Buying a car? New or Used?

For most of us cars are tools and not really an investment (unless there is enough $$$ and time involved to pick low volume or a classic).

Most of my car friends will already know this and most of it is basic info =)




Why/When do I buy new? 

• I've personally bought both new and used 
• Here is how I make the differentiation:
• If you need low miles and warranty (in my case driving 4+ hours a day for work 3 or more days a week) 
• Chances are buying a used low mile car (unless you find a really good deal - then we should see WHY?) may only save a small amount in the grand scheme of things
• Often if you can pick up a new one with rebates and discounts you may end up the same 
• If you're buying a specialty, sprts, or halo model (if the rebates and deals are there), try new

Example:

•  You can buy a brand new FR-S with some options for about $25,500 
•  The dealer was selling my traded in FR-S with 5000 miles on it already for $26K 
•  This is a really good example because with key models new is ALWAYS better than used, sports cars are always in that category as depending on the age group chances are it wasn't broken in properly and abused (and in my case Toyota decided to resell it used with out fixing the issues I reported for 4 months, documented by Scion and yet no one could resolve it, even AFTER I offered to SCION corp to spend a day with a regional engineer and help them replicate and inspect the issue)

When/Why do I buy used?

• There are cars that just don't make any sense buying new (your life events or the initial asking price) 
• For FIRST time drivers ( all those teenagers !!! ), chances are they will bang it up very quickly at a minimum 
• Taxes, Insurance, Operating Costs, Market Availability mark ups on certain low production models 
• In a way, USED can be better than new for certain models and brands because you can cherry pick the best most reliable years of production 
• If going used the golden mile markers are 20-30K: you won't pay for the initial potential big depreciation hit
• You still have another 6000 miles left on the factory bumper to bumper warranty 3yr/36K miles)
• Next mile marker is 40-50K: You still have 10K or more left on certain warranties (5yr/60K miles) 
• Then the absolute last mile marker for me is 80-90K to leverage the last 10-20K miles of drive train warranty (8 to 10yr/100K miles) 
• NEVER buy a high mile used car with a negotiated extended warranty UNLESS you get such a good deal you can set aside money for large high mile maintenance or a surprise repair 
• I have bought several used for work and for project sports cars =) 

Did you know?

• The first model year is always the MOST expensive to insure 
• This is because the parts and knowledge base to repair them is still limited (I have bought the same model a few times and this is the ONLY way I learned this from my StateFarm agent after asking) 
• It takes a full one year or longer of production to find key design issues (too many personal examples to list here =)
• Car dealers make more profit from used car sales than new cars (most of the time) 
• This is because they can pay a much lower price for trade in (blackbook values - not what we're used to with KBB style values) and source cars from auctions or rental fleets 
• When the economy tends to do bad, chances are you're in the BEST position to buy new with major brand based incentives and since everyone goes after used markets the supplies dwindle and the deals on used cars aren't as good 
• On your Carfax report, map the owner address (with smart phones it's super easy =) 
• One personal example helping a friend buy a car, the owner address was enterprise rental in Newark NJ (rental fleet in northern salt exposed winter roads ... walk away)
• Another friend just last week found a deal on a 20K mile Honda Accord after chatting with him while sitting at the dealer over the phone and pushing the dealer for where it came from: a local auction ... walk away 

Example:

• My first nice cars was a limited edition 1996 Nissan 300ZX ($45k new in 1996) 
• I paid $11,900 for it in 2002 at Carmax with 80K miles 
• I knew 1996 was one the best years (last year of production with every upgrade to that generation in every aspect) 
• It cleared all Carfax and my personal extended inspections (it was a TX car so environmentally it was never really exposed to harsh nature events - all these things matter)
• But to go back to points I made earlier, it wasn't cared for to the level I would have and inspecting it with the first 7 days I uncovered a synchro issue in the transmission which meant Carmax ordering a new tranny from Nissan and having it installed