Cash For Clunkers "Used Car Prices Skyrocket"

[Joes Place]

So now you are comparing a 4 year old (in the comparo) vehicle to new? And what mileage is on it? Looks like the average 2011 Pilots on Des Moines area Car Gurus ranges from 70,000 miles to 110,000 miles.

Of course buying a 4 YEAR OLD vehicle is cheaper than buying new.

I'm not the one massaging the numbers/stats here. I fully posted the Acadia example. Then I posted 4 other random vehicles. You want to try some more?

If you do your homework, you can EASILY find 2-3 year old vehicles with <20,000 miles on them, and pay quite a lot less than the vehicle's ACTUAL new 'off the lot' cost was.

My personal example: bought a 3 yr old Cooper Works MINI, red (most desired color). Got it for $6000 LESS than what dealers out here were charging for the SAME YEAR used vehicle (did my homework, shopped around). New Cooper Works models went for about $11-12,000 MORE than what I paid. The vehicle only had 15,000 miles on it. And, unknown to the seller, it actually had a 3 year extended service agreement on it (usually a $2,500-3000 add-on), so I got the same 3 years of free service I would have on a new car AND saved >$10,000 (more like $12,000). That car has still depreciated, but by less than about HALF of what it had by the time I bought it.

Buy new if that's what trips your trigger; just be aware of where your money is going. That's all I'm pointing out.

 

[theIowaHawk]

Oh, so this advice is coming from a Mini driver. Got it. Have fun on your amazing vacations, I hope they appreciate well...

 

[Joes Place]

Oh, so this advice is coming from a Mini driver. Got it. Have fun on your amazing vacations, I hope they appreciate well...

Here's some fun Edmund's reading for you; chose a Subaru Forester, as that was one of your examples.
Check out the depreciation rates in the first two years vs. years 3-4; it's >$5000 vs $3000. That's around $8000 of depreciation in the first 4 years, on a $30,000 car.

http://www.edmunds.com/subaru/forester/2015/st-200689824/cost-to-own/

It's a decent place to look to understand how much you are ACTUALLY paying. Sorry to hear you got screwed on your new car deal; recommend you talk to a financial planner who can walk you thru this stuff.

Oh, and the Cooper Works MINI is just fine, although it still cannot hold a candle to my Ducati ST3.....

 

[theIowaHawk]

So you are no longer pushing the idea that it depreciates when driven off the lot?

Its an improvement.

According to that link a Subaru Forrester should sell for $4600 less that first year right? Huh, weird, actual listings show otherwise.

 

[Joes Place]

So you are no longer pushing the idea that it depreciates when driven off the lot?

Its an improvement.

According to that link a Subaru Forrester should sell for $4600 less that first year right? Huh, weird, actual listings show otherwise.

Weird that I can look up a 1 yr old Subaru Forester for $26k on cargurus, and find 'new' ones that list for $30-31k.

AND that their 'fair market value' numbers show the same $4k drop after a year....

 

[Joes Place]

...and I can look at GMC Acadia (Denali AWD) models in the Iowa City/QC area on Cargurus.

New are going for $49-51k, depending on the options.
Used, with <30k miles are $33k to 43k, depending on the year.

So, apparently you're trying to claim they 'don't depreciate at all' in the first year, but then SOME magically depreciate $10,000 to $15,000 in the second year.

Use your noggin' here. The MSRP numbers are meaningless vs. what you end up paying to get the car off the lot. Edmunds and Cargurus can CLEARLY show you significant depreciation in the first year or two. And it DOES depend on the miles you put on the car, so picking ones with 60,000 miles are of COURSE going to drop in value a ton. Ones that were dealer-used cars will drop a fairly small amount because they may only have 5000 miles on them.

Again, if you LIKE new cars and that's what trips your trigger, spend your money on them. The money I saved on mine is equal to the cost of my Ducati ST3. Personally, I'd rather have the fun MINI AND the Ducati to tool around in/on. If you'd rather have just one 'new' vehicle, do what you want. Save the $6k per year on monthly payments and you'll have $30,000 in 5 years (excluding interest/investment return) to spend on something else.

 

[theIowaHawk]

First: I began by discussing the notion that cars depreciate by x% when driven off the lot, which I've basically showed is false in general.

Second: You were decrying that people shouldn't buy new on the basis that it is a depreciating asset............and then you invoke what YOU would prefer to do: vacation.

Go back and reread my post responding to yours: You are like clockwork with other posters, decrying what they spend their money on that it is a terrible, non-appreciating asset...while substituting your own idea of a good expense even when a non-appreciating (non) asset.

I randomly chose vehicles and all were within $2k of MSRP, and as you point out MSRP is pointless because the price is LESS (not more as you claim) than MSRP. So the actual "depreciation" is likely somewhere within that $2k, and you get a year older model that had a driver.

That doesn't mean you SHOULD buy new or that you MUST buy used, it is that you should do the research on any car you are about to purchase....and then spend your money on what you wish to without blithering blabber about how they are ripping you off! That is how they built such a nice showroom! Look it up sometime, their nut is NOT made off of new sales.

 

[theIowaHawk]

And your MINI nonsense isn't even comparable, no matter how proud you are of that eyesore. As you said it was the SAME YEAR with LESS MILES and you compared it to a dealer, what does that have to do with first-year depreciation and buying new? You basically said, "I made the sensible deal instead of the dumb one..." So what?

 

[theIowaHawk]

Weird that I can look up a 1 yr old Subaru Forester for $26k on cargurus, and find 'new' ones that list for $30-31k.

AND that their 'fair market value' numbers show the same $4k drop after a year....

Ok, here goes:

http://www.cargurus.com/

Subaru | Forester | near 50318
http://www.cargurus.com/Cars/invent...SelectingHelper.selectedEntity=d374&zip=50318

Year 2015
http://www.cargurus.com/Cars/invent...=true&modelChanged=false&filtersModified=true

I spent all of 1 minute doing that. First one: $28,000 http://www.cargurus.com/Cars/invent...=false&filtersModified=true#listing=126704377
2.5i Limited (whatever options that is)

$30,669 MSRP 2016 2.5i Limited: http://www.cargurus.com/Cars/invent...=false&filtersModified=true#listing=126579908
And says to call for a lower price.

If I had to guess that car would sell for ~$29, and the used for $27, with the internet and sites like cargurus their prices are likely to be very competitive prior to negotiation. So the "depreciation" is likely somewhere within $2,000.

As I said.

 

[lucas80]

Oh, so this advice is coming from a Mini driver. Got it. Have fun on your amazing vacations, I hope they appreciate well...

Just asking, but, didn't you criticize someone earlier in this thread for telling people what to do with their money? Want a Mini, buy a Mini.

 

[theIowaHawk]

Just asking, but, didn't you criticize someone earlier in this thread for telling people what to do with their money? Want a Mini, buy a Mini.

Fair enough, but I don't think I criticized him for buying a mini, I'm criticizing him for owning a mini, and then bragging about it.

 

[Joes Place]

Fair enough, but I don't think I criticized him for buying a mini, I'm criticizing him for owning a mini, and then bragging about it.

It's a Cooper Works, that does 0-60 in about 6 seconds, and can outmaneuver damn near anything else on the road except a motorcycle.

 

[Joes Place]

I'm sure you can find plenty of 'guesses' that depreciation does NOT occur in the first year you own a car, but the simple reality is that depreciation curves follow a consistent pattern, and you can look at just about ANY vehicle model, and find one 3-4 years old that is 15% to 25% (some more like 40%) reduced in value. MOST of that depreciation occurs in the FIRST year. That is FACT, not a GUESS.

Again, I didn't look at anecdotal examples (because options/features vary and likewise vary the new and used value of the vehicle); I looked at TYPICAL values on the CarGurus site. And TYPICAL values for the Subarus were $30k for new, 26-27k for used ~1 year old. That is 10-15% depreciation. Do the math. PLUS, you're going to shell out an extra $500-1000 to the dealer on 'other costs', NOT included in MSRP like 'delivery fees' etc. that they use to mask the actual cost of the vehicle. And that cost DOES NOT show up on their "MSRP Website" value.

I've stated it many times: do what you want with your money, but you waste more of it by purchasing new vehicles. Any financial planner will tell you that it's not a wise financial decision; buy an older vehicle and you eliminate most of the depreciation entirely. And a good quality/model will run 100,000-150,000 miles before you need major repairs. Brakes are cheap; timing belts are cheap; even head gaskets and re-planing heads on a vehicle is only the cost of a couple 'new car' monthly payments.

I'm sorry that you're so business-challenged here, but the numbers are pretty clear. CAN you find a good deal on a 'new' car? Sure. End of year, they clear out inventory pretty much at-cost, sometimes below. But you can still get a better deal on a 3 yr old vehicle coming off-lease. New cars make more sense for those who can deduct the depreciation on their company/self-employment taxes, because for them, the amount of depreciation mostly doesn't matter.

 

[theIowaHawk]

PLUS, you're going to shell out an extra $500-1000 to the dealer on 'other costs', NOT included in MSRP like 'delivery fees' etc. that they use to mask the actual cost of the vehicle. And that cost DOES NOT show up on their "MSRP Website" value.

This is false, seriously, stop with this nonsense.

Feel free to ask other posters on here, when they got a "price" from a dealer before going in, how often did it go up, especially over MSRP?

 

[theIowaHawk]

You really don't understand my posts, my original point, or why I called you out in the first place.

You don't need to call a financial planner, this is not about financial planning. You derided the buyer-on-finance for buying new while telling them to go on a vacation....and you backed it up by saying a vehicle is a depreciating asset.

 

[Joes Place]

You really don't understand my posts, my original point, or why I called you out in the first place.

You don't need to call a financial planner, this is not about financial planning. You derided the buyer-on-finance for buying new while telling them to go on a vacation....and you backed it up by saying a vehicle is a depreciating asset.

I recommended other options to the buyer besides lining the pockets of the dealership. A vacation was ONE of those options.

You're trying to claim 'new cars don't depreciate in their first year', which is BS. Many of the ads you pull up you don't even know if they are truly 'new'; many dealers use vehicles for their business, and sell them as 'new' with 5000 or more miles on them; they are still 'new' because they have never been officially sold.

It IS about financial planning, because that was my original point; you shouldn't be buying a new car unless you have your other finances (house, retirement savings, etc) under control. Too many kids (and Millennials) want the fancy car, end up spending $3-5k just on car depreciation in the first year, with sky-high car payments, when a significant fraction of that first year or two's 'new car' payments could have started up a sizeable retirement nest egg for them. Saving JUST $100/month in car payments is $1200 you can put toward an IRA; and that will EASILY be the difference between a new vs used car in many cases.

As soon as you are able to save enough money that you can buy cars for cash, and avoid making car payments altogether, you're in pretty good financial shape. Too many people end up in the 'car payment debt bucket', owing more on a car than it's worth, because they set up too long a payment plan and the vehicle depreciated faster than their payments. Car dealers LOVE to help people revolve that debt, playing the 4-box game.

If you don't care, then ignore my posts and advice and spend your money on what you want.

 

[Joes Place]

This is false, seriously, stop with this nonsense.

Feel free to ask other posters on here, when they got a "price" from a dealer before going in, how often did it go up, especially over MSRP?

You aren't paying attention. They KEEP the MSRP price on the invoice; they ADD in 'delivery charges', etc. When they play the 4-box game, most don't even show people the actual price they are paying, if they aren't savvy enough to figure it out...

 

[MichiganManLifer]

You aren't paying attention. They KEEP the MSRP price on the invoice; they ADD in 'delivery charges', etc. When they play the 4-box game, most don't even show people the actual price they are paying, if they aren't savvy enough to figure it out...

This isn't 1954, people are much smarter than you give them credit for. You are completely managing to the exception with your theories. You've also given vacation as an example as a better expenditure and I assume a better investment option? Maybe it's time to quit while you're behind?

 

[theIowaHawk]

Joe, I'm thinking I must give up, if MichiganMan is agreeing with me, I am likely in the wrong.

 

[L. Wade Childress]

why would I NOT finance a vehicle in this rate environment?

I'm either setting aside discretionary money as I save up for a vehicle, or I'm making payments to the bank. What's the difference?

 

[Joes Place]

This isn't 1954, people are much smarter than you give them credit for. You are completely managing to the exception with your theories. You've also given vacation as an example as a better expenditure and I assume a better investment option? Maybe it's time to quit while you're behind?

No. Simply giving people suggestions/other options to spend their money on (retirement investment is clearly a better expenditure; a vacation is if you prioritize seeing more of the world vs. buying new cars). And when I refer to 'a vacation', I'm not talking about a family car trip to Okiboji; the amount of money you can save ($5000 or more) is enough to take your wife or GF on an international trip somewhere. Most people do not realize how significant an expense a car is, particularly a new car.

The assertions that 'new cars do not depreciate in the first year' is utter stupidity; the first year and first 3 years are where they depreciate the most. Google all you want, but that's what you'll learn.

You can buy a new car every 3 years and eat that extra $3-5k in depreciation, or you can buy a 2-3 year old car and replace it with another 2-3 year old car every 3 years, and save yourself quite a lot of money. What you decide to do with that is up to you.

 

[Joes Place]

I'm truly just amazed at the gullibility of some folks here: "Look! These ads show Subarus selling BELOW MSRP!!!"

You don't think the dealers and manufacturers KNOW that? They give the dealers an 'artificial' MSRP so they can 'sell' you on the 'great deal' you are getting! "We're losing money on these, because we're selling BELOW manufacturer's pricing! They built us this free fancy showroom, too, because they felt sorry for us on all the money we were losing!"

 

[MichiganManLifer]

No. Simply giving people suggestions/other options to spend their money on (retirement investment is clearly a better expenditure; a vacation is if you prioritize seeing more of the world vs. buying new cars). And when I refer to 'a vacation', I'm not talking about a family car trip to Okiboji; the amount of money you can save ($5000 or more) is enough to take your wife or GF on an international trip somewhere. Most people do not realize how significant an expense a car is, particularly a new car.

The assertions that 'new cars do not depreciate in the first year' is utter stupidity; the first year and first 3 years are where they depreciate the most. Google all you want, but that's what you'll learn.

You can buy a new car every 3 years and eat that extra $3-5k in depreciation, or you can buy a 2-3 year old car and replace it with another 2-3 year old car every 3 years, and save yourself quite a lot of money. What you decide to do with that is up to you.

You changed the argument half way through and you ignored theIowaHawk attempting to tell you that.

 

[tstalker4]

I'm truly just amazed at the gullibility of some folks here: "Look! These ads show Subarus selling BELOW MSRP!!!"

You don't think the dealers and manufacturers KNOW that? They give the dealers an 'artificial' MSRP so they can 'sell' you on the 'great deal' you are getting! "We're losing money on these, because we're selling BELOW manufacturer's pricing! They built us this free fancy showroom, too, because they felt sorry for us on all the money we were losing!"

You have obviously have had bad experiences at dealerships but most of what you have ranted about in this thread regarding dealers is false and borders on paranoia. Artificial MSRP? Yes you can get discounts and rebates off new vehicles. Yes, some dealers will put add-ons on the price. You should try to negotiate those out. I suggest you find a better dealership to work with. They aren't all evil.

 

[ottumwan in tx]

cash for clunkers was Obama's way of trying to steer folks towards buying a GM car because he owns gm, after he bought it with taxpayers' money, so to speak. a lot more people bought fords. then the feds and Obama made the fake Toyota hoax, remember that? to boost gm. now they are doing a hoax to bring down VW to boost gm. Obama is a clown.

 

[Joes Place]

You have obviously have had bad experiences at dealerships but most of what you have ranted about in this thread regarding dealers is false and borders on paranoia. Artificial MSRP? Yes you can get discounts and rebates off new vehicles. Yes, some dealers will put add-ons on the price. You should try to negotiate those out. I suggest you find a better dealership to work with. They aren't all evil.

Never said they were 'evil'. All I've pointed out is how much money you spend based on MOST of your vehicle depreciation occurring in the first 3 years, and that buying good used vehicles (while not as 'sexy') WILL save you substantially over time.

0% financing on 'new' cars is a good deal, but it doesn't spare you the significant (25% or more) depreciation in the first 3 years of ownership. If you want to argue that depreciation curves DO NOT follow a traditional decaying exponential pattern, go right ahead (that is what it being argued here - that 1-year old cars HAVE NOT depreciated), but anyone with a business/finance degree knows that is factually not true.

 

[Joes Place]

You have obviously have had bad experiences at dealerships but most of what you have ranted about in this thread regarding dealers is false and borders on paranoia.

I've had bad and good experiences; what, specifically 'is false and borders on paranoia'?

Dealerships are businesses, intended to make profits. If you think they are there to 'cut you a deal below MSRP' you are dreaming.

 

[theIowaHawk]

I'm truly just amazed at the gullibility of some folks here: "Look! These ads show Subarus selling BELOW MSRP!!!"

You don't think the dealers and manufacturers KNOW that? They give the dealers an 'artificial' MSRP so they can 'sell' you on the 'great deal' you are getting! "We're losing money on these, because we're selling BELOW manufacturer's pricing! They built us this free fancy showroom, too, because they felt sorry for us on all the money we were losing!"

But that has nothing to do with this discussion....we were comparing prices. The prices listed were MSRP, and I flatly stated that the actual price would be lower. You are right, the MSRP is "inflated", which is why I said it would be lower. BUT I was using it as the listed price because it was the LISTED PRICE...and it was still within $2k of the used car.

You keep changing your argument and your criteria for the discussion.

 

[tstalker4]

I've had bad and good experiences; what, specifically 'is false and borders on paranoia'?

Dealerships are businesses, intended to make profits. If you think they are there to 'cut you a deal below MSRP' you are dreaming.

I was never disagreeing with your deprecation argument so I'm not sure why you responded with that. You are right, the first 3 years of a cars life is when it depreciates the most. However, if you use actual selling price after rebate instead of MSRP then the percentages are not as drastic.

Of course dealerships are businesses and strive for profit. My impression after reading all your posts in this thread is that you resent dealerships for trying to make a profit and they are all out to "get you" and build fancy buildings. If I'm wrong then I apologize but that is how you came off in this thread.

 

[theIowaHawk]

Never said they were 'evil'. All I've pointed out is how much money you spend based on MOST of your vehicle depreciation occurring in the first 3 years, and that buying good used vehicles (while not as 'sexy') WILL save you substantially over time.

0% financing on 'new' cars is a good deal, but it doesn't spare you the significant (25% or more) depreciation in the first 3 years of ownership. If you want to argue that depreciation curves DO NOT follow a traditional decaying exponential pattern, go right ahead (that is what it being argued here - that 1-year old cars HAVE NOT depreciated), but anyone with a business/finance degree knows that is factually not true.

You keep making assumptions for the sake of improving your argument.

Take your claim: Buy a 4 year old vehicle and save all the depreciation! Fine, go for it. Let's presume you "drive the wheels" off of it, so how long is that? 150,000 miles? 200,000? 10 years? 12 years? For sake of this lets go 200k and 12 years.

So now you've bought a 4 year old vehicle with, being generous here, 50,000 miles. 1/3 of the life of the vehicle is gone by years, maybe 1/4 by miles. Ignoring any necessary repairs/tires/etc that need to be done you have lost 1/3. So you will replace it in, say, 2023.

Or you've bought a new car with 0 miles and you get it until 2027 in the same scenario.

So new, using that Forrester you paid somewhere around $29,000 and got it for 12 years. You buy a 4 year old, let's say this one: http://www.cargurus.com/Cars/invent...lectedEntity=d374&zip=50318#listing=113691916 and you get it for $17,000.

Your depreciation doesn't mean a whole heckuva lot because you aren't reselling it until you've "driven the wheels off of it". Who knows what a 12 year old Forester will actually command in 2023, so lets ignore it. You've now paid ~$2416/year for the new one and $2,125/year for the used one. A savings, sure, of $300/year.

Are there other things that go in to this like tax/titling/insurance/etc? Of course and you should research and be cognizant of it, but we are talking about (as you repeatedly said) depreciating assets, things that don't belong in your "portfolio".

Yes, as you changed your argument YET AGAIN in your penultimate post, buying a new car every 3 years is a terrible financial strategy. Good for you moving those goalposts.

 

[theIowaHawk]

I was never disagreeing with your deprecation argument so I'm not sure why you responded with that. You are right, the first 3 years of a cars life is when it depreciates the most. However, if you use actual selling price after rebate instead of MSRP then the percentages are not as drastic.

Of course dealerships are businesses and strive for profit. My impression after reading all your posts in this thread is that you resent dealerships for trying to make a profit and they are all out to "get you" and build fancy buildings. If I'm wrong then I apologize but that is how you came off in this thread.

He must go to all of those not-for-profit used dealerships who are just itching to save everyone money.

If he did even a bit of light reading he would see that these massive dealers he is complaining about (say Karl Chevrolet in Ankeny), aren't making their nut off of new sales, but off of return visits and specifically the shop.

 

[theIowaHawk]

The assertions that 'new cars do not depreciate in the first year' is utter stupidity; the first year and first 3 years are where they depreciate the most. Google all you want, but that's what you'll learn.

.

There is not one line in any of my posts that supports your strawman here. If you believe there is, the quote function is your friend.

 

[Joes Place]

I was never disagreeing with your deprecation argument so I'm not sure why you responded with that. You are right, the first 3 years of a cars life is when it depreciates the most. However, if you use actual selling price after rebate instead of MSRP then the percentages are not as drastic.

Thanks. That's ALL I've been trying to point out here. And 'MSRP' is not what's used to compute actual depreciation, it's actual sales prices.....FWIW

 

[Joes Place]

But that has nothing to do with this discussion....we were comparing prices. The prices listed were MSRP, and I flatly stated that the actual price would be lower. You are right, the MSRP is "inflated", which is why I said it would be lower. BUT I was using it as the listed price because it was the LISTED PRICE...and it was still within $2k of the used car.

You keep changing your argument and your criteria for the discussion.

We're back to this Gish Gallop again?

SURE, you can find a new car example of year/model that appears a comparable used model has 'only' depreciated $2k. But unless you KNOW all of the features on each, you are making a biased comparison. That is why I went and looked at the RANGES for new vs. used. And I've already pointed out to you, that for the particular model, New were $29-31k, Used 1-2 years old with <30k miles, were something like 24-26k. That's $5,000 difference, TYPICALLY, not 2,000. And when you look at the ranges, it's fairly likely you are making apple-apple comparisons, because you are including models with ranges of features, NOT a single decked-out used model which was probably $2-3K HIGHER than the new ones listed.

 

[theIowaHawk]

Jesus H. Christ. I posted links to the very cars I discussed. Keep changing the criteria to try and fit your narrative, a changed narrative even from page 1. The fact that you didn't/couldn't show the vehicles I posted were "more loaded" with options to make the comparison closer shows that it wasn't.

Keep up your claim that buyers will pay OVER MSRP when they go in to a new dealer. Nobody agrees with you.

 

[Joes Place]

You keep making assumptions for the sake of improving your argument.

My assumptions are actually pretty accurate

Take your claim: Buy a 4 year old vehicle and save all the depreciation! Fine, go for it. Let's presume you "drive the wheels" off of it, so how long is that? 150,000 miles? 200,000? 10 years? 12 years? For sake of this lets go 200k and 12 years.
So now you've bought a 4 year old vehicle with, being generous here, 50,000 miles. 1/3 of the life of the vehicle is gone by years, maybe 1/4 by miles. Ignoring any necessary repairs/tires/etc that need to be done you have lost 1/3. So you will replace it in, say, 2023.

And you're accusing ME of a 'straw-man' argument?

I've already explained in this thread: things like tires, repairs, etc are SMALL compared with new car payments. You buy something used and have it paid off, you are making $0 in payments, compared with $5000-7000 a year on a new car.

What do tires cost? $500 for a set? A freaking new transmission - MAJOR repair - will only cost you HALF that annual new car payment ($2500-3000).

Or you've bought a new car with 0 miles and you get it until 2027 in the same scenario.
So new, using that Forrester you paid somewhere around $29,000 and got it for 12 years. You buy a 4 year old, let's say this one: http://www.cargurus.com/Cars/invent...lectedEntity=d374&zip=50318#listing=113691916 and you get it for $17,000.
Your depreciation doesn't mean a whole heckuva lot because you aren't reselling it until you've "driven the wheels off of it". Who knows what a 12 year old Forester will actually command in 2023, so lets ignore it. You've now paid ~$2416/year for the new one and $2,125/year for the used one. A savings, sure, of $300/year.

I DID buy a used (5 yr old) BMW convertible years ago; $40,000 car 'new' I purchased for $25k. It had 40,000 miles on it at the time.

I drove it 14 years, put another 100,000+ miles on it. I spent ~$500/yr on average in repairs; some years only a tune-up for $200-300, other years $1000. The car still looked fantastic when I finally sold it and got $4500 for it. So, the original owner incurred $15k of depreciation in 5 years; I incurred ~$20k of depreciation in 14 years. On average, that's 1/3 of the depreciation value per year.

I added up what it would have cost me to 'lease' a new, comparable BMW every 3 years vs. keeping and maintaining the one I had (repairs, tires, etc). Over the 14 year period, it was a cost difference of like $85,000 vs. $45,000 (including the purchase cost/depreciation of the car in the calculation, repairs, tires - even put a new convertible top on it and fixed up interior leather in it that was getting sun-worn). Note, that leasing that level of car might actually be cheaper than buying, because you'd incur ~$10k of depreciation if you bought/sold one 4 times during the same 14 year timeframe, or at least $30-40,000 of depreciation.

Over 14 years, that's $40,000 (or more) saved by simply buying/maintaining and keeping the car I had. That's FAR more than '$300 per year', it's more like $3000 per year. The caveat for me is that this was NOT my only car, so if it needed repairs, I was not renting something or stranded somewhere. It was one helluva reliable BMW - the E36 platform, which every mechanic I took it to called them 'bulletproof'.

So, if you make an HONEST assessment of the actual costs, you'll save TONS more money buying and driving something 5+ years. I wouldn't recommend keeping a car 10 years and >150,000 miles, unless you've got other transportation options because when things get THAT old, they will break down and do require major repairs. When you get to the point your vehicle isn't very reliable anymore and starting to cost >$1000-1500 per year in repairs, it makes sense to replace it. But most decent cars nowadays can run 100,000 miles easily w/o major fixes, IF you spend the money to properly maintain them.

I got rid of the convertible mostly because I wanted something smaller so I could fit both it and a motorcycle in the same garage bay....thus, the Mini. I do miss the open top to drive around in the mountains, though. Plus, the rear-wheel drive convertible had to 'hibernate' for parts of the winter.

 

[theIowaHawk]

I added up what it would have cost me to 'lease' a new, comparable BMW every 3 years vs. keeping and maintaining the one I had (repairs, tires, etc).

THIS IS THE STRAWMAN, how do you not realize this?

 

[Joes Place]

Jesus H. Christ. I posted links to the very cars I discussed. Keep changing the criteria to try and fit your narrative, a changed narrative even from page 1. The fact that you didn't/couldn't show the vehicles I posted were "more loaded" with options to make the comparison closer shows that it wasn't.

Keep up your claim that buyers will pay OVER MSRP when they go in to a new dealer. Nobody agrees with you.

What? I posted ranges of prices. I'm not going to waste my time trying to 'match up' a new vs. used feature for feature.

If you don't realize that dealers add 'delivery charges' and other stuff AFTER the list price, I don't know what to tell you - that's on EVERY invoice I've seen at car dealers - some are reasonable costs; others are gouging you, and the price you're paying out the door is rarely much under MSRP. The whole MSRP thing is simply marketing schpiel. Look at the 'fair market value' numbers on CarGurus, and you can see for yourself. They list actual prices people are paying; you can find plenty of overpriced used cars, just like new cars (many of those are people who paid above MSRP based on extras or dealer costs, and they're trying to sell their vehicle to minimize their depreciation losses). Newflash - whatever you pay for the car, it's going to depreciate in the first 10,000 miles; MORE than the next 10,000 and so on. I don't know why that's such a complex issue for you to understand here...

 

[Joes Place]

THIS IS THE STRAWMAN, how do you not realize this?

No. It is not. I posted what you'd have lost in depreciation buying new 4x over the same time period, and it's likely as much.

Go take a basic finance course, because you clearly cannot understand depreciation or depreciating assets.

 

[tstalker4]

I've already explained in this thread: things like tires, repairs, etc are SMALL compared with new car payments. You buy something used and have it paid off, you are making $0 in payments, compared with $5000-7000 a year on a new car.

Your error in this statement is that you are assuming the used car is not also financed. I've got news for you, if someone needs to finance a $35000 new car, they also need to finance the $25000 used one.

You think you have the magic formula for buying cars but it is just the strategy that works for you. Congrats on getting a good deal on a used Mini and also having a Ducati. For some, owning a brand new Silverado would be far more enjoyable and practical then a sub compact and a bike. It doesn't mean they are wrong.