Car Buying/Collecting Strategy

[Danoff]

The inspiration for this thread was created by comments from people in the Tesla Model 3 thread saying that they're ready to put down deposits before the car has been finalized, let alone reviewed in its final form, let alone sold, let alone reviewed for reliability, let alone evaluated for resale potential.

A little perspective on me. I have 3 cars. 8 years old, 12 years old, and 23 years old. The 12 year old and 23 year old cars both have oil leaks due to rubber gaskets having become brittle and cracked. In both cases, I have oil smoke coming up from the hood. So I do understand when people say they want new cars because they will work reliably. What's more, I understand that car maintenance has a cost. The bill for one of those is $750 (I'll do it myself for $250) and the other may be $1000.

When you buy anything, the goal is to get value for money. One of the worst values for money you can buy is a brand new car. So why do I see so many people buying brand new cars?

Let's take a Chevrolet Malibu, that seems like a fairly standard vehicle. The base mailbu is worth $23k new. It looks like you can buy one that's a few years old maybe a 2012, with low mileage for $12k. That's roughly half!

My BMW 330i cost $42k brand new. I bought it with 30,000 miles on it for $18k. When I bought it it needed about $2k worth of maintenance work, so the total cost to me was $20k. My car cannot depreciate as much after I bought it as it did before i bought it even if it were worth nothing when I sell it. I've already put more than 30,000 miles on it, and it's worth at least $10k now. So it cost me $10k to put 30,000 miles on it, and it cost the previous owner $20k to put the same number of miles on it.

Sure it's harder to buy a used car, you have to shop more, but you're saving thousands upon thousands of dollars! People spend hours trying to save 10 cents on gasoline! What's more, dealerships provide a service called a pre-purchase inspection, during which they'll tell you everything wrong with the car. So for usually about $150, you can get a full workup and go into the purchase with eyes open. Even if you get hit with $1000 repair bill annually, it's still way beyond worth it to buy the used car.

But it goes further...

Since your goal in life's purchases should be to buy value, you should be looking for cars that will hold their value. The BMW I mentioned above is not going to go far below $10k ever. As long as it's well maintained, it'll be worth that. That's just what good cars that are well maintained are worth, and it's a car that can be maintained. Some of them will just fall apart around themselves. If one were to consider between buying my car with the oil smoke and the $750 repair bill and buying a 2012 lower mileage chevrolet malibu for $2k more (let's call it even because of the repairs), that person should buy the 330i. Why? Because the mailbu will actually go to zero and the 330i will not.

But don't buy my 330i, buy the ///M3. Those are actually starting to rise in value. Sure it costs and extra $10k up front, but the value curve is going the other direction. Instead of losing $2k over the next 50,000 miles with my car, or $10k over the next 50,000 miles with a malibu, you can actually lose $0k or even gain some and probably put 50,000 miles on an ///M3 (of the same year) instead.

Or better yet, buy a Porsche 911. Those hold their value like nothing else.

And here's another reason to not buy new, it's higher risk. You don't buy junk bonds with your investment money because the risk is too large. Well, how's the risk in a Tesla 3? Do we know if it's good? No. Do we know how much maintenance it will require? No. Do we know whether it will hold its value? No. So why are you gambling $35k again? With the used ///M3 or the 911, we know what that's worth. We know it has stood the test of time. The risk in that investment is highly diminished and the upside is much larger. With the Tesla, you're almost guaranteed to lose $10k in a short time, with the possibility for more loss. With a used ///M3 it looks closer to the opposite, almost guaranteed NOT to lose money in a short time, with the possibility for gain.

I know many car buyers care more about whether there's an mp3 player or bluetooth stereo than whether or not they'll lose thousands upon thousands of dollars on the car, but don't be that person! Don't hobble yourself with a boring car that's costing you more than something exciting, and please, carry the notion of buying value into other facets of ownership. Don't buy aftermarket rims that will go to $0 when you can buy OEM rims (even from another car - make sure it fits though) that will be worth what you paid for them. Sure the OEMs cost $2k and the aftermarkets cost $500 upfront, but ultimately the OEMs cost $0 and the aftermarkets cost $400.

And take the lesson to other facets of life as well. When you make improvements to your house, make sure you're not making them just for you or be prepared to eat the cost. "I want to finish the basement with the rooms like this" is often a good recipe for flushing $20k down the drain. And go ahead and buy it now while you can enjoy it rather than spending the same amount right before you sell the house.

Ok, so tell me why you're considering that cheap boring car that will cost you more than something good. Or tell me why it's worth $10k to be able to pick the color of the seats and not have to shop.

@[Nor]MclarenF1

 

[II AntR II]

I can understand your point of view but honestly it is just as flawed as "buying something new".
First and main problem, if everyone were to do what you do, the car (or any other) industry would enter in deep bankruptcy along with other companies that provide the parts/materials in order to build these products. There would be no need for new products as everyone would sell and consume between each other.
Along with this issue, there would no technological evolution as companies would get no return.
Also, people like new stuff. The NEW part of a product can be seen as "value for money" for someone but not you. Just as I said, consumers have different perspectives and needs when spending their money.
People like to take risks. That is why we have loans, bonds, stocks, etc, etc. You might see no value in investing in stocks (even the cheap/high risk ones) but other will. Who knows? The next day, the value of those could sky-rocket!

Its all subjective.

 

[Danoff]

I can understand your point of view but honestly it is just as flawed as "buying something new".
First and main problem, if everyone were to do what you do, the car (or any other) industry would enter in deep bankruptcy along with other companies that provide the parts/materials in order to build these products. There would be no need for new products as everyone would sell and consume between each other.
Along with this issue, there would no technological evolution as companies would get no return.

Uh huh... won't happen because prices adjust to reflect supply and demand.

Also, people like new stuff. The NEW part of a product can be seen as "value for money" for someone but not you. Just as I said, consumers have different perspectives and needs when spending their money.

I know. Folks like to not have to shop and to pick the colors of the seats and whether the car has the latest doohickey. But we're not talking about blowing an extra $100, or even an extra $1000. We're talking about 10s of thousands of dollars for this luxury. I know people who are literally millionaires who do not feel they can flush that kind of cash down the drain on that sort of frivolity. It's just not the kind of thing to take lightly, especially not middle class families.

People like to take risks. That is why we have loans, bonds, stocks, etc, etc. You might see no value in investing in stocks (even the cheap/high risk ones) but other will. Who knows? The next day, the value of those could sky-rocket!

Its all subjective.

Risking money is not inherently valuable. There has to be an upside. There is no upside to buying a new car, it's not going to skyrocket unless you get extremely lucky and/or wait a very long time. And if it does, the smart move would have been to make MORE money by buying later.

 

[Murcie_LP640]

One of the worst values for money you can buy is a car in general. There is an old saying to go with that but I don't feel that it's appropriate under the AUP.

If you want to save all of the money you can then your best bet is to choose a new car that you can afford and find one a couple of years old with low mileage. In many cases you even still retain a manufacturer's warranty, and it has all of the upsides of buying new with someone else paying the depreciation for you.

However, buying a brand new vehicle is very obviously a heart-over-head decision, and that's perfectly fine. Most new car buyers are not even going to care what used cars they can get for the same money, because most new car buyers are not car enthusiasts. If they want to be financially smart, they can follow the tip above and save themselves thousands with no compromises.

 

[CarreraGT]

I'll be honest, that first post is too long to read...

Nonetheless, my general opinion is that buying brand new cars is a waste of money (obviously excluding limited run models etc.), especially when you can pick up a demo or 1-2 year old car with dealer warranty for a significant discount over a new vehicle.

The key to making old car ownership cost effective is being prepared to work on it yourself, end of story. If you send your car to a dealer every time you hear a funny noise, you will blow cash like there's no tomorrow. Get yourself a good repair manual and find out where to buy parts online

 

[LM7325]

New car smell is a powerful motivator. Even if it is bad for you.

I agree with all that was said above, but the heart wants... I gave in to it just once.

On the other hand, I will never buy new again. At the time I wanted something nobody had their hands on yet, besides the assembly line workers anyway. I didn't even let it go through dealer prep. I wish I could have driven it straight off the assembly line.

Luckily I outgrew that nonsense, plus I am quite good at working on my own car. Not a skill you can use when your vehicle is so damn reliable.

Yeah, never again.

 

[niky]

If you're a keen backyard mechanic, or just plain lucky, you can simply live off of running twenty year old cars.

In my case, the pickings on the ground, thanks to the constant typhoons, floods and whatnot around these parts, are a bit slim...

But I've just put money (about $2k) down on a twelve year Protege, simply because it was the newest and most economical one I could find for that price. A few dings and dents, and some rust in the trunk from a water leak, but so far, so good.

The problem with buying used in my market is the parts supply is thin on the ground. I bought what I bought because I know the local and Australian suppliers, and I know how to order what I need, but it's not quite as convenient as buying a new Toyota and having parts available everywhere.

We were going to go bargain basement brand new, as in, Mitsubishi Mirage new (around $10k), but figured it might be best to maybe wait for the car we want to hit three or four years of age and then simply buy it for half the price at that point.

 

[Pagey279]

I must admit I have been thinking about buying new for a while now, the main reason being peace of mind. Don't get me wrong I know new cars can go wrong but the chance is very slim considering the quality of cars being built now.
Plus with some of the finance packages some manufacturers are offering now make it very tempting indeed. 0% interest, deposit contributions, free service packages, warranty. Combined with very low tax, insurance, high mpg, reliability etc.

I could buy a brand new Ford Fiesta ST for a smidge under 20k, for the same price you could get a 10 year old RS4, a 911 hell even a Bentley Arnage.
But what is going to be more reliable? Cheaper to run day to day? Cheaper to fix if it does go wrong? Etc etc

Also remember when a car goes wrong it's not just the price to get it fixed but also the inconvenience of not having a car, which for some it's vital that theirs stays on the road.

So you could get a 2 year old car with low mileage for much less, but I think for some who have the luxury of that much cash to spend they like to personalize their car straight off the assembly line.

The main thing that puts me off is depreciation, as soon as you drive it off that forecourt that's thousands down the drain. So ultimately I will probably go used, but can definitely see the appeal of buying new.

 

[TheCracker]

A majority of people i know who buy new cars, don't actually buy new cars, they lease them. They put down the deposit, choose the spec then make the monthly payments for three years. At the end of that term, the 'resale value' covers the cost of their next cars deposit and the process starts again. Some of these people actually have the cars leased for them by the company they work for or own as company cars, but it's the same thing. I'm struggling to think of anyone i know, young or old, who has ever actually bought a brand-new car.*

My mum's partner changes his cars every couple of years or so when he just fancies something different. He usually buys something that's 6-12 months old with very low mileage. It will still look, feel and even smell like a new car, it will still have a majority of the factory/dealer warranty, but he misses out on the first big hit of deprecation.

*Edit - my Mother-in-law, before she retired, used to buy brand new Hyundais. She had at least three of them in a row. She's obviously a non-enthusiast and bought only the smallest models as she only needed it to commute and go shopping in. Even then, she was only swayed by Hyundai's generous 5-year warranties and servicing packages.

 

[Joey D]

For me, it made no sense to buy a used Tacoma. They hold their value so well that I would have paid only about $5,000 less to have a truck with approximately 60,000 mile and a few years worth of use. I figured it wasn't worth it and just ended up with a new vehicle. In the past I've bought new vehicles for a number of reason, the Blazer and Focus both carried employee pricing which made them more affordable and the MINI has the similar problem with the Tacoma since at the time their resale value was super high.

 

[LM7325]

Those were the reasons I bought my Silverado new. The trucks I was looking at were 3-4 years old and 50-100k miles. I get a family discount buying GM, so it was really a no brainer to get a new one instead.

Right now I have no desire to trade. I just bought a '93 Mustang outright as a project car. I think I will keep my truck for now since it suits my needs well. What can go wrong with it is easy and inexpensive to fix, even the engine is cheap as chips, I have a 5.3l right now sitting on a stand as proof. That one may be going in the Mustang...

 

[Northstar]

This thread has got me thinking as I'm planning on buying a pickup sometime next year. First I looked at what was available for used Silverado's fitting what I want (not many) followed by configuring a new version.

This is how they compare:

Under this example I'm presuming either way the truck will die at 200,000 miles. Pricing by year is solely based on the listed price and doesn't take things like insurance, loan interest and negotiating into consideration.

2014 Chevrolet Silverado 1500 LT (Regular Cab, Short Box, 4X4, V8) (Certified Pre-Owned)
$27,777
25,509 miles

Factoring in the existing mileage it would last me about 13.5 years and would cost $1,920/year.

2015 Chevrolet Silverado 1500 LS (Regular Cab, Short Box, 4X4, V8)
$31,000
0 miles

A new Silverado would last 15 years and would cost $2,066/year.

There are obviously quite a few things that could alter that and would probably vary depending on the vehicle, but at least as far as the Silverado is concerned you might as well spring for the new option and get the better warranty.

 

[Crash]

When you buy anything, the goal is to get value for money. One of the worst values for money you can buy is a brand new car. So why do I see so many people buying brand new cars?

I don't really agree with your stated goal. I think the goal isn't necessarily to get value, but is to get utility. In that context, then purchasing new cars can make sense. People derive utility from more than just monetary gain or on the flip side, minimizing monetary loss. Others have posted some reasons that people may want to buy a new car (peace of mind from warranty, potentially lower maintenance cost, being able to take take advantage of improved technologies or new features, being able to choose the color or options that you want); all those reasons have an associated utility. There are plenty of other factors that people consider when buying new vs used that have utilities associated with each of them; knowing that someone else hasn't [/s]puked in[/s] messed with the car, knowing the full, true history of the car, being able to have the latest thing, etc. And everyone's utility scale is different; some people will care more about those reasons in favor of new cars, and hence go buy a new car, and some people won't care about those reasons, hence go buy a used car.

Utility or value, in the end, someone's going to have to buy new cars. If in the long term, no new cars exist anymore since all anyone bought were used cars, then eventually the supply of used cars will diminish or even get depleted as the cars get damaged in crashes, or old cars get junked or parked due to cost of maintenance increasing dramatically as all the parts start to fail and need replacement, or as cars otherwise become unfit for the road.

I get why people want to buy new cars. I thank people who buy new cars because their purchases allow me to then purchase my cars used at a relative bargain.

The key to making old car ownership cost effective is being prepared to work on it yourself, end of story. If you send your car to a dealer every time you hear a funny noise, you will blow cash like there's no tomorrow. Get yourself a good repair manual and find out where to buy parts online

Which is why most people don't own old cars, and why people buy new cars with warranties.

Not everyone wants to or enjoy working on cars, or have the proper tools, or have the time, or have the mechanical aptitude to work on cars. I'll wager that in fact, most people would find it tedious at best. To simply say that people should work on their own cars to save money works well for car enthusiasts or people who gain utility in working on their cars, but for the general population that aren't car people, that's just not worth it. It's a bit like saying that the key to owning an old refrigerator or stove is being prepared to work on them yourself instead of hiring a repairman. It may work for someone who has the time and capability and is frugal or is an appliance enthusiast, but reality is most people just aren't going to work on it themselves, whether because they don't want to or they can't.

 

[CarreraGT]

I don't really agree with your stated goal. I think the goal isn't necessarily to get value, but is to get utility. In that context, then purchasing new cars can make sense. People derive utility from more than just monetary gain or on the flip side, minimizing monetary loss. Others have posted some reasons that people may want to buy a new car (peace of mind from warranty, potentially lower maintenance cost, being able to take take advantage of improved technologies or new features, being able to choose the color or options that you want); all those reasons have an associated utility. There are plenty of other factors that people consider when buying new vs used that have utilities associated with each of them; knowing that someone else hasn't [/s]puked in[/s] messed with the car, knowing the full, true history of the car, being able to have the latest thing, etc. And everyone's utility scale is different; some people will care more about those reasons in favor of new cars, and hence go buy a new car, and some people won't care about those reasons, hence go buy a used car.

Utility or value, in the end, someone's going to have to buy new cars. If in the long term, no new cars exist anymore since all anyone bought were used cars, then eventually the supply of used cars will diminish or even get depleted as the cars get damaged in crashes, or old cars get junked or parked due to cost of maintenance increasing dramatically as all the parts start to fail and need replacement, or as cars otherwise become unfit for the road.

I get why people want to buy new cars. I thank people who buy new cars because their purchases allow me to then purchase my cars used at a relative bargain.



Which is why most people don't own old cars, and why people buy new cars with warranties.

Not everyone wants to or enjoy working on cars, or have the proper tools, or have the time, or have the mechanical aptitude to work on cars. I'll wager that in fact, most people would find it tedious at best. To simply say that people should work on their own cars to save money works well for car enthusiasts or people who gain utility in working on their cars, but for the general population that aren't car people, that's just not worth it. It's a bit like saying that the key to owning an old refrigerator or stove is being prepared to work on them yourself instead of hiring a repairman. It may work for someone who has the time and capability and is frugal or is an appliance enthusiast, but reality is most people just aren't going to work on it themselves, whether because they don't want to or they can't.

Well you've just proven my point haven't you? If you're not all of those things you've just mentioned, then I would suggest you buy a new car!

I personally am a car person, and love working on my car. And as a result, I paid $25k for what was a $140k car new!

As you say though, its not for everyone. Just don't expect to enjoy owning an old car unless you're prepared for it

 

[Danoff]

I must admit I have been thinking about buying new for a while now, the main reason being peace of mind. Don't get me wrong I know new cars can go wrong but the chance is very slim considering the quality of cars being built now.
Plus with some of the finance packages some manufacturers are offering now make it very tempting indeed. 0% interest, deposit contributions, free service packages, warranty. Combined with very low tax, insurance, high mpg, reliability etc.

I could buy a brand new Ford Fiesta ST for a smidge under 20k, for the same price you could get a 10 year old RS4, a 911 hell even a Bentley Arnage.
But what is going to be more reliable? Cheaper to run day to day? Cheaper to fix if it does go wrong? Etc etc

Also remember when a car goes wrong it's not just the price to get it fixed but also the inconvenience of not having a car, which for some it's vital that theirs stays on the road.

So you could get a 2 year old car with low mileage for much less, but I think for some who have the luxury of that much cash to spend they like to personalize their car straight off the assembly line.

The main thing that puts me off is depreciation, as soon as you drive it off that forecourt that's thousands down the drain. So ultimately I will probably go used, but can definitely see the appeal of buying new.

So don't buy a Bentley, buy something that is reliable. Then you can dodge the depreciation AND have something you can maintain. It's not impossible to find reliable used cars that are really enjoyable. Fords don't generally hold their value well (pickup truck exception discussed below).

A majority of people i know who buy new cars, don't actually buy new cars, they lease them. They put down the deposit, choose the spec then make the monthly payments for three years. At the end of that term, the 'resale value' covers the cost of their next cars deposit and the process starts again. Some of these people actually have the cars leased for them by the company they work for or own as company cars, but it's the same thing. I'm struggling to think of anyone i know, young or old, who has ever actually bought a brand-new car.*

My mum's partner changes his cars every couple of years or so when he just fancies something different. He usually buys something that's 6-12 months old with very low mileage. It will still look, feel and even smell like a new car, it will still have a majority of the factory/dealer warranty, but he misses out on the first big hit of deprecation.

*Edit - my Mother-in-law, before she retired, used to buy brand new Hyundais. She had at least three of them in a row. She's obviously a non-enthusiast and bought only the smallest models as she only needed it to commute and go shopping in. Even then, she was only swayed by Hyundai's generous 5-year warranties and servicing packages.

Usually leases are an even worse deal than buying the car. I knew a guy who would buy out leases when they had one year left on them so that he could drive something different every single year. He was rolling in cash and burning it like there was no tomorrow though.

For me, it made no sense to buy a used Tacoma. They hold their value so well that I would have paid only about $5,000 less to have a truck with approximately 60,000 mile and a few years worth of use. I figured it wasn't worth it and just ended up with a new vehicle. In the past I've bought new vehicles for a number of reason, the Blazer and Focus both carried employee pricing which made them more affordable and the MINI has the similar problem with the Tacoma since at the time their resale value was super high.

Ladies and Gentlemen this right here is what I mean when I say:

Uh huh... won't happen because prices adjust to reflect supply and demand.

Used pickup trucks maintain their value so well that people buy new, and that would happen with cars as well if more people bought used. A pickup truck is a good vehicle to purchase (yes, even new) from the perspective of maintaining value (in the US). A tacoma especially so. Pickups generally don't increase in value.

I don't really agree with your stated goal. I think the goal isn't necessarily to get value, but is to get utility.

Utility is a subset of value.

In that context, then purchasing new cars can make sense. People derive utility from more than just monetary gain or on the flip side, minimizing monetary loss. Others have posted some reasons that people may want to buy a new car (peace of mind from warranty, potentially lower maintenance cost, being able to take take advantage of improved technologies or new features, being able to choose the color or options that you want); all those reasons have an associated utility.

I agree that those things are worth something. A new car with a warranty, an mp3 player, and the color you want is definitely has some value. But it's not 10s of thousands of dollars unless that amount of money holds very little value to you. The warranty (and "peace of mind") especially can be reduced to a dollar amount. In fact, that's what car companies do when they create the warranty in the first place, assign a dollar value to it.

There are plenty of other factors that people consider when buying new vs used that have utilities associated with each of them; knowing that someone else hasn't [/s]puked in[/s] messed with the car, knowing the full, true history of the car, being able to have the latest thing, etc.

Test drive, pre-purchase inspection and carfax. Done. If you can't tell someone has puked in the car, what do you care?

Utility or value, in the end, someone's going to have to buy new cars. If in the long term, no new cars exist anymore since all anyone bought were used cars, then eventually the supply of used cars will diminish or even get depleted as the cars get damaged in crashes, or old cars get junked or parked due to cost of maintenance increasing dramatically as all the parts start to fail and need replacement, or as cars otherwise become unfit for the road.

See Joey's post above for why this is wrong.

Not everyone wants to or enjoy working on cars, or have the proper tools, or have the time, or have the mechanical aptitude to work on cars. I'll wager that in fact, most people would find it tedious at best.

You do NOT have to be a garage mechanic to own a used car. You can actually in fact come out ahead taking the car to the dealership every single time something goes wrong and getting a loaner. It's hard to rack up $20,000 in depreciation paying people to service your car. People choose to work on their used cars because they're cheap and want to save even more money.

This thread has got me thinking as I'm planning on buying a pickup sometime next year. First I looked at what was available for used Silverado's fitting what I want (not many) followed by configuring a new version.

This is how they compare:

Under this example I'm presuming either way the truck will die at 200,000 miles. Pricing by year is solely based on the listed price and doesn't take things like insurance, loan interest and negotiating into consideration.

2014 Chevrolet Silverado 1500 LT (Regular Cab, Short Box, 4X4, V8) (Certified Pre-Owned)
$27,777
25,509 miles

Factoring in the existing mileage it would last me about 13.5 years and would cost $1,920/year.

2015 Chevrolet Silverado 1500 LS (Regular Cab, Short Box, 4X4, V8)
$31,000
0 miles

A new Silverado would last 15 years and would cost $2,066/year.

There are obviously quite a few things that could alter that and would probably vary depending on the vehicle, but at least as far as the Silverado is concerned you might as well spring for the new option and get the better warranty.

The Silverado is a decent value purchase even brand new, but better would be a tundra. That's because Toyota > Chevrolet in terms of build quality.

 

[TheCracker]

I think the 'strategy' would differer depending on where in the world you reside. Taxation on new cars, and the selling of used cars, changes greatly in different countries (and maybe from state-to-state in the US?) This will be a big factor - especially for the non-enthusiast who just wants transport, which is most car buyers. From what i've seen, the depreciation percentage on US cars appears to be a fair deal slighter than it is in the UK and Europe too.

Non-premium large and mid-sized saloons, small people carriers, and oddly, small electric cars all depreciate terribly. In the US it looks to be more premium sedans and compact/hatchbacks which take the biggest hits. In the UK small hatchbacks tend to keep their value better. Being a smaller country, the mileage we do per year here is on average much less. 8000 compared to 13,500. Smaller hatchbacks will be used for shorter local journeys mostly, where as a majority of your large and mid-sized saloons are the fodder of daily motorway using business men and woman. All market-driven i guess.

 

[Northstar]

The Silverado is a decent value purchase even brand new, but better would be a tundra. That's because Toyota > Chevrolet in terms of build quality.

When the time comes I will probably look more at the mid-size trucks as a full-size one seems like overkill. I used the Silverado for my example as it was the only one I could find fitting my requirements in used form. When the time comes and I start shopping I certainly will do plenty of research.

Now, having said that I thought I would run the numbers on a Camry...

2015 Toyota Camry LE
2,486 Miles
$19,000
1,266/year

2016 Toyota Camry LE
$24,000
$1,600/year

In the case of the Camry at least it would seem like the certified used version would be the one to go with as Toyota has a pretty good CPO warranty program.

 

[Danoff]

When the time comes I will probably look more at the mid-size trucks as a full-size one seems like overkill. I used the Silverado for my example as it was the only one I could find fitting my requirements in used form. When the time comes and I start shopping I certainly will do plenty of research.

Now, having said that I thought I would run the numbers on a Camry...

2015 Toyota Camry LE
2,486 Miles
$19,000
1,266/year

2016 Toyota Camry LE
$24,000
$1,600/year

In the case of the Camry at least it would seem like the certified used version would be the one to go with as Toyota has a pretty good CPO warranty program.

http://www.autotrader.com/cars-for-sale/vehicledetails.xhtml?zip=80023&endYear=2005&modelCode1=330I&showcaseOwnerId=0&makeCode1=BMW&startYear=1981&firstRecord=0&maxMileage=100000&searchRadius=0&maxPrice=16000&showcaseListingId=0&mmt=[BMW[330I[]][]]&listingId=380810944&Log=0

2004 330i with 75k mi for $8500.

http://www.autotrader.com/cars-for-sale/vehicledetails.xhtml?zip=80023&endYear=2005&modelCode1=330I&showcaseOwnerId=0&makeCode1=BMW&startYear=1981&firstRecord=0&maxMileage=100000&searchRadius=0&maxPrice=16000&showcaseListingId=0&mmt=[BMW[330I[]][]]&listingId=426441184&Log=0

2003 330i with 65k mi for $9,900

Set aside about $5k and take it to a mechanic. Have them replace the fuel pump, expansion tank, water pump, belts, pulleys, oil filter housing, valve cover gasket, disa valve, spark plugs, radiator hoses, control arm bushings, fuel filter, brakes (if needed), tires (if needed), and maybe replace the driver's seat (if needed). It'll treat you right for a very long time (and hold value better, and be more fun, and look better, and cost thousands less).

 

[Northstar]

http://www.autotrader.com/cars-for-sale/vehicledetails.xhtml?zip=80023&endYear=2005&modelCode1=330I&showcaseOwnerId=0&makeCode1=BMW&startYear=1981&firstRecord=0&maxMileage=100000&searchRadius=0&maxPrice=16000&showcaseListingId=0&mmt=[BMW[330I[]][]]&listingId=380810944&Log=0

2004 330i with 75k mi for $8500.

http://www.autotrader.com/cars-for-sale/vehicledetails.xhtml?zip=80023&endYear=2005&modelCode1=330I&showcaseOwnerId=0&makeCode1=BMW&startYear=1981&firstRecord=0&maxMileage=100000&searchRadius=0&maxPrice=16000&showcaseListingId=0&mmt=[BMW[330I[]][]]&listingId=426441184&Log=0

2003 330i with 65k mi for $9,900

Set aside about $5k and take it to a mechanic. Have them replace the fuel pump, expansion tank, water pump, belts, pulleys, oil filter housing, valve cover gasket, disa valve, spark plugs, radiator hoses, control arm bushings, fuel filter, brakes (if needed), tires (if needed), and maybe replace the driver's seat (if needed). It'll treat you right for a very long time (and hold value better, and be more fun, and look better, and cost thousands less).

If I were in the market for a sedan that probably would be the route I would take. I just wish the used truck market had those types of good deals.

 

[a112]

Tips for buying a car in Europe:

-Avoid new platforms - if You have some money to spend, buy a new car that's available on the market for quite some time - check out user reviews before buying

- Get Your car fully loaded if You can afford it - it will depreciate less and will be more desirable in the used car market when/if You decide to sell it

- Avoid modern diesel cars, especially if you live in the city and if you plan to own the car more than 5 years. It only pays off if you are doing longer open road driving and replace the car within warranty.

(problems with Dual mass clutch, bunch of various sensors, turbochargers and solenoids, Common Rail injectors, pump, pressure regulator, complex timing belt systems with many components, destroyed engine mounts, frequently faulty alternators, starters and batteries when exposed to city driving, DPF filters, more wear on the front suspension and brakes and on and on and on...)

- Avoid french cars - especially PSA group due to their engineering strategy - labour hours and costs of certain parts are enormous

- Avoid Opel in general

- Avoid korean and romanian cars

- Check out maintenance costs before buying (filters, timing belts/chain, discs/pads, clutch kit, tires, suspension) ie. most of the japanese petrol cars are chain driven with one tensioner/pulley on the v-belt and external water pump, alternators with regular pulleys etc.

 

[LM7325]

One of my cousins owns a salvage title '95 840ci. Car was totaled due to engine failure. I adore the car, it is in decent shape. Sadly it is almost worthless though. He had rose colored glasses on going in and the seller knew it. He paid $5,500.

Edit: The engine failure was due to flood damage, the point is watch out. If it seems too good to be true it probably is.

 

[Danoff]

If I were in the market for a sedan that probably would be the route I would take. I just wish the used truck market had those types of good deals.

Sorry, I was responding to the Camry.

 

[Northstar]

Sorry, I was responding to the Camry.

I know, I was just saying that if I were looking for something like a Camry I would probably go for something similar to the cars you posted instead.

 

[Murcie_LP640]

Very simple used car buying tips for Australia:

Don't bother buying a Subaru (unless it's a performance model), Toyota (unless it's a Lexus) or Honda. They have the best resale value on the market and you can get a newer car with more value for less money and still get your reliability by going for Nissan, Mazda, Mitsubishi, etc.

The German 3 are generally avoided due to a perceived unreliability; usually though it's the engine and gearbox that are robust but they have little electrical niggles that just annoy the 🤬 out of you. Going back to Lexus, Lexus has the worst resale value of the main four luxury brands in Australia but they have the best reliability and the best value. Go figure.

Oh, and avoid any VW with a twincharged engine or 7-speed dry-clutch DSG.

 

[Danoff]

Updated the thread title to branch this out into a wider topic.

I've seen some anger here toward car collectors and I don't get it. You should all be car collectors. How many of you own stock? I bet quite a few of you do. You have contributions to a retirement account that automatically go into the stock market, or your employer contributes to one of your behalf, so you direct that to your favorite fund. What do you really know about Tesla stock? Or the S&P 500? or AAPL? Municipal Bonds? The top 10 holdings of your Lifecycle fund?

I know what you guys know about. I know that you guys can go on and on about an RX-7, or a Supra, or an M3. Why are you not at least partially invested in that? You have funds riding on stocks you that you don't know nearly as well as some collectible car. You could own the car instead, enjoy it, and in some cases (in most cases when considering individual stocks) have a better expected return.

Why do you guys hate car collectors? You should be one. What's the problem with owning a car you don't drive every day?

 

[Joey D]

What prohibits me from collecting cars is not the cost associated with them but rather the room. If I had more property that I could put up some sort of second garage I would consider owning a couple more cars, but as it stands between my wife's car and all our stuff, our garage can't hold anymore vehicles.

I guess I do hate car collectors though, not because of what they collect, but rather because I'm jealous that they are able to do so.

I am a little perplexed by people that buy cars though and never drive and enjoy them. Even if you only drive it occasionally you are still getting enjoyment out of it, but people who buy a car then proceed to hide it away in a climate controlled garage and never let it see the light of day make me scratch my head. I get it's your money and you can do what you want with it, but it seems like a waste to let something like that just sit.

 

[II AntR II]

Because driving a car depreciates it unless we are talking about multi-million dollars cars, which regular people cannot afford.

 

[Danoff]

What prohibits me from collecting cars is not the cost associated with them but rather the room. If I had more property that I could put up some sort of second garage I would consider owning a couple more cars, but as it stands between my wife's car and all our stuff, our garage can't hold anymore vehicles.

I guess I do hate car collectors though, not because of what they collect, but rather because I'm jealous that they are able to do so.

I'm also out of room for cars. Though, I'm probably going to put a lift in my garage so that I can put more cars in there.

I am a little perplexed by people that buy cars though and never drive and enjoy them. Even if you only drive it occasionally you are still getting enjoyment out of it, but people who buy a car then proceed to hide it away in a climate controlled garage and never let it see the light of day make me scratch my head. I get it's your money and you can do what you want with it, but it seems like a waste to let something like that just sit.

Because driving a car depreciates it unless we are talking about multi-million dollars cars, which regular people cannot afford.

So, to make this personal for a second. I have... collected... a car. But I see it in my garage every time I go to work, and every time I get home. I get to enjoy it just being there, not moving, because I walk past it and think... man that thing is hot. I think I've put about 250 miles on that car so far, and I've owned it for almost a year. I'll probably keep it up at about that pace, so in 20 years I'll put maybe 5,000 miles on it. But I've enjoyed those 250 miles this year, and I've enjoyed looking at it every day.

I have a car collector friend who has 30+ cars. When the weather is good he drives a different one to work on a regular basis - because they need to be used at least a little to say in good condition. It's hard to maintain a car if it's really never driven. But he has 30+ cars. He can't put a lot of miles on them. If he puts 1000 miles on one, the rest of them get none. If he drives 12,000 miles in a year, he's putting 400 miles on each if it's divided up evenly. I've enjoyed his cars just by walking through his garages. I probably enjoy them MORE by looking at them than by taking a ride in them. In many cases they're from the 60s, they're probably slow and loud and not very safe. But they sure are pretty. I can't see them when I'm in them.

 

[Joey D]

So, to make this personal for a second. I have... collected... a car. But I see it in my garage every time I go to work, and every time I get home. I get to enjoy it just being there, not moving, because I walk past it and think... man that thing is hot. I think I've put about 250 miles on that car so far, and I've owned it for almost a year. I'll probably keep it up at about that pace, so in 20 years I'll put maybe 5,000 miles on it. But I've enjoyed those 250 miles this year, and I've enjoyed looking at it every day.

You still drive it though, even if it's a small amount. Also, judging by your thread about the car you work on it occasionally too. I don't have a problem with any of that since you're still enjoying the car. What I do end up taking an issue with is when someone buys a car then locks it away and never drives it, works on it, or even really look at it.

 

[Danoff]

https://jalopnik.com/stop-taking-car-buying-advice-from-professional-million-1832966618

I can't stand this article.

There are a few points I want to address from the article (these are the article's points, not mine):
1) It's a fallacy that cars are investments
2) The Toyota exception to the rule
3) Assuming a loan
4) Accounting for the irrational
5) Poor people don't have time to shop
6) Poor people don't have time to not have a warranty

Ok, let's start with number 1. Since regular joe doesn't have big bucks, he can't buy cars that are going up in value, his cars are not an investment. First of all, that's not true. Everything you buy is an investment, and a lot of it has a negative return. Your goal (if you read the first post in this thread) is to buy value, in the case of depreciating assets it's to buy something that's not going to tank in value quickly. You should be minimizing the negative rate of return. Ok so when you buy toilet paper you don't care about the negative rate of return, because you're going to use the entire thing up and have nothing left to sell. That is almost never the case with cars. But even if you do plan to drive the wheels off of it until it literally is headed for the junk yard, if you're buying value, you're looking at running a lightly used on into the ground, not a new one. So this whole "I don't have the money to think about cars this way" is completely bogus. You can think about cars that way when buying a $2000 used honda.

Number 2) but.. but... toyota pickup trucks! Yes, there are times when buying new makes sense. Certain Porsches, pickups, etc. That's a tiny fraction of all cars out there. It makes no sense to tell people that buying new is a good idea just because there are a few models that buck the trend. The general rule is that buying new is a bad idea financially. It's a luxury. Yes there are exceptions, no that does not change the message.

Number 3) Why do we assume that people need a car loan? You can buy an entire car for the down payment on a new car. If you can't buy the car outright, you probably (note that word probably), shouldn't buy it at all. There are very inexpensive reliable cars out there, buy one of those. If you can buy the car outright and you're offered a crazy low-interest loan, go for it. But the loan is a completely separate transaction that has nothing to do with the car and everything to do with getting the most out of your money.

Number 4) Yes, car buying can be irrational. People pick cars that they like even if the numbers don't add up. That's fine, that doesn't not mean that we should be recommending that people buy new. That means that some people will go against the rational reasons to buy used and that's ok. That's their prerogative. It doesn't change the message.

Number 5) Poor people and rich people and everyone in between are busy. You don't suddenly have gobs of free time once you get some money. If you can save thousands on a car, it's worth a few hours of your time (unless you're insanely wealthy).

Number 6) First of all, you can get a warranty on a used car. I just bought a used car with a warranty last year (certified pre-owned toyota). Second of all, you're going to spend at least as much time on each service call with or without a warranty, because someone actually has to spend the time working on it. Sure you get a loaner if you take it to the dealership, but of course you don't have to have a car under warranty to take it to the dealer for service and get a loaner. I've done that one as well. There's also uber.

Ok, let's take my real world example. And it happens to be a large toyota, which the article listed as a possible reason to buy new. My 2015 Toyota Sienna with 40k mi was $28,800. At the time, the 2018 Sienna with a similar package (same generation) was going for about $42,000. My savings for buying used was $13,200. But it doesn't stop there. Because in CO we have a 3% sales tax on car purchases and a 2% first year registration fee (0.75% registration fee on the 2015). So The $42,000 van costs $44,100. And the $28,800 van costs $29,880. For a difference of $14,220 initially (registration fees are higher each year thereafter for the new car for the next 10 years). I'm guessing insurance costs more too, but I can't be bothered to look that up. So $14,200 in savings in exchange for 2 fewer years of warranty, 40k mi taken off the life, and me putting up with some lack of customization (I wouldn't have picked black).

What's 40k mi worth on the life of the car? That's a tough call. Let's assume that you were going to own the car for 100k mi and then sell it. If you buy it at zero and put 100k on it, what do you sell it for vs. buying it at 40k and putting 100k on it? The difference between those sales numbers is what the mileage is worth. A quick glance at autotrader is telling me that the figure is probably about $6k. So we're down to $8,200 in savings.

$8,200 buys a lot of maintenance. A looooooot of maintenance. It also buys a lot of time shopping. The lower your wages, the more of your time it theoretically buys. Keep in mind this is a Toyota van, this vehicle does a pretty good job of retaining value.

Buying new is a luxury. You get to pick out just want you want, you want the tech package with the cornflower blue exterior with the charcoal interior and brushed nickle inserts. No problem sir, right away sir! It smells brand new, and you know that nobody has ever put their rear end on that seat before you. Lovely... it's gonna cost you.

Honestly, I cannot believe how much people are willing to spend on the luxury of buying new. But even worse, I cannot believe that it's sold to people who are "scraping by" as a responsible decision.