Used Cars = Someone else's lemon

[walkinwood]

I have bought used cars from individuals and so far have been happy with my purchases.

I bought from people who:
- kept a clean home/garage
- had receipts of work done on the car
- were straightforward and competent in their communications with me

The last time I bought, I also ran a carfax report.

Last step - I took the car to MY mechanic for a thorough check-up. Don't skimp on this part.

All the best.

[imoldernu]

1. 1998 Town Car... $40K list, paid $18K... in 2000... w/25K miles. Now 117K miles. Total non regular maintenance cost over 13 years - $1000 for A/C repair.

2. 1996 Cadillac SLS ... $47K list, paid $5500 in 2005 (estate car) w/26K miles. Now 68K miles. Total non regular maintenance cost over 8 years. $300 ignition key, $500 broken brake line (road debris).

3. 1996 Grand Marquis... For Florida/camp or family use (estate car). $28K list, paid $3000 in 2010 w/65K miles now 73K miles. . Total non regular maintenance cost over 3 years $1500- for product defect intake manifold.

25 ownership years, Less than $4,000 in non regular maintenance repairs. (another $2000 for pending non-critical fixes... ).

Total Car costs other than gas, regular maintenance and insurance, $25.5K plus $6K = $31,500 or $1260/ownership year.

....................................

A Love Affair... don't want another car. Like the luxury, the comfort, the speed and the looks. All three cars are near-showroom perfect.

[ERhoosier]

Not sure there is a single right answer for everyone. Over the yrs I've bought new & used, as well as leased. Usu keep my 'purchased new' cars for 4-9yrs. For TOTAL cost of driving, I think you can sometimes do well with some of the major car makers' advertised lease specials on low-mid range vehicles (IF your credit rating qualifies). But these are usu only for specific model & equipment level. Options can skyrocket your net cost. At least for 3yr lease you have pretty well fixed your costs (factory warranty during entire lease term). Reliable older car is usu lowest cost of driving, BUT unforeseen repairs turn an older car into a money pit if you don't know when to give up on it. I've had 3yr leases that cost me less $$ overall than multiple relatives have put into their 3yrs of ownership of their various mid-age used cars. Old car upkeep (tires, brakes, battery, eventually timing belt, etc.) adds up, and one major system repair (e.g. tranny, engine, even computer system) can exceed 2-3 yrs depreciation for many econo or mid-range cars. And newer cars usu get better mileage ($ saved) and have more safety features (lower medical payments insurance).

Bottom line- ya pays yer $$ & takes yer chances

[RunningBum]

I wondered whether the 20K/14K numbers were accurate, so I checked the first car I thought of that I knew was around $20K, the Mazda3. According to Edmunds.com, a new 2013 Mazda3 is $20,0xx, and a used 2010 has a value of $14,0xx. Almost bang on. So I don't see a flaw in your logic assuming a 10 year ownership.

The only advantage for used I might see is that a new car might have an unknown track record if they've made changes to the model whereas after 3 years you know more about its reliability, but I think that's offset by unknowns about how the used car has been treated. Even if you have maintenance record, if the original driver broke it in rough, is a heavy braker, drove it on rough roads, etc, it may have a shorter life span. A good mechanic can probably see this on an inspection.

The other obvious reason people buy used is it may be all they can afford, but your concern seems to be getting the best long term value.

I like buying new because I can get the model trim, options and color I want rather than settling for what's available in a good used car. And of course I like having those first 3 years of a newer car.

I also hate the whole car buying process, so doing it less often is good for me.

[Walt34]

Having had awful luck with used cars in the past we buy new but then keep them until either reliability or parts availability become issues. My 2003 GMC 4WD pickup and has been a peach so far with 85k miles on it (barely broken in) and DW's 2003 Buick Century with 156k miles on it has needed a new radiator, but no other unscheduled maintenance. Both replaced vehicles that were 18 and 14 years old, both also bought new.

So I figure if we're going to keep them that long depreciation becomes much less of an issue. And like Tom52 I've known people who do minimal or no maintenance and then trade in every 2 or 3 years. I don't want one of those cars.

As with so many other things "you pays your money and takes your chances".

[KM]

Quote:

Originally Posted by Mulligan Bogleheads have had a thread on this before, and there have been a few that swear by leasing mid value cars as the most cost efficient way to own a vehicle. I would never go that route just because I don't know a lot about the process and they would screw me somehow on it.

We leased once, for a specific reason (I needed a fairly new, reliable car and we didnt really have much for a down payment).

I guess if you want new every 3 years or so, it's not a bad gig. But I wouldnt do it again. After we were done, I didnt feel it was a good overall value. Probably depends on your needs, deal and how many miles you drive.....

[BLS53]

I would bet that most people who think cars become maintenance hogs after 100k miles, haven't owned a car past 100k miles. Or at least not any built in the last decade or so.

On later model cars, there's not much required maintenance in the first 100k, other than oil and filter changes. So there's not much maintenance the original owner could defer that's going to affect the long term durability. I think most new car owners do oil changes. Mainly because it's inexpensive, and if nothing else, it keeps the warranty in effect. If the car has been abused, that's going to be evident with a rather basic test drive and inspection. I personally steer clear of performance oriented cars, because people buy them for a reason. They want to drive them hard.

I think the Japanese cars are better philosophy is dated. As with the 100k mile theory, most of these folks haven't owned an American car in decades, so any thoughts are anecdotal.

The proliferation of safety devices on late model cars is a drawback for me. While I don't want to go back to metal dashboards and no seat belts, I don't need tire pressure monitors and back-up cameras. All this stuff just require more maintenance as the car ages. The tire pressure monitors are a major headache, when you buy new tires. I've made it 60 years without all this stuff, and at this point, if I die in a car crash, so be it. Another thing is these complicated radios, that allow people to conduct their lives as they drive. More stuff to break. Give me an AM/FM with a CD player, that I don't have to be a tech wizard to operate.

I find 5 years old/75k miles to be the sweet spot on modern used cars. One can drive them another 5 and 75k, with minimal maintenance expense.

[travelover]

Quote:

Originally Posted by BLS53 ........ I think the Japanese cars are better philosophy is dated. As with the 100k mile theory, most of these folks haven't owned an American car in decades, so any thoughts are anecdotal........

One way to take advantage of this is to buy a used American car with just a few miles on it. They depreciate faster than Asian cars, but as noted, have nearly the same reliability.

DW bought a 2004 Taurus in 2005 for $10K with 17,000 miles on it. She is at 95,000 now with just tires, brakes, a battery and filters as expenses. It is not a car anyone would rave about, but it is a comfortable and safe commuter car for her.

[brett]

We had both new and used Japaneese labels(personal vehicles) at the same time as I had a new domestic model every year from my employer.

I saw a huge difference in the quality of the service. As I think back to the domestic company cars...one (a top of the line luxury sedan) was actually delivered with rad hoses that we not tightened, ie the new car leaked rad. fluid over a 600mile trip accross the Rockies. It was discovered at the other end by the dealer during an oil change. He could not believe it.

The second was delivered with a non functioning heater. We discovered this on a weekend road trip..in November. It took two trips back to the dealer to get this fixed.

The third was fine.

The fourth....well after the tranmission was replaced at 17K miles, it was given back to me with the engine light on. Another dealer figured that it was a computer module. No control modules of course because everyone had the same issue. Off the road for another two weeks. That made a total of five weeks that we had to pay for a rental. Most of our fleet cars of a certain model that year had either a defective power steering hose. We had six cars vehicles off the road.

The next year was not bad. Just a very noisy transmission and a major front end problem. As the business manager of the division, my cost center had to continuously pick up the cost of rental units while vehicles were in the shop....often more than once for the same complaint.

So for me, it was not an urban legend, it was reality. Some of the dealerships appeared to be as haphazard as some of the manufacturing processes. I would not have wanted to own any of these vehicles after three or four years.

It is little wonder that the manufacturer's market share has changed so much over the past ten years. People get tired of buying lemons. I believe the domestic labels are improving. But not fast enough and they are still well behind from my perspective

If you want to get an good indication, ask an auto leasing agent about the buyout numbers on the domestic brands vs some of the import labels. There is a very good reason why the domestic brands depreciate so much faster.

[HighRoller]

The last used vehicle I bought was back in the early 90's. It was a 2 year old GMC pickup that had about 25k miles on it when I bought it. I sold it about 18 months later after replacing the complete drive train. (over $10k in parts and labor), Fortunately I had bought an extended warranty on it so I only paid a small amount for each repair but it was in the shop a lot and I could never depend on it. Since then I have only bought new vehicles (GM, Nissian and Toyota) and the only problems I've had with any of them were a couple of factory recalls. (Both were minor fixes and were done free and very quickly)

[pb4uski]

I've only had 2 new cars in the last 30 years. Never had a big problem with used cars. I usually buy them from a reputable dealer when they still have a bit of bumper-to-bumper factory warranty left, and try to buy models that still have a longer powertrain warranty in case the vehicle has major problems.

We bought a certified truck back in 2006 and as luck would have it, the head gasket went bad after the original manufacturer's 36,000 mile warranty was past but before the added 3,000 miles because it was certified had expired (edged in under the warranty by about 500 miles) so the $3,500 repair was fully covered. Whew!

[JoeWras]

Quote:

Originally Posted by Tom52 I would rather buy new and keep it for 10 years. The depreciation factor is offset by piece of mind knowing exactly what I've got.

+2. I keep cars at least 12 years. With that in mind, owning from new make sense. I know the exact history of this car, and maintain it like a madman.

12 years is my general minimum. It is usually keep them 15 or more. First year depreciation falls away for the most part with this kind of ownership period.

[leftbucket]

If you are okay with a little elbow grease and footwork, I have found the sweet spot to be ~10 year old Japanese luxury cars.

By them for about $4500-6500 at around 10 years old.

Investigate the model thoroughly beforehand. Being 10 years old, all likely
large-scale problems will be known...engine/transmission, etc.

Haggle hard.

Do a little spit and polish if necessary, then do nothing but the necessities (oil changes, brakes, exhaust, etc.) for five years.

Chances are very good it will still be running well in five years and you can sell it for $2000-3500 or push it some more and hang on.
If it breaks early, sell it for $500-1000 and you still haven't lost much.

Meanwhile you're driving around in a vehicle that's 90% as good as a $30-45,000 car for a fraction of the price. People generally tend to take care of a luxury car and usually have decent records, too.

My wife drives an 11 year old Acura and I drive a 15 year old Lexus.
People probably think I'm overpaid.

[Katsmeow]

I must admit that I am a new car buyer. I do think there is more risk in buying a used car. Yes, you can get a Carfax (I certainly would) and get a car checked, etc. but that doesn't eliminate risk.

A few years ago I considered buying a used car. I had a friend who bought a certified pre-owned Lexus. It was about 3 years old and was very nice looking. However, for the car I was looking for (a Prius at the time) I found that there was virtually no discount for buying a car that was 2 years old versus a new car.

We tend to buy new cars and keep them a long time.

Another factor in buying newer cars is that cars really are improving. The newer vehicles are simply much safer than older cars. I find that matters to me. Also, after having good back up cameras I would never own a car without one. The car I am driving now has adaptive cruise control and that is a feature that you get used to very quickly.

If I am spending money for a car I usually want to get the most up to date safety features particularly since I know I will be keeping that car for a long time.

[ERhoosier]

Seems like many here have had great experiences (luck?) with their older cars. Just to give other side of things- 2 not-so-lucky stories from close Midwest relatives:
1. Bought used 4yr old mid-size sedan from trusted neighbor who bought it new & kept meticulous care of it with all maint records. Paid only ~$10k for this cream puff w/35k mi (preferred to sell to friend vs dealer @ trade-in value) . Car ran perfect for 18mo, then over next 18-20mo (35+k miles) needed pwr window fixed ($250), new brakes/rotors ($750), timing belt (scheduled @ 60k mi, $1100 inc water pump as it's little extra labor during TB replacement), & new tires ($600). Then tranny went (~71k mi) costing $2950 for rebuild. So almost $6k in maint + repairs plus ~$5k in (private sale-not trade-in) depreciation, or ~$11k ($3,667/yr) for bit over 3yrs/36k mi for a 4-7yr old sedan.
2. 3yr old mid-size SUV w/37k mi. Over same 3yr period- brake pads/rotors ($825), timing belt ($775, sched maint @60k), 4wd system repair ($875), and tires ($625). So 'only' $3,100 in repairs/maint but also another $9k depreciation so $12k ($4k/yr) for again 3+yr/37-38k mi.

IMHO- Annual depreciation is still surprisingly significant for 3-4yr old vehicle (unless you keep it many yrs), and many folks do not have a great repair expense experience. So for scenario of buying 3-4yr old vehicle & driving for ~3yrs, overall costs can be surprisingly similar to some better corp lease deals. Examples from recent national/regional (US mainland) car maker (NOT dealer) web ads: Total costs (mo pmts + downpmt + acquisition/disposal fee) for 3yr/36k mi lease specials included ~$8100 for Toyota Corolla sedan and ~$11k for Honda CRV SUV.

For car guys like JoeWras, I tend to agree that buying new & running for dozen yrs is prob perhaps best way to go.
And I think leftbucket's scheme can work too, although maint/repairs on luxury cars can be more expensive than for more common vehicles.

DISCLAIMER- I am not employed in auto industry, take good care of my rides, & tend to prefer mid-range vehicles. My last 3 vehicles were a 3yr lease, new purchase kept 9 yrs, and new purchase kept 4 yrs.

[Mulligan]

Now I admit I am on the "cheapo" end of the car spectrum, but in my state keeping older cars brings about significant savings in property tax and insurance. I easily save over $1500 a year in avoiding new car property tax expense and full coverage insurance.

[ERhoosier]

BTW- Some tech gadgets are getting cheaper all the time. Aftermarket back-up cameras can be easy to install & pretty inexpensive-
Back-up Camera 2.4 - product summary - Bing Shopping

[ohyes]

This thread has been a real eye-opener. I thought, based on what I had read, that buying used was the only smart way to go. After buying three new Fords in a row (all with expensive repairs in 2-3 years), it made sense. We have bought used since, and had good luck. Perhaps it was just luck.

A 1998 Acura RL was, hands down, the best purchase. We gave it our youngest son who showed no interest in buying a car. We were afraid we would have to taxi him around forever. Our oldest two kids saved like maddogs to purchase their first car. The Acura is going strong at 150,000 miles--with a few more dents now.

Our present car is a used Chevy Impala, purchased from Enterprise. Since purchasing it, we have heard horror stories about buying from a rental place--how renters will add water to gas tank before returning, etc. It has been a very good car, except for electronic door locks. Only one still works. We probably will not again go that route.

DH drives a a 1994 teal green Ford Ranger. Every few weeks, i try to convince him to buy newer. It's seldom used, except to haul stuff, and DH does not see the point. I get that, but feel like a eccentric old couple when we putt putt around town in the tiny thing.

Next car, if not an Acura, might be a Subaru. I like what my friends who drive them share.

Never another Ford. Funny how different folks have different experiences. My parents and brother think Ford is the only decent make for patriotic Americans, lol. And, none of them had the same bad luck we did.

[BLS53]

Quote:

Originally Posted by travelover One way to take advantage of this is to buy a used American car with just a few miles on it. They depreciate faster than Asian cars, but as noted, have nearly the same reliability. DW bought a 2004 Taurus in 2005 for $10K with 17,000 miles on it. She is at 95,000 now with just tires, brakes, a battery and filters as expenses. It is not a car anyone would rave about, but it is a comfortable and safe commuter car for her.

The 1996-2007 Taurus' are a good used car value. I've owned 2 of them, a 2000, and 2004. I ran both of them over 150k miles, with just tires, brakes, and the battery being replaced. Just traded the 04 in on a 2007 Fusion this past July.

[cjogo]

ohyes

Bought 1 new car since 1967 __ Buy the best rated car used

Our present ACURA RL was $45k new _ 15 years ago... we bought it used > one owner > meticulous @ $10,000 with 75k > 12 years ago.

200k now with little or no problems. Research




They don't make em' like this anymore