Buy new or used vehicle?

Submitted by jaydee288 t3_11azegu in personalfinance

In your opinion, what makes the most sense long term. For sake of simplicity, let's just use a Toyota 4Runner as an example. They tend to be pretty reliable and hold their value (and is what I'm wanting lol)

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  1. Buy brand new/slightly used paid in full w/cash and drive into the ground.
  2. Buy brand new/slightly used paid in full w/cash and trade up every few years.
  3. Buy used and drive into the ground.
  4. Buy used and trade up (to a newer used car) every few years.

My gut tells me buying used is the way to go, however, looking at prices these days they don't seem too far off from just buying a fresh new one where at least you know it's history. I think the whole idea of "cars lose value when they drive off the lot" is kind of antiquated. Seems like used cars are less of a "deal" these days. I know some of that has to do with the state of the economy and inflation.

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Comments

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samuel_clemens89 t1_j9uz6w0 wrote

If you’re looking to get another car in a few years (I don’t get why ppl do this) then a new car isn’t for you. If you plan to keep your car for ten plus years buying new is a great investment

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Laura9624 t1_j9v6r2j wrote

I agree with. People usually do the opposite. A new car us great for me because I treat them gently, maintain them well. And certain vehicles don't lose value much.

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bobniborg1 t1_j9vsw0z wrote

Yep, buy a Toyota/Honda and drive it for 200,000+ miles and then trade it in for another.

Also, when you stop making payments on it, pay that money into an account so your next car isn't financed.

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Drtsauce t1_j9v14lg wrote

If you’re thinking about trading up every few years why not just lease?

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Werewolfdad t1_j9uzbwj wrote

In the current market, there's little difference between new and used if you'll drive it into the ground (assuming you're looking at new or gently used). You need to go 5-8 years use to get a decent 'deal' these days.

That assumes you can afford the upfront outlay needed for a new car

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chickenlittle53 t1_j9vtjng wrote

Are you buying to keep a car long term nor no? For me, a car is legit just transportation. I can careless about the fancy shit and if saving money was the goal, then I wouldn't be buying a car known to be way more expensive than neccesary like a 4runner. Soon many cheaper cars out there that can get you wherever for cheaper just as nicely.

That's not a judgment on you personally, but just pointing out that ify our goal is to save money then you have to also consider what kind of car you're buying to begin with. There is no blanket answer per se. Trading in though is a guranteed money loser 99% of the time though when you're talking every few years especially.

I guess what I'm trying to day is, you're talking about being concerned about money while buying a more expensive car than is likely needed, considering constantly trading one in, and not keeping it until you actually need another car. All things that are the opposite of being concerned about maximizing money. Decide whether you're buying to save or buying to just buy again every few years. If the latter lease I guess(?). If the former think about cheaper cars that get the job done just fine and keep until the wheels fall off.

Had mine for the last 7 years and don't plan on selling any time soon. Was cheap and gets the job done.

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CEasey t1_j9v16g1 wrote

Make sure to compare the cost of auto insurance too.

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sunny-day1234 t1_j9v1tee wrote

It's been decades since we've purchased 'brand new'. We've been buying 2-3yo, off lease, low mileage vehicles. They tend to be nice, loaded with all the bells and whistles and well taken care of because they were 'leased'. We haven't looked lately in these crazy last few years though.

If you can pay cash that's/was the best way to go. If someone has to finance at least in the past, sometimes you can get a really good deal on a new with zero financing vs a higher rate for a used car, that's what my SIL did still before pandemic. Somehow I think those days may be gone now?

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SignedTheMonolith t1_j9vhtyd wrote

This Is just what I’ve seen some of my friends & their family do, and this was prior to covid when cars had been in abundance. They also wrote their trucks off because they use it for work, but maybe you can extrapolate a little from it. They also had cash to make initial purchase.

They would buy the newest diesel by gmc drive it from 0 miles - ~15-20k miles. Trade it in and repeat. It would result in the car being used for about 2 years. By doing this they maintained >2/3rds equity in the vehicle, and would get great APR rates through the dealer.

By using the car for work, they never anticipated paying it off or living car payment free. So they looked to just optimize their monthly car payments.

Last add I saw from gmc (on Reddit) was 3.2% apr, but it required you to sell your current car which was already bought from a gmc dealership. So theirs weird deals out there, just read the fine print.

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WinterPush t1_j9w30w6 wrote

4Runner and Tacoma have the least depreciation. You get one that's 2 years old and has 25k on it for like 3k less than a new one. I was always a lightly used buyer but it does not make sense for Toyota trucks.

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