... Although I'm sure they're true of some people, these seem like fairly broad generalizations to me. While I agree that many people are not financially savvy when it comes to the "buy new vs. used" decision, just because this is the case doesn't mean that buying new isn't the right move in certain circumstances.

I happen to be in the market for a car right now, and I am leaning heavily towards buying new, even though my initial plan was to buy a 2/3 year used car. The reason "new" makes sense for me is that the market for the particular model I'm interested in is pretty thin, so the supply/demand ratio is not particularly in my favor. I could counter this by being very patient and simply waiting until I come across that perfect vehicle that has everything I want at a terrific, bargain price. But my circumstances don't allow for 3-6 months of waiting. I have a big road trip coming up soon that requires me to have the new car by then. Also, I tend to keep cars for 10+ years (the car I'm replacing is 17 years old), so the depreciation hit is less painful when spread out over all those years. Finally, I'm looking for a car with certain new technology/safety features that weren't broadly available 2-3 years ago.

So, all things considered, buying new is basically a no-brainer for me. Of course, I could save a few thousand by buying a 2013 or 2014 model, but I'd have to give up certain new tech features that I really want, and I'd have to shop around a lot more and for a lot longer. For me, in this particular situation, I'd rather get exactly what I want, exactly when I want/need it than to save a few thousand bucks on a "once every 10+ years" purchase.

 

[Mr._Graybeard]

And Unless you are buying a high end german sedan, repairs are just not that expensive.

My car-buying formula for the last 20 years is to seek out those ~10-year-old used high-end German sedans. The bigger Mercedes and BMWs are often owned by people who record each repair and sometimes each oil change. I do 90% of repairs myself, so that keeps the cost of maintenance low. You can see the build quality of these cars when you're wrenching on them -- it almost always makes the job easier.

In recent years I've extended that 10-year window to earlier models -- I'm not sure I'd get a BMW newer than the E39 chassis, for instance. There are just too many computerized components on them such as drive by wire, battery registration, etc. Call me a luddite.

 

[aja8888]

My car-buying formula for the last 20 years is to seek out those ~10-year-old used high-end German sedans. The bigger Mercedes and BMWs are often owned by people who record each repair and sometimes each oil change. I do 90% of repairs myself, so that keeps the cost of maintenance low. You can see the build quality of these cars when you're wrenching on them -- it almost always makes the job easier.

In recent years I've extended that 10-year window to earlier models -- I'm not sure I'd get a BMW newer than the E39 chassis, for instance. There are just too many computerized components on them such as drive by wire, battery registration, etc. Call me a luddite.

I agree on the newer BMW's. It's all tied to the shop diagnostic computer to get you back into the high priced service bay. I also do my own wrenching and have for decades.

 

[exnavynuke]

My car-buying formula for the last 20 years is to seek out those ~10-year-old used high-end German sedans. The bigger Mercedes and BMWs are often owned by people who record each repair and sometimes each oil change. I do 90% of repairs myself, so that keeps the cost of maintenance low. You can see the build quality of these cars when you're wrenching on them -- it almost always makes the job easier.

In recent years I've extended that 10-year window to earlier models -- I'm not sure I'd get a BMW newer than the E39 chassis, for instance. There are just too many computerized components on them such as drive by wire, battery registration, etc. Call me a luddite.

I do most of my own wrenching, and my E46 was still a money pit after ~100k miles.

 

[Mr._Graybeard]

I do most of my own wrenching, and my E46 was still a money pit after ~100k miles.

Yeah, I stay away from the 3s. Cheaper build quality than the 5s and 7s. Plus, they tend to get beaten a lot more than the bigger cars.

 

[HawkeyeNFO]

I bought an '03 E46 last year, and it seems to be "over-engineered" if you know what I mean. A loose wire under a seat leads to an indication of a faulty air bag system, and that sort of thing. If I took it to a dealer, I would be out nearly $1000, but instead I bought an inexpensive code reader and figured it out myself. Today's BMWs and most of their late models are certainly fun to drive, but seem to be designed for owners who can afford to be known at the dealership's service department by their first name.

 

[Bruceski44]

I'm digging the turn this thread has taken recently. I've been thinking about buying an older mid-range MB, BMW or Porsche and am wondering about these things:
1. Are shop manuals available and/or needed?
2. Are repair parts super-expensive?
3. Will dealers sell replacement parts to DIYers?
4. Are good, used parts available from salvage?
5. Any special tools needed for common repairs?

Thanks for any thoughts,
b

 

[orangehairfella]

From a financial perspective, it makes far more sense to buy used, all factors held equal. This is purely because depreciation can't fall that far if you don't pay that much.

I think this thread has shown multiple times that this traditional wisdom may not be true. See post #34

TLDR If you don't care about make, model, year, options, reliability, maintenance or mileage, used is great for you. If you have requirements besides "cheap initial purchase price" you may find, for certain brands and configurations, that a new car is cheaper over time than the same spec when purchased used.

 

[orangehairfella]

I do most of my own wrenching, and my E46 was still a money pit after ~100k miles.

I've owned three BMWs from 3 decades and every one of them has been a PITA. The e30 was the best of the bunch, and the simplest to work on, but it suffered the same cooling system problems as the other two.

I did all of my own wrenching when I was younger but I now find my time more valuable, especially my leisure time. This may reverse in ER, but for now I now favor reliability over a cold garage floor cursing the loss of my Saturday because I have to do all my own wrenching to justify owning the thing.

 

[exnavynuke]

I'm digging the turn this thread has taken recently. I've been thinking about buying an older mid-range MB, BMW or Porsche and am wondering about these things:
1. Are shop manuals available and/or needed?
2. Are repair parts super-expensive?
3. Will dealers sell replacement parts to DIYers?
4. Are good, used parts available from salvage?
5. Any special tools needed for common repairs?

Thanks for any thoughts,
b

Well, for my E46 the answers would be:

1. Available yes, needed only if you aren't good at the internet (there's DIY video's and/or walk-throughs for pretty much everything on the web now).
2. "Super expensive" is a relative term. More expensive than similar parts for a Ford or Toyota? Pretty much always.
3. I only needed to get parts from a dealer once and had no issues, the parts department was happy to sell it to me. The rest of the time I got my parts online as they were cheaper than paying dealer prices for the same thing.
4. Never salvaged for any parts, plenty of aftermarket stuff available and I generally feel that my time searching for the parts etc would negate the savings over buying aftermarket parts.
5. Yes, special tools were often required. OBDII readers aren't nearly as effective at reading codes on the one I had as the BMW diagnostics so I bought a Peake tool to get the BMW codes instead, oil filter required a 36mm socket iirc (I know I didn't have one at the time I bought it), special tool to remove the fan (gotta remove to do work on half the stuff in the front of the engine it seemed), etc.

 

[laurence]

I've had great luck with certified pre-owed BMW. My sister and my nanny went CPO on their cars (Mazda and Hyundai) and have been very happy as well. The 100k warranty makes it a nice compromise between used and new.

 

[Mr._Graybeard]

My '95 540i (an E34 chassis) has 270,000 miles on it -- 190,000 under my ownership. The transmission shifts smoothly and the engine consumes no oil between 10,000 mile change intervals. The car has gotten a new water pump every 80,000 miles and a new radiator at 200K. If I make it to 300k (and it seems that I could if I want to hang onto the car) I'll probably treat it to another radiator.

The engine required some new intake and cooling system gaskets around 215K (the infamous "valley pan" job). I replaced them in an afternoon. Edit: Oh, and I rebuilt the transmission valve body around 150,000. Kinda fun, actually.

Control arm bushings are a wear item, particularly the uppers. The SOP is to replace the entire control arm. The lower control arms on my car lasted 175,000 miles before they were worn out. The uppers may last 100K with luck.

Yes, it's required some repairs. But I paid $9k for it in 2005, and for that money vs the mileage it's seen, I'd say it owes me nothing at this point. This was my road warrior on a 90-mile round-trip commute from 2005 through half of 2013.

Orangehairfella, I've owned an E30 as well. To me it's the best 3 series model, although I haven't owned an earlier E21. Yes, it needed attention, and I never got the AC to run right. That said, my car was a cabriolet, so I didn't care much about air. The car's biggest weak spot was the timing belt ... what were they thinking? Every other BMW engine has had a chain. And again, control arms are a wear item.

The E30 took me to work in fair weather from 1997 to 2002. The foul-weather ride was an '87 Audi 4000cs quattro. (Wanna talk money pit?)

BTW, I just picked up another E34 BMW -- this one's a 1995 525i wagon with 190,000 miles. Got it for $2500, with a manual transmission conversion kit and manual driveshaft thrown in. It needs a little work, but hey, I'm retired. I figure it's good for another 100K miles.

The key to this approach to motoring is to have a backup car in the wings. You don't want to be in a position where you HAVE to fix something today, or tonight. I remember changing exhausts on a 5-year-old Ford at 3 a.m. so I could drive it to work the next afternoon (I worked second shift). And it seemed like every other bolt on that Ford was rusted solid. In 20 years I can count the number of broken BMW bolts I've seen on one hand.

Bruceski, if you're looking for a vintage German that is a nice weekender, you might consider a WELL-KEPT early-mid 80s Mercedes Benz turbodiesel (W123 chassis). The engine management is totally mechanical, and the diesel engine is just fun. They're a bit messy (oil drips), though. Fuel mileage is in the mid-20s and the seats, when they're right, are incredibly comfortable. There is a big cult following for these cars -- in part because you can run them (to their detriment) on french-fry grease.

I drove an '82 300D coupe to work from 2002 to 2003, when it got rear-ended on the freeway. I replaced it with a rusty 300TD wagon that I finally took out of service around 2011.

The R107 roadsters from the period are also nice, but thirsty. If you want any power to go along with that sleek look, you'll pay for it at the gas pump.

The W126 Mercedes-Benz coupes are a work of art, but again they aren't gas misers. Again, a very nice vintage toy.

I am a real fan of the E34 BMW 5 series (1988-1995) but I'd take a chance on the later E39 chassis (1996-2003). Every used BMW I buy gets an overall inspection by a third-party mechanic before I part with any cash.