Used cars, does the math work?

flyingaway said:
If I have the money, I will never buy a used car (again). If you buy a used car privately, you run lots of risks. If you buy it from a dealer, the dealer has to make a profit and your benefits of buying a used car gets cut.

On the other hand, I would keep my car until it dies.
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There is definitely a risk, which is why I wouldn't have bought used without a decent discount. This is our fourth Honda, so we pretty much know exactly what we are getting in terms of manufacture quality. (I'll update my post if it turns out the car is a lemon.)

One of the reasons we decided to buy used was it focuses us on our long term plan to FIRE. A financial adviser we met with a few years ago told us that an upper middle class couple could expect to spend as much on their last car as they paid for their first house. I laughed in her face. However, in 2006 I paid about $30k for our Honda Pilot with all the bells and whistles. If I wanted a new Pilot with that level of trim today, I would have to pay $45k. At that rate of inflation, the advisor would be correct! In another 25 or 30 years, I could expect to pay over $100k for a Honda Pilot.

So the used CR-V is my way of stickin' it to the man.
 
As others have point out, the "math" is highly dependent on what you are buying. I personally have never bought a new car and likely never will. I aim to buy 1-3 year old one owners with good maint. history. My wife and I both drive VW CC's, mine a '12 and hers a '13 and we goth both 2+ years old for just slightly above HALF of MSRP. But if you can get one of the "common" models new for within a grand or so of a 1-2 year old one, I'd do it to.
 
last two cars I bought were used - bought the first one in 2013, 2009 XT limited for 18K, which was half of msrp and the driving factor (no pun intended)

last one I bought this summer (1995) for about 25% of msrp, but it's a rare mulletmusclecar

thankfully the 2009 was under factory warranty with the engine spun a rod bearing in 2014 - you guys who are trying to save a few bucks buying a 2-4 year old used car need to be aware of the pitfalls of having to replace the bottom end (and turbo) on your own dime in case the prior owner didn't maintain the vehicle properly
 
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I have primarily bought new cars, with the only exception being the 10 year old 1985 350SL I bought when I turned 40. Hey, it was my midlife crisis, and a whole lot cheaper than the divorces I have seen;). DW was supportive, and we enjoyed it for 10 years.

Back to new cars, I have always bought new off the lot. Last years model, or this years low advertised special. No bells or whistles. Dealers usually have an advertised low priced "loss leader" to get you in. This is what I but. Last 3 have been Nissan Altima's, and I could not be happier with the value, performance and quality.

I still have not paid $20k for a new car!
 
Big_Hitter said:
thankfully the 2009 was under factory warranty with the engine spun a rod bearing in 2014 - you guys who are trying to save a few bucks buying a 2-4 year old used car need to be aware of the pitfalls of having to replace the bottom end (and turbo) on your own dime in case the prior owner didn't maintain the vehicle properly
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A few words on turbochargers and oil changes, since I am very familiar with them from several performance cars I have been associated with.

They (turbochargers) are a "new thing" to the average car buyer. Many of the newer 4 cylinder high MPG cars have them to enhance torque, as that's what makes the car "go" (not horsepower) and those cars are complete slugs without boost enhancement. Car salesmen typically know squat about them. Since they spin a turbine wheel off the exhaust manifold or electrically at upwards of 200,000 (yes) RPM, they REQUIRE only the best full synthetic oil to keep the turbine shaft lubricated so it doesn't disintegrate.

If you are not careful, and use the wrong oil for an oil change, say "Dino" oil (non-synthetic), soon afterwards, you will be buying a new turbocharger for $3,000 - $5,000. And there may be more expensive parts to buy if the turbo debris gets into and past the intercooler.

Now, think about the dealer oil change process and the typical "wash jockey" that changes your oil...is he astute enough to make sure your turbocharged car is fed the good stuff?.....or the normal "10W 30 Dino oil off the pull down hose" connected to the 500 gallon bulk tank? (The real mechanics are usually too busy doing higher profitability jobs to mess with oil changes.)

Oh, and the computer-generated receipt you get will have the correct synthetic oil part numbers shown as that is in the "system" even though incorrect bulk oil was put in. (I've seen this scenario in person).

This is just some food for thought as cars get more complex and typical owners don't follow the technology or understand it. Also, stay very clear of "quickie" oil change places if you value your high tech engine.

Speaking of high tech, stay tuned for the EPA assault on gasoline engine particulates as that is a couple of years away. Not only with you have a turbocharger, your car will have a exhaust particulate trap system and fancy monitoring, just like the diesel vehicles. Failure of a particulate filter system is not cheap and once you get past 80K miles, the federal missions warranty is off the car.
 
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+1 on the oil - DW uses full scoob synthetic on hers and I use eneos 5-30 on mine
 
Big_Hitter said:
you guys who are trying to save a few bucks buying a 2-4 year old used car need to be aware of the pitfalls of having to replace the bottom end (and turbo) on your own dime in case the prior owner didn't maintain the vehicle properly
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That's one reason the one-year old turbo Buick Regal I bought last year was purchased as a certified vehicle from a Buick dealership. It still had three years to go on the four year new-car warranty, and the certification added another year of full coverage.

aja8888 said:
If you are not careful, and use the wrong oil for an oil change, say "Dino" oil (non-synthetic), soon afterwards, you will be buying a new turbocharger for $3,000 - $5,000. And there may be more expensive parts to buy if the turbo debris gets into and past the intercooler.
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The car came with two years of free oil changes and your warning makes me believe I should pay the extra cost to continue taking it to the dealer when the freebies run out. Hard for them to deny warranty coverage for a blown turbo due to using the wrong oil if they did every oil change.
 
REWahoo said:
The car came with two years of free oil changes and your warning makes me believe I should pay the extra cost to continue taking it to the dealer when the freebies run out. Hard for them to deny warranty coverage for a blown turbo due to using the wrong oil if they did every oil change.
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Good idea, during the warranty coverage it makes sense to let them continue to do the oil changes.
 
Great thread. Here's the summary I've picked out so far:

Buy used
  • Highly optioned cars - Options tend to depreciate almost immediately
  • Brands with a reputation for low quality - Whether deserved or not, such as US domestic vehicles. These tend to command lower resale values.
  • Luxury cars - Image conscious consumers purchase new cars more often. Demand is lower for out-of-warranty luxury and performance vehicles due to perceived high maintenance costs.
  • If you're not picky - The more options you give yourself the more likely you are to find a great deal
  • Older vehicles - If you're comfortable with a 5-10 year old car, or higher mileage, there are great deals to be had. 100k miles isn't a lot for a reliable car.
  • If you do your own maintenance - A large part of the maintenance cost of owning an older car is paying someone else to turn the wrench.
  • If you don't drive a lot - As long as the car is in good shape it will probably stay in good shape since it spend most of its time sitting in your garage

Buy new
  • Base trim levels - These stripped down models are priced low to get you in the door. If you can resist the temptation of options you can get a brand new car for the price of a lightly used model with more options
  • Brands with a reputation for reliability - They command a high premium on the used market as they're perceived as having longer usable life left. The difference to new may be small. Japanese brands such as Honda, Toyota and Subaru fall into this category.
  • When comparing against 1-3 year old vehicles - Traditional "always buy used" wisdom has driven up the price of reliable lightly used cars. They may be "good as new", but they're priced like it.
  • Specific, uncommon, configurations - The lower selection on the used market will make deals less likely.
  • If you won't do you own maintenance - A new car will come with new tires, new brakes, new fluids and a known maintenance history.
  • If you plan to keep the vehicle a very long time - The initial depreciation is only a small part of the cost of the vehicle if you own it for 10-15 years.
  • If you commute - You'll make use of included maintenance and warranties.
 
aja8888 said:
A few words on turbochargers and oil changes, since I am very familiar with them from several performance cars I have been associated with. ...

If you are not careful, and use the wrong oil for an oil change, say "Dino" oil (non-synthetic), soon afterwards, you will be buying a new turbocharger for $3,000 - $5,000. ...
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I would always refer the to the owner's manual. From a quick search, not all turbo cars require synthetic (mine doesn't, not even recommended - and I've had 16 trouble free years from it). If your manual requires it, make sure you get it.

The tricky part is many manuals will 'recommend' synthetic, as it might have been used to squeak out 0.1 mpg in their EPA certification, which adds up for the manufacturer, and they aren't paying for a lifetime of oil changes. But it may not be required to prevent wear, and it might not be cost effective to the owner.

-ERD50
 
ERD50 said:
I would always refer the to the owner's manual. From a quick search, not all turbo cars require synthetic (mine doesn't, not even recommended - and I've had 16 trouble free years from it). If your manual requires it, make sure you get it.

The tricky part is many manuals will 'recommend' synthetic, as it might have been used to squeak out 0.1 mpg in their EPA certification, which adds up for the manufacturer, and they aren't paying for a lifetime of oil changes. But it may not be required to prevent wear, and it might not be cost effective to the owner.

-ERD50
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What car do you have that has a 16 year old turbocharger?
 
Note that GM dealers at least give big discounts on vehicles that sit around their lot to long (I got 14% off a malibu in this case). Just have to watch the adds and scan the dealers websites for details. It was a 2 lt which was discontinued for 2017. I suspect other car dealers may do the same, and it does cut the cost of a new car somewhat.
 
phil70 said:
Since I just went through this calculus for my family, I figured I will share. We live in St. Louis and I just bought a 2013 CR-V with 22k miles and mid-level trim for what I think to be 25% off of the new price. We've bought or replaced three cars in three years and this was the best spread between new and gently used that I have seen. At other times, the spread has not been much and we bought new.
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Was it a private sale with a very motivated seller? Hard for me to see a Honda selling for that much of a discount otherwise.
 
ERD50 said:
A 16 year old car. 2000 Volvo S40.

https://en.wikipedia.org/wiki/Volvo_S40#Engines


Mine's red.

-ERD50
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Cool car.

One of the first with a turbo in the U.S was Volvo. I saw a 1980's sedan in Ca when I lived there. Even the MB's were not until the late 70's or so. VW as late as mid 90's. Those older turbo's were not driven as hard and not as electronically controlled as the modern ones, therefore, they did well at lower spin RPM's and on petroleum based oils. They also were "wastegate" type turbos that relieved excessive boost conditions instead of today's variable vane type turbos that control boost (and turbo load) electronically in conjunction with vacuum and pressure relief valves.

However, those older engines were not too demanding on HP/torque as today's higher revving 4 cylinders or the dual turbo BMW V6's monsters. Many of today's 4 cylinder turbocharged cars require premium fuel because of the high compression ratio. My stepdaughter's 2007 Mazda CX-5 is one of those.

Once you leave the early 2000's, which maybe you haven't, things get very complicated from an automotive engineering standpoint.

I should have referenced my discussion on modern day engines and excluded the older ones like on the early Volvo's, MB's and a few others.

On today's cars, most manufacturers with high efficiency or high performance engines specify oils that meet their spec only. As an example, a late model VW turbocharged diesel will specify VAG Spec 507 only oil. earlier models may specify VAG 505.01. Hard to find some of these oils in the U.S., but they can be located or ordered. MB has their own spec oils also as do most other foreign brand autos.
 
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Timing is important. I know there are perceptions out there about buying at the end of the month, after Thanksgiving, when it is snowing, etc. etc. but I am not sure any one rule works all the time. Other than maybe when the new models are on the lot and they still have old models left.

What I do know is that after deciding on two different make/models we basically waited until the time was right and saved a lot of money. Not being picky about color/features has worked well in the past too.

I've always been able to be under Edmond TMV and TrueCar's pricing range, but it has also meant driving a few hundred miles away to get it too. Never have figured out why local dealerships won't deal much and I can save thousands a few hundred miles away, granted in larger cities.

Just don't do what we have done...new car last winter and already have 32k miles on it! Let's hope diesel motors are what they are cracked up to be and it won't even sneeze at going at least 300k. ;)
 
aja8888 said:
However, those older engines were not too demanding on HP/torque as today's higher revving 4 cylinders or the dual turbo BMW V6's monsters. Many of today's 4 cylinder turbocharged cars require premium fuel because of the high compression ratio. My stepdaughter's 2007 Mazda CX-5 is one of those.
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Wasn't aware BMW had a dual turbo V-6. What vehicle is that used in?

I am aware of the dual turbo with the inline 6, used, for example, in the 335is.
 
ziggy29 said:
Was it a private sale with a very motivated seller? Hard for me to see a Honda selling for that much of a discount otherwise.
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Ziggy - The dealer gave me a great shopping tip (for when I buy another car in 10 years!). The dealer was located in a less desirable suburb of St. Louis, so the salesman said they discounted the car to get people to make the trip. I was happy to take advantage of the "geographic arbitrage."

There's just not much risk in buying a normally aspirated four cylinder Honda with only 22k miles on it. The only potentially wonky part of the car is the AWD, but we're willing to take the risk on that.
 
When it comes to cars, I am a late adopber of newer technologies until I feel it is proven, particularly as I have been buying used. Not willing to take the reliability risk.

Have not considered any vehicles with turbochargers or CVTs to date. CVTs may be OK, though my perception is their reliable life is about 150K miles (would love to hear other's experiences) but since I tow 3000lb and smaller trailers regularly, most CVTs are not rated for that use.

A couple of years ago Subaru started offering CVTs, and their tow ratings dropped, may be telling us something!
 
We have found the sweet spot to be 7 to 10 years old. By then, even Hondas and Toyotas have changed to the "new" and "improved" (visibly different) model on everything they produce. So when we looked in '07 for a Honda CRV, the "zoomy" new model was about $25K IIRC. But the "boxy" one (the '99) was $7K with less than 100K on the odometer. We still drive it and don't care when DW scrapes the side of the garage and leaves paint on it. Most everything still works, but since it has few electronics (no GPS, no back-up cam, etc.) very few things can "break" on it. We put about 8K or less on it/year, so it could last us another 5 years or more if nothing drastic happens. Oh, and we dropped collision/comp because one fender bender and it's totaled anyway. It really can't depreciate anymore as long as it runs. It's all a crap shoot, but at least if you lose, it's a smaller anti to get in. YMMV
 
freedomatlast said:
Wasn't aware BMW had a dual turbo V-6. What vehicle is that used in?

I am aware of the dual turbo with the inline 6, used, for example, in the 335is.
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my boss has a new 3 series that I'm pretty sure has a twin turbo - sad thing is my forester is faster :eek:
 
aja8888 said:
You must not be average then! :dance:

Turbos have been around for a long time, in many places except for the average U.S. car buyer.
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I think those older turbos hold up due to the relatively low boost that they are pushing, maybe 5-7 psi? I run 19 in mine. Thinking about a bigger tmic and header so I can go 25psi or so on e85
 
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