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. 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. We recently had friends who bought a jeep grand cherokee (Weight of 4,800 lbs, V6, mpg 19/26) trade in a 1.5 year old jetta GLI (weight 3,200 lbs, mpg 24/33) because they claimed it got better gas mileage....not sure how the math works on that
And Unless you are buying a high end german sedan, repairs are just not that expensive. I currently own a german hot hatch which costs my about $300 in annual maintenance, of which $120 is oil changes which I do myself
What I would look for if I wanted to minimize my driving expenses:
1) Highly reliable model from Toyota, Lexus, Honda, small by usable form factor, hatch, small sedan
2) Service History
3) Low operating cost model......high mpg. Honda civic, accord, fit, insight. Toyota Prius, Corolla. VW TDI, Golf (Just talk to an owner about how much they love this car), Ford fiesta
4) Less than 100,000 miles, but doesn't have to be much
5) Around $10K......you can probably resell it after 50K for $5K, or 100K for $3K
6) In demand model....will hold resale better
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
End of rant
