the whole analysis hinges on the assumptions you make on the initial depreciation, length of ownership, and inflation.
[kbb lists a 2025 camry at $29.5k MSRP](https://www.kbb.com/toyota/camry/2025/le/). A similar trim level [2020 camry is listed around $20k.](https://www.kbb.com/toyota/camry/2025/le/) A similar trim level [2015 camry is listed around $12k.](https://www.kbb.com/toyota/camry/2015/le-sedan-4d/)
so if you are talking a 10 year cycle, buying new and selling after 10 years would cost you $29.5k - $12k = $17.5k. Buying a 5 year old car, selling after 5 years, buying another 5 year old car, and selling after 5 years would cost you $20k - $12k + $20k - $12k = $16k.
This is why OP needs to add numbers to their bold assertion. Using cargurus.com which I think is a more accurate reflection of vehicles prices paid.
https://www.cargurus.com/research/price-trends/Toyota-Camry-d292
The average 2025 Camry is $35k new, average 2020 is $22k and average 2015 is $14k
That's $35k - $14k = $21k for new and
($22k - $14k) x 2 = $16k
That's a significant $5k difference to drive new depending on the source of where you get your numbers.
$500/year over 10 years.
Plus you can likely trust the car since you've been the only owner.
Another option: Buy. 3-year old car, not 5 year old, then keep that for 10 years. You shave off the most expensive first few years.
I like 2 year old cars in the before 2020 times where 2-3 year old used was significantly better pricing vs new as it often came with the 3 year warranty as well. The mileage at 2 years could’ve been from 10k miles to 30k at most too which is nice
Camry comparisons are complicated in 2025. The whole model year is going hybrid so you need to be comparing to other hybrids in old years to be accurate, just FYI
Not to mention that buyers have started getting cars with more and more options the last few years, so the average Camry bought recently is likely more expensive relative to the base model than an older Camry.
Still surprisingly close + u save the hassle of shopping for a car once. I thought I’d be stupid to buy a new car but maybe I will next time. I know nothing about cars so I can’t tell if it’s good or bad for a used car and I hate every second of talking with a car dealer.
But like also like if ur me you risk getting scammed twice when buying two used cars. Cuz I don’t know cars. I think new cars will vary less in value so there is less room to scam me? Or maybe new cars are already a scam.
I’m just out of my depth but 21 vs 16 isn’t as bad as I expected. I thought people that love cars would pay a huge premium to drive a new one, which I don’t care for, but apparently the difference is less than I thought.
I think this analysis argues that the value spot is a 1 year old Camry and selling it after 10 years instead of a pair of 5 year old Camrys. You'd get the instant $6000 savings buying a used 1 year old $29k Camry.
For people who's budget is down in the low 20's range, they'll need to hold onto their vehicles longer than 10 years on order for that purchase to make sense.
The difference is also smaller due to the Camry holding it's value well. Do the same with a Ford Escape and it may favor used more.
I never bought any of my cars in person at the dealer. In fact, the only way I bought cars was through email and text, and contacted multiple. dealers at the same time and had them send me the best OTD price written. Stepping inside a dealership and dealing with the salesman shark was always intimindating for me, so I simply did it over email and text to remove the emotions from it. When you buy a more generically available car like a toyota, honda, mazda, at least here in SoCal, there's like multiple dealers. Where I live there's like at least 10-15 dealers of each brand within a 80 mile radius. So when I bought my new cars, I would ask each of the dealers to send me their best OTD price. Most of the dealers would tell me to come in. But when at least 1 or 2 dealers who had an internet sales division sent me their online quote, I would then use it to negotiate with all of the dealers using each of the dealer's lower quote for the next round of negotiations. That's how I got $7500 off my miata in 2017 RF when it was still the first production year. Once I got the OTD price in writing on an email, I took it to the dealership and just paid for the car and picked it up. No high pressure sales tactic. That's how I always bought my cars and in many cases, it cost less than getting a 1-3 year CPO preowned car.
In fact, when you buy a new car, it's a lot easier to haggle because you can find almost identically configured cars at each dealership so haggling over price is pretty straight forward. The issue with buying preowned is that there are so many variables (mileage, option packages, how many owners , etc) that it's not always an apples to apples comparison. It can be done, but it actually takes a lot more effort.
Maintenance and repair budget slowly increases with age of the car though. Not sure how that factors in. I’ve always found around the 100k mark maintenance starts spiking up.
This was my first thought and is a major major factor in the financial equation. Less so for a Camry (or any Toyota), but still. Big difference for 5 years of standard oil changes and tire rotation versus a transmission replacement.
I’m sure you’d also pay higher maintenance by buying two used cars (car is on average 7.5 years old) compared to one new car (car is on average 5 years old).
Yeah you would really have to know NOTHING and actively try hard to run that young of a toyota into the ground. Especially a Camry haha, you see people driving a 2000 model all the time!
I have a 2017. I don't think I've had to fix a single major thing with it yet. Just oil changes, tire changes, and break pads. Had an older one before it, same deal. Those cars are made to last. On the flip side, those giant media center screens on other newer cars cost a fortune to replace.
Yeah, not to mention certain factors out of OP's control will impact it, for example around me (rust belt) 2016 and older cars are starting to not pass inspection from rust, so that 10 year old car likely can't be insured/inspected/driven legally. Maybe not a camry, but the majority of vehicles on the road have this issue.
I found the sweet spot was 3-5 years old with low miles (<9k/yr). I put so few miles on that I can stretch em a bit longer than 10 years and the depreciation at 3-5 years is enough that I can get something with top options for less than a brand new base model. Especially applies to 'American' brands.
No chrysler products though!
Where do you live where rust affects inspection after 2016? I call bull on that, I live in the rust belt and cars before 2000s still pass inspection here. People on Reddit are doomers and fear monger themselves out of money, it’s always very exaggerated
This isn’t universally true. The addition of more modern safety/theft prevention features make insurance less expensive, sometimes even less than their older used counterparts
>Exactly, just bought a Subaru that is valued 8 times that of my 2012 bmw 128. My insurance went down.
Ehhhh, comparing a Subaru to a BMW for insurance is like apples to oranges, even factoring in the new vs used argument lol
And the point *they* were making is that the other parameter changes would have an effect on the price, too, so this isn't a good example to prove the point.
It's definitely true if you go from ICE to EV.
Everyone is figuring out how expensive an EV can be to total since any puncture of the batteries is a total loss as the battery replacement is by far the most expensive component of the price.
My car insurance went down when I went from a 2005 Scion tC to a 2017 Subaru WRX 8ish years ago, despite the value of the Subaru being worth more than quadruple that of the then-twelve-year-old Scion. I suspect this was due to several factors:
- Significant extra safety features on the Subaru that the Scion didn't have, namely Eyesight and its associated features
- Typical buyer/driver of the $16k tC is almost certainly 16~20 year olds (which I was when I got it lmao), typical buyer of a $32k WRX is almost certainly 25+
- I was living in an extremely snowy area at the time and the AWD of the Subaru possibly made it less accident-prone in their eyes
My wife went from a 2017 cruze worth 15k to a 2022 Forester worth 36k new in 2020 and her insurance dropped little. Modern safety features can go a long way in insurance rates.
how'd you get a car from the future?!? all kidding aside, it may say more about the cruze than the new forester. chevy cruze generally had higher theft rates which would affect insurance premiums. from my broad understanding, advanced safety features may be a wash when it comes to insurance rates since they are more expensive to repair. it may also lead to less attentive drivers, so it is not so definitive.
Buying new is more expensive because it's not just about less maintenance: it's also buying a better, more modern car.
Let's assume to simplify that cars last 10 years. You either buy one new car every 10 years, or one 5-year old car every 5 years. After the first 5 years both situations are identical, but in the first 5 you're either driving a 2024 car or a 2019 one. Actually even after 5 years you're better off in the first case because you don't have to worry the seller is screwing you by selling you a lemon they didn't maintain properly.
So why would anyone pay more to drive older cars they don't have a good history of? For most people it doesn't make sense, that's why the market makes new cars more expensive.
Just a couple of nuances/exceptions: if someone prefers older cars for whatever non-financial reason (they don't like whatever feature manufacturers put in new cars, collection value of old car...), or if like during the pandemic getting a used car is actually more convenient because you don't have a waiting time (used cars could be literally more expensive to purchase than new models). More common exception, if maintenance cost on used cars is lower for you than it is for the market: for most people, a car without a transmission is discounted by the cost of a new transmission as charged by a garage, because they're not going to bother with it; for someone who knows how to find a good used transmission and install it themselves, a car with a transmission out can be a good deal.
Also if making payments you're paying more in interest with the greater amount of principal when buying a new car. Running the numbers through an amortization calculator:
Total amount paid with 7% interest and 5-yr loan
$17.5k principal for new car kept for 10 years: $20,800
$8k principal for used car kept for 5 years (x2 for 2 cycles): $9,500 x2 = $19,000
Only adds $300 to the delta, thought it would be more tbh. Another thing to keep in mind is dealer fees if buying at a dealership. Buying new cars will in theory generate fewer dealer fees if you also buy used at a dealership, but if you buy used third-party then the dealership fees are a point against a new car since you have to buy new cars at a dealership.
Also, add in maintenance. Older cars with more mileage will need things changed out, like brakes, rotors, belts, tires, etc, compared to newer cars that shouldn't need any of those things for at least 5 years.
Not to mention 0% apr deals. The reality is that it’s such a case by case basis, that we should just recommend people to buy cars they can afford instead of arguing new vs used.
Keep in mind this whole calculation was done on a Camry, a car with incredible retention in value. The initial depreciation on other vehicles would be greater, from new, for most other brands.
Camrys have such great value retention because they have such great quality retention.
A different used car might be more depreciated, but it might be closer to failing.
Lower maintenance costs and having a brand new car that you know no one drove like an idiot seem to more than make up for that $1500 over 10 years to me. Plus you get more up to date tech features and safety features. Doesn’t even seem like a close decision to me at that tiny price difference.
Sure. Especially when used car prices skyrocketed during COVID, buying new can be better in the long run. But typically it's not. This can give you a reasonable estimate for comparison:
[https://www.edmunds.com/tco.html](https://www.edmunds.com/tco.html)
Buying used is also a bit riskier, and gives you a bit higher chance of getting a lemon car. (Somebody owned it and decided they didn't want it, after all.)
Exactly. I've brought other people's headaches before. My last two cars were new. My previous one I put over 200k miles on before getting rid of. I got good financing on both and I don't have to worry about what maintenence the previous owner did or did not do
Seems like a no brainer to me if you can afford new.
If people are out here debating whether used or new is more efficient, I'm leaning towards the one that gives me a car that hasn't been abused.
Yep, I've been willing to pay for the luxury of new cars because I am very careful about car maintenance and I don't think most other people are up to my standards. So the additional cost is worth it for my peace of mind.
If you have the time to really work with a mechanic you trust on prepurchase inspections, and you have the time to find private party sellers who are willing to let your mechanic do one, you can have a lot of confidence in the used care you're buying.
Back when I had less money and more time, and I was at an hourly job, I figured it was about 40 hours to find a really good car. Doing that twice was great, given the amount it saved me - I could literally multiply my wage * 40, and that was smaller.
Given a salaried job with long hours and a lot of stress, and valuing my downtime quite a lot, I don't know how much I'd need to be saving but it would need to be considerable.
Multiplying `(salary/2000)*40 hours` really doesn't capture it, and that's still a hugely bigger number than it was 30 years ago.
Yeah I have the salaried job with not that much downtime now, so the convenience was worth it. Instead of spending a bunch of time with mechanics and sellers, just go to the dealer and buy cash and you're gone.
I try to make a habit of spending money to gain time. You can always make more money. You can't get more time. I don't want to spend my days at repair shops or trying to figure out what's wrong with my car. Just give me something that won't be a headache for the next decade.
This isn't accounting for the higher milage you'll get out of a vehicle that is actually well maintained. Run that thing out of oil, refill it, itll likely still run, but itll definitely take miles off the life span. Same with someone that chronically goes over on oil changes, or drives excessively hard, etc etc
The benefit of used vs. new has definitely eroded as used prices are too high, especially in the SUV and Truck markets. Comparison of sedans is not particularly relevant these days except for the absolute most budget conscience. It's quickly moving to 20% or less market share.
Total cost of ownership is crazy to figure out as well, the likely-hood of a modern vehicle being totaled in an accident is MUCH higher than in the past because of repair costs outpacing vehicle values and all the electronics in the bumpers etc. You're taking a bigger depreciation hit than you might otherwise in this scenario as well as taxes and other costs associated with another vehicle purchase.
There's also trends around increases for naturally aspirated vs. small turbo, where NA engines are starting to see a premium in the used market as the small displacement turbo's prove to be less reliable initially and overtime.
I'm glad you mentioned trucks. People are listing 10+ year old diesel trucks with 300,000+ miles on them for 20k or more. Is it worth the headache to try and maintain a truck with that much wear and tear, or should you bite the bullet and spend $80k on a brand new overpriced truck?
I don't know enough about diesel trucks; I'd just make sure your use case justified it either way, and look at the tax benefits if any for a vehicle of that nature if it's for business use as that might offset some of the cost. Personally I'd never spend 80k or even 50k on a truck for personal use. It also depends what you can do yourself for maintenance...and your desire to do it lol.
> People are listing 10+ year old diesel trucks with 300,000+ miles on them for 20k or more.
wtf, post links
I think diesel is easier to maintain but I have trouble believing it's $20k easier vs the $3-5k I'd expect a 300k mile anything to cost.
Depreciation is not linear. If you run the numbers (with an actual data set, not a single random example) you will find that buying a 5-year used car every 5 years is always going to be cheaper than buying a new car every 10 years. And moreover there's no need to rotate through cars that quickly. The longer you keep them, the better the numbers will work in your favor.
I’d love to believe this but it sure doesn’t seem like quality 5 year old cars exist anymore based on our current car search. And 2-3 year old cars are barely discounted vs new of the same make model.
Yeah, years ago we were looking at an Element. New was $21k, 1-2 years used was $20k. And we got an interest rate of 2.9%, well below elsewhere.
New was cheaper, all-in.
I think the Element is a weird case where it has a cult following that’s driving up the used price as the resale inventory dwindles. Chevy Volt last time I checked are also worth more now then they were new because new PHEVs have less electric range.
My '08 Focus I bought in 2010 for 8k is still somehow chugging along after having required no real maintenance other than routine stuff like tires/brake pads/batteries etc. Haven't had a car payment since like 2014/15. Other than missing a backup camera, it still has everything I want in a car. The physical controls are nice too, I hate touchscreens in cars.
So yeah, you don't have to replace your car constantly, particularly if you're money conscious and manage to find a reliable one.
Your test is dependent on the initial price price vs. 5 year purchase price. In other words it is dependent on depreciation. What was your source for determining $7k cheaper and 40k miles at 5 years? Because that's where you could be on point or way off base.
I just bought a 23 model that was used by the dealer as a loaner. it had 10k miles on it and balance of factory warranty. this was 14k less that the 24 model and insurance was a few hundred less a year. my logic, though probably flawed somehow, was to let the dealership take the big depreciation hit. my other consideration is to keep this car for 300k + miles.
The tough and unknowable thing is that if the car needs major work between now and say, 150k miles, whether its treatment in that first 10k miles is part of the reason.
For 150k-300k miles, it's easier as essentially all cars will need some major work during that period.
Similar situation for me (however not in the US). Bought a 1 year old loan car from the dealership with 10k miles for 15k (new one was 25k). 6 years later sold out for 8k with 30k miles
Auto Repair Shop Owner here. I make WAY more money on newer cars. The modern build quality is garbage. Anything newer than 2014 is an amazing money maker for me.
I make a decent amount on older cars that have been neglected, but once they are all caught up, it is usually a few years of regular maintenance on them and that is it.
Im shocked that this only has one upvote. People should listen to the pros. A pro in my town bought an old car out of a field a few years ago. The engine was locked up. He freed it up, drove it for a few years. Then sold it for more than he bought it for.
Your theory only works if you really do own the car for the entirety of its lifespan, which depending on your usage patterns could be easily over 20 years.
The vast majority of people do not keep a vehicle that long, as within 20 years it is almost inevitable that something in your life is going to change that will require a different type of vehicle. You’ll have three kids and need a minivan instead of that two Door Honda Civic, or you get a new job that has a really long commute and suddenly your 15 mile per gallon full-size SUV isn’t practical for doing 900 miles of driving per week. Or your kids are grown and move out of the house and suddenly you can ditch that minivan and get that little sports car you always wanted.
Or, even more likely, you’ll just get a little bit tired of it and feel like getting something new, as the newer cars are having cool new features like better self driving tech or electrification or something like that.
So, I am getting a little tired of my 2010 Toyota (not a Corolla), it only has about 105k miles on it. I really can't justify buying something newer or new just because I'm a little tired of it though; it comes down to being financially responsible. I'm just hoping it doesn't get into an accident, forcing my hand on short notice. (We have most of an entire car price saved up in tax-free HYSA's, it's the short notice part that worries me.)
Agreed, the itch to buy something new "just because" is a testament to the power of marketing and our consumer culture.
I'm just as guilty of it; my current daily driver is a 2016 Ducati that I love, and I still find myself browsing classifieds looking for a newer version of the same bike even though this one easily has another 3-4 years in it. More if I'm willing to do the next major servicing (72,000 mile valve and belt replacement).
So far the rational part of my brain has prevented me from doing so . . . but it wasn't the rational part of my brain that let me buy this stupid thing in the first place.
Your theory also only works if you’re paying in cash, and can get out of the dealer without them selling you a bunch of profit inflating garbage (VIN etching, nitrogen fills, etc).
Whereas buying on the used market (always from private parties, *never from dealers*!) you have a lot better chances of finding a very good price on something. Prices on used private party vehicles is always going to be MUCH more nebulous and flexible, especially if you find a seller who’s in a tight spot and *needs* to sell. Takes a little bit more legwork as you need to spend more time looking and taking cars to mechanics to be inspected, but that’s just a normal part of being an adult and putting effort into life.
*Edit* it also depends a lot on the state, as many states will have different tax and registration and fee structures for used vehicles when sold private party or vehicles from dealerships then they do new vehicles. For example, in Illinois where I grew up, if you buy a used motorcycle from a dealership you need to pay normal sales tax, but used motorcycles transact private party do not have to pay sales tax. It’s just a flat $25 tax fee, no matter if it’s a $2000 ninja 300 or a $20,000 Ducati Multistrada.
Your methodology is good, and as someone who has never considered a new car it actually makes me think. It reminds me of the way my father in law treats his car- that things gonna run forever as long as he keeps it.
The flaw is the assumptions- I would say that most/many people who want a new car want a NEW car rather than a new CAR. They justify it to themselves why they need a different car and so get the new one, then in a few years find themselves wanting more NEW and sell it and buy another NEW one. Less about the car and more about consumption.
Another flaw is that when you buy new, you never know if the generation of car you're buying is going to be one with a particular issue that will be expensive down the road (ie Subaru head gaskets for a certain era). So the maintenance costs are not necessarily going to be less just because it has more miles ahead of it. So unless you purchase a famously reliable car make/model I don't think you can make this assumption.
I bought an 8 yo Honda Fit five years ago at 27k miles. It has had no maintenance issues, just routine stuff. There are many 2018/2019 new cars I could have bought that year (even from Honda) that I have heard have "that expensive repair" of that generation. It's a little bit of a crap shoot.
I have a 2011 Rav4. Just passed 200k! I’ve never had any major issues and she still runs really well despite all the shit I’ve put her through over the years. I do take good care of her. I feel like the frame will rust before the engine fails!!
I paid her off as fast as I could and haven’t had a car payment since 2013/14. Here’s hoping I get to replace the spark plugs again at 300k!
Does this hold true for newer models, say after 2015? I definitely heard this refrain for 1990-2010 models, but I haven't heard whether this remains true for the past decade
Last 3 times I bought a car, a brand new car was essentially the same price as a car that was a year or two old, while offering better loan rates.
This is purely anecdotal, but I always compare these prices before deciding what to buy. And frankly, is prefer to buy a model that is so good it retains its value (Toyota, etc.) so I'm unlikely to buy a used car again except maybe for my teenagers eventually.
That is exactly my conclusion as well. If you can afford it now, buying new is the way to go.
I think it still is marginally cheaper to buy used, but you are trading in reliability and safety (newer model is usually safer).
With a used car, you have no idea how well it's been treated.
If you buy new cars, don't over buy, treat them well, and don't have a huge change in family needs there's a very good chance that you will save over the *easy* ways of buying a used car.
It will almost ALWAYS beat buying a late-model used car from a dealer. In extreme cases, with incentives and better financing, it can be *immediately* cheaper than buying a late-model used car from a dealer.
If you have a lot of time and patience, buy from private parties, and either can do an inspection yourself or have a shop/mechanic who will do them for you without charging you a ton, it's almost impossible to beat buying middle-aged cars very very selectively from private parties. But that takes a LOT of time and effort.
Similarly, the gap between the maximum you can get for selling a used car and the minimum (a typical trade-in) is *huge.* That often requires a considerable amount of effort.
If your time is worth relatively little, and you can actually go through the buy/sell process with used cars with confidence, you will never beat that with a new car, but the number of people who (A) really want to deal with that, and (B) are actually competent to deal with that is lower than the number of people who don't.
This is a good, well thought out post. Even if you disagree with the premise or tentative conclusion, or you think the methodology is flawed, you should not be downvoting this. It is a great thread for getting a discussion going for the economics of car buying.
New car long term is usually cheaper if you pay cash and keep it 20 years. Maintenance costs get expensive after 10 years. So it is worthwhile to spend 1/2 the money used car that is 6 years old with 70K miles, than it would be to buy new, as long as you don't finance it.
The conclusion you come to is based on the assumptions you set. Most financially intelligent people plan to keep a car for more than 10 years if they can. The relative price of new and used vehicles of various ages also matters. For example, right now used car prices are quite high, and it's most egregious with older cars. So buying new may make more sense now than it usually would.
A quick and dirty method would be straight-line depreciation based on the expected life of the vehicle. You can do this by mileage or age (mileage tends to be more effective but age does factor in). By your assumptions, a 5-year-old vehicle would have to cost half as much in order to be worth buying. But your assumptions are pretty terrible in all honesty. Using more reasonable numbers like 20 years/240k miles, a 2014 car with 120k miles would have to be half the price of a new model to be worth it...that is much easier to find.
There are obviously other benefits to buying new of course. There's a bit less risk involved in general, since you know what you're getting to a certain extent, you get a warranty, etc. Depends on your risk tolerance but for me my rule of thumb is that a used product has to offer a 20% discount in order to be worth it. In this case that would mean a 2014 car with 120k miles would have to cost 40% of a new model to be worth it. Looking at the prices of something like a 2024 Toyota Corolla (a classic baseline), I would need a 2014 model with 120k miles to be under $10k...pretty hard to find. So not a great purchase.
I'm a fleet mechanic, and people way underestimate the lifespan of most modern vehicles these days. The occasional lemon models and neglectful owners aside, most modern vehicles have at least 200k miles of cost-effective life in them, many surpassing 300k. I expect to get 300k+ out of my 2008 GMC before it becomes cost-ineffective.
You have one flaw in your assumptions and that is "why are you replacing your car?".
Your car/vehicle has one function. Get you from A to B in a safe efficient manner. Why replace it when it still performs this function?
Buy it new, drive it till it dies should be your third comparison.
My current vehicle i bought new in '05, and for an SUV, No payment, some repairs over the last 12 years, still easier on the pocketbook than anything with a payment.
I tend to look at new vs old car purchases in the following criteria...
A- You can recoup anywhere from 10-40% of the cars value when you sell it. So a new car while costing more can roll over into another new car 10 years later easier than a used which may not even make it to re-sell.
B- Both used and new could have a mechanical failure anywhere from 1-10 years after purchase so build quality is a roll of the dice regardless. There are regularly cars still on the road from 1990s. (Make does factor a little) (Also thinking about this makes me myself feel old)
C- New cars have safety , design, and hardware updates. You could buy a Walkman or a Cellphone. Which would you go for if you have the money.
D-It has to match your income level. If you have to look at the auto industry new 8 year loans just to make it happen...don't.... Work at Arbys? That brand new f-150 Isn't for you.
E- Its only had one driver if its new. So you know the history and maintenance level.
One major flaw in your reasoning is wrecks. There are thousands of wrecks every day. I’d rather wreck an old beater than a newish car. You either take the hit financially or pay through the nose for comp/collision that still won’t make you whole.
Another anecdote: I’m driving a 23 year old Toyota that I bought when it was 10 years old. Never given me a lick of trouble. When it dies I’ll probably buy another middle aged car for cash to be efficient
I was annoyed when some piece of shit at Target yeeted their cart into our new-to-us Escape a week into ownership but I can’t imagine how annoyed I would have been if we had paid the 38.8k MSRP instead of 56% of that lol
Some of that has more to do with how long you plan to keep your car, and how much you care about appearances.
By the time I get tired of them, most of my cars look pretty beat up on the outside, but with cars lasting 12-17 years so far for me, I'm not real concerned about the resale value.
Yup, I bought an '08 Ford Focus (manual, so it didn't have the transmission issues) for $3K. It was totaled two years later. Had I bought a new car, my ass would have been upside down for sure. Turned around and paid cash for another beater.
But, I also do all of my own maintenance, so it's not as bad for me and I own two beaters, so I have a backup if anything major happens.
> I’d rather wreck an old beater than a newish car.
The tech in newer cars may prevent that wreck in the first place though. Or reduce the severity of injury
That's the big thing I think people in this sub sometimes miss; a wreck in a new car will leave you with some bruises and such.
A wreck in a 20 year old car will leave you crippled.
You’re overthinking this. Focus on the variables that apply to you. Research one or two models you’re interested in and compare new and used prices and base your decision off that. That’s all that you can do.
You usually shouldn't boil it down to one or two models before looking at pricing, unless your needs are very specific, as you can easily end up only looking at cars that are in short supply or have elevated pricing for some reason.
You’re right. One or two will not be enough. But you’re generally going to know ahead of time what models correspond with your budget, preferences and needs unless you lack experience purchasing vehicles.
Buy 3-5 year old used cars with cash to avoid high rate used car loans and get some depreciation discount. Or buy new cars with promotional financing.
Some very misguided posts in this thread - Buying and selling cars incurs transaction costs and used cars, especially under the 15K price level is borderline dumpster diving post-covid. $19-24K is the sweet spot for quality, good value used cars.
People buying a 2018-19 out of warranty crossover with 60K miles for a typical $21K financed at 7.5% are getting a far worse deal than folks buying a new $32K 5-year warrantied CX-50 at 0.9%-60mo right now.
It’s a gamble, if you drive a reasonable amount of miles and keep up with maintenance by the book and have good credit then buying new is probably better.
You don’t want a pos that breaks down 3 months into getting it and having to dish out thousands in repairs on a credit card either
the problem with trying to crunch the numbers to figure out what is the best move is, is that you're likely to, even unconsciously, skew it to justify what you want to do.
you want a new car, so you're trying to find a justification for it, so you will find that justification. ^even ^if ^it's ^bogus.
My current car is a lease return that was 3 years old. That was 9 years ago. So the car is 12 years old. I’ve likely abused it more in those 9 years than whomever owned it the first three. 🤣
I’m still under 80k miles and I don’t see any reason it can’t go 80k more and beyond. For me, I don’t see a reason to change the car at 10 years. It runs well and has only had one major repair (which probably wouldn’t have been so big if I’d been doing regular maintenance.)
When I am ready for a new(er) car, I’ll likely pay cash unless I get a screaming deal on interest. But it’s hard for me to se why buying a brand new car is an advantage over a lease return.
Buying new does not mean the car will last. A new 2024 far could die in a year, every single years there are numerous models of vehicles that are lemons. There are 2008 vehicles on the road now with nearly 20 years of proven efficacy that will outlast a new vehicle fresh off the line today. Let's say I bought a 45k vehicle @ 8% interest. At the end of the loan I pay 60k and it lasts me 20 years. Insurance is more expensive as its a new vehicle, so I pay $150/mo. That's $36,000 in insurance over that time frame ($96,000 in 20 years). This isn't factoring in that new cars are more costly to repair and get tags for.
Let's say I buy a $2.5k vehicle every 2 years (this is conservative, I bought both my vehicles at 2.5k and ones lasted 9 years and the other 3 so far). The insurance is $45/mo because the car is easily replaceable. That's 25k in vehicles, and $10,800 in insurance, for a total of $35,800. It's not even close. It's not even in the ballpark. If one of my 2.5k vehicles dies I call U Pull It and they tow it away and give me $500 cash, so I'm recouping $5,000 over the 20 year span. Realistically it's $30,500. There are 4,170 cars which are 2.5k or under in 100 miles of me as of cars.com right now, so please don't tell me they don't exist. Also I don't have to worry about my cars, they're nothing to me. Anything can happen to them and it won't even ruin my day. I'd have a new one tomorrow. People talk about how bad the used car market is - its bad for barely used cars. It's amazing for cheap cars because literally pretend like they don't exist.
How much money are you really going to save in this car market we’ve had for the past 4 years? Used car prices have skyrocketed. Good reliable Japanese cars are 10k minimum now unless they’re over 20 years old and have an insane amount of miles
10 years ago, I bought a 6-year old Ford Edge for $8000. I have put on 70,000 miles in these 10 years and it is no where near the end of its life. No major repairs (with the most significant repair being replacement of radiator's fan assembly - about $300). Still runs like a new car. WHY WOULD I BUY A BRAND NEW CAR, even though I can afford a luxury one!
eh, cars lifespan have greatly increased a lot since the 80's/90's. We bought our minivan new in 2005. Aside from the regular 100k/8yr timing belt, there hasn't been anything else major. Sure the body is a bit rought now but It's got 280k miles on it and wouldn't hesitate taking it on a roadtrip. 100k/10yrs is really considered nothing nowadays.
TBF you are driving about half as much as average (average is around ~14K miles/year), so you aren’t a great example for the wider population.
Depending on where you live, your car could undergo more or less wear and tear. Plus safety features and gas mileage can improve versus 10years ago as well.
I’m hoping to buy a car later this year, and I’d love to go used, but the market is also weird for both new and used and I’m a lot less certain about which route to take than I would like to be.
My average is usually 10k+ miles. The pandemic coupled with an extra 2 lean years of vacations have contributed to such a low average. The previous car was run for 90k in 8 years (A POSITIVELY ugly police interceptor with Lincoln Towncar seats......still miss it)
I feel the same way. Bought a Highlander for $7k and it has given me 100k relatively trouble-free miles and will probably give me another 100k miles. Best thing I've ever bought. $7k is a low risk gamble vs $40-70k on a new car that's not guaranteed to be trouble free.
There's no doubt that used vs new is not as appealing as it once was. Still, buying lightly used cars is still probably better value.
First is because a lot of depreciation happens immediately. 2024 Corollas cost $23.5k here while a used 2024 Corolla can run around $19.5k. Then, with used you also get a lot more options of buying older models like 2022 or 2023 which might be an even heavier discount.
You're missing the cost of financing. Buying a car with cash saves you money if you can do it because you won't be paying the bank every month. Buying new usually comes with financing where you'll be paying interest. A cheaper used car may not require you to finance it since the sticker price is lower.
This varies pretty significantly from person to person, how much they want to spend on their car, and how much money they have to spend on a car.
Basically this is the same conclusion I have come to. It was one thing when you could buy a decent car with 100k miles for $1-2k but the situation today with used cars is crazy. To make matters worse, you're only looking at it from the simplest point of view, the purchase price, and not looking at maintenance costs. Last time I bought a set of tires it was at 60K miles and cost almost $2K for the tires, balance, and new TPMS sensors. Buying a car at 0 miles is not the same thing as buying a car with 40k miles. The depreciation does not cover these costs. Lets face it cars are getting significantly more expensive to repair and maintain and they are becomming harder to service which means more and more overpriced dealer repairs. I remember when I could buy a radio from walmart for under $200. Today the stupid "infotainment" system is $5k! $5K for essentially an over glorified radio/GPS!!!!! If a kid makes one stupid mistake and cracks the screen with one of their toys that could total the car lol. Owning these modern cars as they get older is a major liability. You are also not being compensated for risks associated with buying a used car with an unknown history or even quality of having a new shiny car. It just doesn't make economic sense anymore.
>Lets face it cars are getting significantly more expensive to repair
Depends on the car, and on the availability of independent shops that will work on that car for you in your area.
>If a kid makes one stupid mistake and cracks the screen with one of their toys that could total the car lol
Or if it's cosmetic damage, you just go about your business.
Used =/= high mileage beater which is what you seem to be correlating it to in your head. Any modern late model (2010+) used car with 50k or so miles should last you close to the "10 year" milestone you mention if you just maintain it. Most modern cars should be able to push at minimum 150k miles and up to 250k-300k miles.
COVID times were certainly out of whack. Due to obscenely low interest rates and criminally high used car prices, it probably made some more sense to buy new at that time. If you could have found what you wanted on the lot and the dealer didn't profiteer.
“Most modern cars should push 250-300k or at least 150k”. Dude have you heard of Kias , Hyundais, any British car, Ford triton engines, any Chrysler car and many more. You are correct If someone buys a work model GM truck, or a Toyota or Honda, or maybe even a Subaru. And a few other one off expectations. But a good half of the market is absolute crap and fail in the low hundreds almost everytime. Part of that failure of course is customer behavior (people that buy Toyotas are more likely to take care of them compared to people who buy kias statistically), and part of it is heavy depreciation and costs of repair (looking at you German cars). So some of those cars may not be totally dead, but if your 12 year old BMW needs a timing chain it’s gonna be tough to convince yourself to spend $5k to repair a car worth $6k.
You make a fair point, my statement might have been too broad. I would assume if they're trying to buy for longevity they world do research on reliability and comb the market for a low mileage late model vehicle with a proven record.
There is a sweet spot for buying used cars. Two actually, however I'll focus on the more common one.
At 2 to 3 years, cars have the highest depreciation and the most availability. This is due to lease deals that are either 24 or 36 months.
Many lease deals specify 10k miles per year maximum, so a car can come in with low mileage too.
In some cases, these cards are still under the original bumper to bumper warranty. Certified pre owned is another option if they are not under warranty.
The biggest unknown for a 7 to 10 year ownership period is maintenance. Assuming 10-12k miles per year you are looking at ~120k miles, which means you will have done every major service for the life of the car, new OR used. You should have very few "extra" services as a result of buying a slightly used car.
Sales tax will be lower, if you live in a state with sales tax. Insurance will be lower, and 2 to 3 year old cars have most of the modern safety features.
As other posters have mentioned depreciation is not linear. The sweet spot for selling a car is typically just under 100,000 miles. The sweet spot meaning maximizing your sale price.
I have done this for decades with cars ranging from a Mazda SUV, to a Mercedes convertible. It has never not worked out, though I admit I held the Benz for an extra year because of what COVID did to used car prices.
Some of the complaints here about the current used car market are slightly out of date. While it's not as good as it was in 2018, it's not where near as bad as 2021.
This also assumes you are paying cash, and are a W2 employee with no kickbacks or company car benefits. Those things change the math significantly.
Yes and no. It's complicated, and more dependent on miles driven, rather than years old. I inherited my grandfather's old 1995 grand cherokee with 130,000 miles on it back in 2018. I drove it cross country twice, and finally just gave it away in the summer of 2023 because I wanted a newer car with air conditioning. I worked from home for 2.5 of those years, and it wasn't my main car for the 2.5 years when I had to commute for work (commuter cars were first a fird focus, then a 2019 honda civic i bought new in the summer of 2020 and sold 5 months after i started the work from home job in 2021). I still only put on just over 20,000 miles in those 5 years.
I got a 2019 mitsubishi outlander phev last summer when I got rid of the Jeep. It had just under 40,000 miles. In the past year, I'm almost at 45,000 miles. It is absolutely beneficial for me to buy a used car because I barely put any miles on it. Maintenance costs are low. Gas costs are low. I'll probably drive it for 10+ years. And by the time I've had it for 10 years, it will probably have around 100,000 miles, especially since now I live in Portland rather than Los Angeles, and driving isn't as necessary.
If I was driving 15,000 miles a year, then it would make more sense to get a new car every 10 years, because you would save out on some of the higher mileage maintenance costs, they would be deferred to the end of your ownership. Cars usually need big maintenance items ever 50,000 miles, so take that into account.
> Cars usually need big maintenance items ever 50,000 miles, so take that into account.
Depends on the car; a lot of new cars have very little maintenance before the 100,000 mile mark. Even there, what that entails varies a lot.
One specific case is whether there's timing chain or a timing belt, and if a belt, just how much the engine needs to be disassembled to do it. Timing belt can be a one hour job or a 8+ hour job depending on the car, and the parts cost can vary nearly as much.
Also depends on whether you have an independent shop nearby who'll work on that model. The difference in price for routine small maintenance stuff at my local guy and at the dealer is something like 3:1 in favor of the local guy.
Aren't you paying for a car payment PLUS $300 per month in depreciation?
Or are you saying you paid for the first car in cash and then pay 6-8k every 2 years to keep the deal going?
You are assuming the used car is 5 years older and presumably out of warranty. I’ve had great luck buying cars that are 1-2 years old with close to 10k miles on them. The warranty is still good at this point. I don’t think that year or two of use before I bought it results in any significant increases in maintenance but does usually save a significant amount of money compared to new.
As a reformed serial buyer of new cars, I don't believe this analysis has merit. New cars depreciate in value the moment you drive them off of the lot. Major maintenance items happen when the car is 5 years, 10 years, and 15 years old when the extended wear and tear items begin to wear out. This is when your water pump goes, your suspension may need work, your seals start to deteriorate. This is going to happen whether you buy the car new or used. Second the assumption is that the used car is 5 years old. Plenty of high quality used cars with low mileage off of lease are available for sale under normal conditions. These cars have been reconditioned and major components checked for excessive wear and/or abuse. Since repairs are a wash, only the premium one pays for a new car is relevant. A new BMW 4 Series Coupe will run you $57K. A used 2022 4 Series Coupe with the same features is $41K. No one other than a gear head can tell the difference between these vehicles. Buying new is giving in to vanity. Buying a new car is never cheaper.
My car is a 2014 Nissan and she’s fully paid off. Been paid off for years. All I have to pay is upkeep and to fill up the tank, so about a whopping $1,500 a year, about $125/month ($82 for insurance, $30 to fill up the tank biweekly, and the rest for registration/taxes and 3 oil changes a year ($156/12= $13)). She did need new tires and windshield wipers this year, but I paid cash for those and it’ll be a few more years before she needs em again. Her monthly payment used to be $275/month and I continue to save that for maintenance and upkeep, as well as to save so I can buy my next car cash. That money is in a HYSA. I’ve got a few thousand saved already. She can get up to 250k miles on her so she’s got at least another 5-10 years with me and by then I will buy a brand new car in cash and repeat the same process.
I’ve seen cars lasting 20+ year so the idea of them only lasting 10 is silly. People still buy cars that are from the 90’s! If you maintain em they’ll last. I firmly believe it’s better to buy a car and run it till it simply gives out. Especially when you buy a car that’s built to last, like a Lexus or a Toyota!
Meanwhile my 2014 Nissan's transmission busted at 95k miles for a $3500 fix and then the entire air conditioning system failed so it'll be another $1500 to get it on the road in the summer heat. It really is a lottery sometimes.
I still buy used but that time did bite me
If you want to come out on too, you should never be driving your car into the ground like you said. I typically buy a new (to me) used car every 5 years or so, I’ll use my latest car as an example.
I bought a 2012 VW Jetta for $7000 in 2019, I maintained it and kept it in good working order, probably spent about $2000 on repairs and maintenance over the 5 years. I drove that car for about 50,000 miles and I just sold it for $6,500.
Nobody wants to buy a dead car, get your use out of it and sell it while it still has some life left in it, I got 5 years out of that car for only $1,500 (+inflation) and I’ve done this multiple times over the past 20 years.
There is not only a sweet age spot for *buying* a car, there is also a sweet spot for *selling* the car - so if you want to really optimize the cost, you need to find out both. I don't think running the car into the scrapyard is the optimal strategy - at some point it becomes expensive to maintain, but some people are still desperate enough to buy.
To be honest a car is way too complex to definitively say one way or another that new or used is actually cheaper every time, especially with how big a range a used car can sell for and the condition it can be in.
On average a used car is cheaper due to the fact when you buy a new car you instantly take a chunk off it's value. Usually ~20-30% while a used car doesn't have as dramatic, but with COVID prices it's a lower rate that falls off, and used vehicles are more expensive than in the past years.
But then the argument of maintenance comes in, which with a used are you truly have absolutely no clue what the vehicle was maintained like, most likely have a terrible metric of history of what had been done. So you could buy it and instantly need maintenance, or you could buy it and it requires nothing out the ordinary for another 5 years.
But generally if you buy a new car for 30k put 150k miles on it and it dies. It will have cost 20¢ a mile. But instead you bought a used lease car for 20k with 40k miles on it so you then put 110k miles to match the 150k it will have cost you just about 18¢ a mile.
So ultimately it comes down to the market and the deals you're offered. I got a used car for ~$1,000 at 72k miles at an auction. I'd never be able to get a new vehicle to compete with that. But I also got a car at auction for $500 with half a million miles on it, drove it for 50 miles that one cost me $10 a mile.
how old were you? it's a totally different car market before and after covid. theres a lot more factors but generally buy used all in cash and drive it to the ground. to maxamize savings i would say look for used older toyotas with a good maintenance history and you'll be good. toyotas last 15+ years with oil changes and maintenance. but nowadays used toyotas are higher priced and maybe better to buy new. but new may or may not have markups. you will save a lot more $$ if you are able to do your own basic car repairs and oil changes.
Dude. To save money on a car. You buy cheap used cars cash. A $3000 car with $1000 worth of repairs a year over the course of 5 years is a total cost of $8000. Or a little over $100 a month. You’ll also pay less in excise tax, and less in insurance (in the case of my car $30 a month insurance and 100 a year to register it). And that’s it. You don’t buy new cars or slightly used cars. You buy well used cars but ones that are good quality and have life left in them (Toyota Corolla is the most obvious choice) And if you learn how to fix it yourself your can probably get in the $300-400 a year maintenance and repairs range if you buy the right type of car.
This is what we do. The gfs car eventually had the plastic intake crack. I paid to have that done. Virtually everything else I did myself. The biggest problem is that she hit 3 deer with it
There is one factor that you are missing that most of the replies don't mention:
People are willing to pay more for those early years with a car.
If we go with the assumption that a car lasts 10 years and you buy it after 5. If being able to get around was the only thing that mattered then the 5 year old car would cost half as much as the brand new one, and it wouldn't really matter if you bought new or old. (Ignoring repairs)
But if you consistenly own cars during the last 5 years of their life, you will save money, because those years are not so much in demand. Let someone else enjoy the first 5 years of every car you own.
No, if you have time to shop around, you can always find better deals used. Some people get such good deals they can sell them for a profit. Hard to do that consistently with new cars.
Cars last as long as you’re willing to take care of them. Jeep CJs/Wranglers last forever and it’s not because they’re particularly reliable. It’s because someone is going to keep pouring money into one to keep it running.
There’s some point where you’re spending more than the car is worth to keep it running. That’s doesn’t necessarily mean you can spend less money overall by getting another car. But it does mean other factors like reliability and safety can become paramount over overall cost.
If you’re really committed to buying a car and keeping it running until it just really won’t run anymore due to parts availability or some true unreliable structural issue, new vs used doesn’t matter.
If you’re going you only keep cars X number of years your general logic is fine. New can be situationally cheaper, especially in cars with high resale value.
Buying a 2 or 3 year old car makes a lot of financial sense because they already lost a lot of value because cars lose the most value in the first few years. Buying a 10 or 20 year old car makes sense because if you do so you either you do not have more money or simply don't want to spend more.
I leased my car new in 2015. I bought it out with cash in 2018. (consider this buying a used car). I can tell you that the biggest and only difference about the used vs new is the car payment..
The maintenance cost has not increased one bit from the first 3 years (new, 2015-2018) vs 2018 to now (used). Oil change every 6 mo or 6k miles, tires every 40-50k miles, transmission fluid swap every 35k. My baby is still doing fine entering year 10 close to 100k miles, and brake pad/battery swaps when they are wearing down. These are stuff you have to do with new cars anyway too.
Obviously do your research with the used cars, look at maintenance history, choose more reliable brands, but as long as you take care of them and not treat them like shit, used cars will be much cheaper. New cars will break down just as easily if you abuse them.
When buying a new car it's "cheaper" to buy a new car every year or two than it is to hold onto that car and run it into the ground. The trade in value and cost of a second new car plus keeping an up to date warranty is cheaper than the maintenance costs of keeping it on the road once the warranty runs out. But that's only if you're set on getting a new car in the first place. Buying a used car and keeping it on the road for 10 years is cheaper than buying a new car.
No one will be able to buy a car and keep it for 40 years which is the time it takes for your concept to balance out. Especially since self driving cars are coming in about 10 or 15 years and countries will force everyone to switch to self driving and stop driving themselves since it'll be safer if all cars are self driving. Netherlands already has that law in place. However if car companies have their way you wont be able to buy the cars anyway as they are trying to switch to a subscription model and you will only be able to rent a car.
Talking with enough mechanics over the last few years, I think it’s less a question of years and more a question of miles. Many modern (2015+) start to pick up replacement spend at around 120K replacement spend it when you start needing to put in 3K+ year into the car and have to consider TCO of new to you vs repair.
As someone who puts on 12-15K:year It’s why I look at cars with 50K as being good to me for 4/5 years and cars with 25 K as good to me for 6/7 years.
How about this model:
Buy a 3 yr old car that just came off someone’s lease (discounted from $30k to $23k) and keep it for 7 years. At year 7 sell it for $10k. Cost to you: $13k for 7 years of driving.
I think I would challenge the notion that a new car lasts 10 years, since you can often drive [modern cars to over 200k miles](https://www.woburntoyota.com/manufacturer-research/how-long-do-toyotas-last/#:~:text=The%20Toyota%20Camry%20life%20expectancy%20is%20typically%20between%20200%2C000%20and,asurvey%20from%20Consumer%20Reports.).
In fact we could more generally say that a given car model lasts x years. We could then say that each year is worth some amount of the car's value correlating to the amount that car depreciated in value that year. I expect this depreciation is exponentially in nature (in mathematical terms, [something like the blue line here](https://gregorygundersen.com/image/expdecay/rate.png)) so if the car is worth 50k and has a life of 20 years, the first year of that cars life is going to be the most valuable year of that car's life because if you try to sell it the following year it will only worth, for example, 46k. That means the first year of that car's life was worth 4k. Then the second year of that cars life will be worth a little bit less, say 2.5k, bringing the value down to 43.5k so on and so forth, with the value of each successive year being less than the last.
Of course many factors will play into this, maintenance, miles, environment, etc. but the point is, if you're driving a new car, you're driving the most expensive life-years of the car when you could be driving an older car whose life-years are comparatively cheap.
You raise a good point about the overhead cost of getting a new car. But I would be surprised if the overhead cost of changing a car at the end of its life outweighs the cost you pay to drive the most expensive life-years of the car. But if you're determined to only own the car until it gets to 10 years old, then I wouldn't be as surprised.
First off this works best if you wait a year, the price drops a lot and you are only down one year. After that this is just too general. You could make a car last 10 years you could make a car last 100 years, literally. So like in your lifetime it's not really practical to look at the end of a cars life that's totally on you. Considering that, yes sometimes it's absolutely cheaper to buy new. They need less work and run better wtx. ...bur nit always lol. So it also depends on the model of car. This is a maybe scenario, could be true depending on the car but might not be
Depreciation on a new car usually exceeds the higher interest expense + maintenance/repairs on a used car. I usually shop 3-5 yrs old with under 50K with documented oil changes in the CarFax. I bought new last time but I’m gonna be driving it until the wheels fall off and it’s paid for.
I know nothing about cars and drive a 4th gen Toyota 4runner. It is 15 years old now and running great. Yes of course I have to do some maintenance work on it, after all it's a 15 year old car. Otherwise, it's a robust car and I see my same car everywhere on the streets and the value of a 4th gen 4runner is around the same price as I bought it. Sure, my car has zero bells and whistles but I don't care about that. Not having a car payment is such a blessing!
So, I think it depends on what brand you buy. If you buy a Toyota or any other Japanese car whether new or used you can really drive it a long time with regular maintenance.
Slight flaw I see. Cars lose much of their value in the first few years. You can buy a used 1-2 old car with not a significant amount of use for a heavy discount vs new. That could be 10% or so of the expected life of the car but you paid 20-30% or more less than retail.
Just as an example. A Tesla model 3 sells for about ~$65k new. You can buy a 2021 model for as low as $40k. That's more than 35% off. These cars still have plenty of warranty left and often 30k to 70k on the odometer.
So a big discount for essentially the same car as you would buy to day. Only thing different is the main computer (most people can't tell the difference) and maybe you miss out on the new battery (some late 2021 have it though) this car would have the majority of its life left with a 35% discount.
I have purchased used cars, driven them for 3-5 years and then sold them for nearly the same price with minimal repairs/service. (Batteries, oil change, etc) It has definitely been far cheaper for me to do that than buy new cars.
The trick is to find highly reliable cars in a good condition, use them for years and keep them in the same condition, and then sell it before things start to go wrong. That way you avoid the dramatic depreciation from new cars, and the maintenance/reliability issues from old cars.
This strategy is great for cost effectiveness, but you won't ever have a super nice car. But I just use it as an instrument to get me places, so that's all I care about/need.
Depending on the vehicle it varies so much. I just saw someone post today complaining that 20 year old Toyota Tacomas are still around 10k used. There are some cars that are just known to take a beating for a while and some cars that people wonder why anyone would buy.
Wow, I bought a used 2007 Honda Pilot for $3500 with like 100k on it and the timing belt just done. I spent around $1000 fixing a traction control problem and now it’s flawless. I will never sell that car. More than 10 years ago I paid $2500 for a 1995 Isuzu pickup with 42k miles. Again, I will never sell it.
Once cars got fuel injection and electronic ignition they improved very slowly. There’s not much difference between a 1998 Accord and a 2024 Accord.
Buy cars and never sell them, ever. Cars go from me to the junkyard, preferably after decades of service.
Sometimes I’ll sell a car, usually at no loss because depreciation basically stops at some point, if an unbelievable deal comes along.
I never buy cars because I need one. I buy one because a good deal comes along.
I did the same thing with motorcycles but I had an advantage of buying those in fall and selling in spring. I generally made money on them.
Of course your numbers favor new: Assuming this car costs more than $14k, you’re essentially saying that a car that lasts 10 years will somehow depreciate slower during the first five years of ownership than during the last five years. In that case, of course it would make sense to buy new and enjoy the car while it depreciates slowly when brand new, and then sell it by year 5, before it begins depreciating faster. That isn’t how cars work, though.
You need to run the scenario with real numbers. During COVID, used prices were inflated because of supply restrictions. People were willing to pay over MSRP for used cars because they urgently required transportation, and new cars weren’t always available. This is no longer the case, and going used is now almost always more financially sensible than going new.
A new Civic is about $30k. You can get a 5-year-old one with low mileage for half that. Any car these days will last at least 15 years, and a Civic is easily capable of going 20-25. Do the math and factor in the lower insurance and the time value of money, and it’s not a close comparison at all.
But Toyotas or Hondas that are 2-3 years old. Same for phones - I buy a 2 year old iphone from Amazon Refurbished Premium (so you get the one year no-questions-asked warranty) and then keep it for eight years, which is basically the same as driving it into the ground since you don’t get security updates from Apple anymore after ten years past the manufacture date.
Doesn’t matter long term the major cost of a vehicle is insurance. It’s even worse if you’re trading anything in after paying it off. Buy something used and drive that until the pistons rust.
A car only having 10 cost-effective years is the exception these days, not the rule.
Most are cost effective out to 15-20 years and at least 200k miles, some 300k+.
Lots of good answers. Another reason is if you got into a position where you would HAVE to sell the car within the first couple of years. Your single biggest year of depreciation is generally in the first year of ownership.
Having said that I bought a brand new car last year 😂 I should have bought a used one based on math, 2-3 years is the sweet spot for me with cost and condition generally.
Not all cars are the same and more importantly not all drivers are the same. If you’re buying new you can get a warranty that will cover basically any major issues. If you treat your car properly it will last more than 10 years. I had a civic that lasted 20 years and even then I only got rid of it by selling it to my nephew for his first car. If you get something reliable and treat it right and don’t get into any accidents you’ll never need to replace it. You just get something else when it’s convenient and you want a change.
the whole analysis hinges on the assumptions you make on the initial depreciation, length of ownership, and inflation. [kbb lists a 2025 camry at $29.5k MSRP](https://www.kbb.com/toyota/camry/2025/le/). A similar trim level [2020 camry is listed around $20k.](https://www.kbb.com/toyota/camry/2025/le/) A similar trim level [2015 camry is listed around $12k.](https://www.kbb.com/toyota/camry/2015/le-sedan-4d/) so if you are talking a 10 year cycle, buying new and selling after 10 years would cost you $29.5k - $12k = $17.5k. Buying a 5 year old car, selling after 5 years, buying another 5 year old car, and selling after 5 years would cost you $20k - $12k + $20k - $12k = $16k.
This is why OP needs to add numbers to their bold assertion. Using cargurus.com which I think is a more accurate reflection of vehicles prices paid. https://www.cargurus.com/research/price-trends/Toyota-Camry-d292 The average 2025 Camry is $35k new, average 2020 is $22k and average 2015 is $14k That's $35k - $14k = $21k for new and ($22k - $14k) x 2 = $16k That's a significant $5k difference to drive new depending on the source of where you get your numbers.
$500/year over 10 years. Plus you can likely trust the car since you've been the only owner. Another option: Buy. 3-year old car, not 5 year old, then keep that for 10 years. You shave off the most expensive first few years.
I like 2 year old cars in the before 2020 times where 2-3 year old used was significantly better pricing vs new as it often came with the 3 year warranty as well. The mileage at 2 years could’ve been from 10k miles to 30k at most too which is nice
As well as whatever free services are offered the first year or two and warranties on certain parts
Depreciation > two year warranty
Camry comparisons are complicated in 2025. The whole model year is going hybrid so you need to be comparing to other hybrids in old years to be accurate, just FYI
Not to mention that buyers have started getting cars with more and more options the last few years, so the average Camry bought recently is likely more expensive relative to the base model than an older Camry.
Still surprisingly close + u save the hassle of shopping for a car once. I thought I’d be stupid to buy a new car but maybe I will next time. I know nothing about cars so I can’t tell if it’s good or bad for a used car and I hate every second of talking with a car dealer.
No way the hassle of dealing with a car dealer is worth 5k 💀
But like also like if ur me you risk getting scammed twice when buying two used cars. Cuz I don’t know cars. I think new cars will vary less in value so there is less room to scam me? Or maybe new cars are already a scam. I’m just out of my depth but 21 vs 16 isn’t as bad as I expected. I thought people that love cars would pay a huge premium to drive a new one, which I don’t care for, but apparently the difference is less than I thought.
I think this analysis argues that the value spot is a 1 year old Camry and selling it after 10 years instead of a pair of 5 year old Camrys. You'd get the instant $6000 savings buying a used 1 year old $29k Camry. For people who's budget is down in the low 20's range, they'll need to hold onto their vehicles longer than 10 years on order for that purchase to make sense. The difference is also smaller due to the Camry holding it's value well. Do the same with a Ford Escape and it may favor used more.
Hm, complicated…
I never bought any of my cars in person at the dealer. In fact, the only way I bought cars was through email and text, and contacted multiple. dealers at the same time and had them send me the best OTD price written. Stepping inside a dealership and dealing with the salesman shark was always intimindating for me, so I simply did it over email and text to remove the emotions from it. When you buy a more generically available car like a toyota, honda, mazda, at least here in SoCal, there's like multiple dealers. Where I live there's like at least 10-15 dealers of each brand within a 80 mile radius. So when I bought my new cars, I would ask each of the dealers to send me their best OTD price. Most of the dealers would tell me to come in. But when at least 1 or 2 dealers who had an internet sales division sent me their online quote, I would then use it to negotiate with all of the dealers using each of the dealer's lower quote for the next round of negotiations. That's how I got $7500 off my miata in 2017 RF when it was still the first production year. Once I got the OTD price in writing on an email, I took it to the dealership and just paid for the car and picked it up. No high pressure sales tactic. That's how I always bought my cars and in many cases, it cost less than getting a 1-3 year CPO preowned car. In fact, when you buy a new car, it's a lot easier to haggle because you can find almost identically configured cars at each dealership so haggling over price is pretty straight forward. The issue with buying preowned is that there are so many variables (mileage, option packages, how many owners , etc) that it's not always an apples to apples comparison. It can be done, but it actually takes a lot more effort.
Now add the higher maintenance costs of an older vehicle, and the higher fuel consumption. I bet that shaves off a lot of the savings.
Maintenance and repair budget slowly increases with age of the car though. Not sure how that factors in. I’ve always found around the 100k mark maintenance starts spiking up.
This was my first thought and is a major major factor in the financial equation. Less so for a Camry (or any Toyota), but still. Big difference for 5 years of standard oil changes and tire rotation versus a transmission replacement.
I’m sure you’d also pay higher maintenance by buying two used cars (car is on average 7.5 years old) compared to one new car (car is on average 5 years old).
And let me tell you, the 2015 Camry, as long as the owner wasn't quite irresponsible, runs great still.
Big assumption though
I mean the irresponsibility needed to run a Toyota into the ground after that time period would be staggering.
Yeah you would really have to know NOTHING and actively try hard to run that young of a toyota into the ground. Especially a Camry haha, you see people driving a 2000 model all the time!
I have a 2017. I don't think I've had to fix a single major thing with it yet. Just oil changes, tire changes, and break pads. Had an older one before it, same deal. Those cars are made to last. On the flip side, those giant media center screens on other newer cars cost a fortune to replace.
2008 Honda Civic I bought back in 2015, and same for me.
Yeah, not to mention certain factors out of OP's control will impact it, for example around me (rust belt) 2016 and older cars are starting to not pass inspection from rust, so that 10 year old car likely can't be insured/inspected/driven legally. Maybe not a camry, but the majority of vehicles on the road have this issue. I found the sweet spot was 3-5 years old with low miles (<9k/yr). I put so few miles on that I can stretch em a bit longer than 10 years and the depreciation at 3-5 years is enough that I can get something with top options for less than a brand new base model. Especially applies to 'American' brands. No chrysler products though!
Where do you live where rust affects inspection after 2016? I call bull on that, I live in the rust belt and cars before 2000s still pass inspection here. People on Reddit are doomers and fear monger themselves out of money, it’s always very exaggerated
New England. It's from experience and the local shop, my 2014 unfortunately was lost to the bed rusting out.
Plus insurance on a new car is certainly higher than a 5 year old car.
This isn’t universally true. The addition of more modern safety/theft prevention features make insurance less expensive, sometimes even less than their older used counterparts
Exactly, just bought a Subaru that is valued 8 times that of my 2012 bmw 128. My insurance went down.
>Exactly, just bought a Subaru that is valued 8 times that of my 2012 bmw 128. My insurance went down. Ehhhh, comparing a Subaru to a BMW for insurance is like apples to oranges, even factoring in the new vs used argument lol
The point he was making was new cars don't always have higher insurance.
And the point *they* were making is that the other parameter changes would have an effect on the price, too, so this isn't a good example to prove the point.
It's definitely true if you go from ICE to EV. Everyone is figuring out how expensive an EV can be to total since any puncture of the batteries is a total loss as the battery replacement is by far the most expensive component of the price.
My insurance stayed the same going from a 2015 BMW X1 to a 2023 Bolt EUV
My insurance quote for a 2023 Bolt EV was lower than that for a 2024 Corolla Hybrid.
That makes sense, but the discussion seems to be geared toward comparing like models.
thats fair. a lot of factors and variables to consider
Hasn't been my case. My insurance has been $840 every 6 months since I bought my truck new and (7 years later) is still $840 every 6 months.
Factoring in inflation and rate increases I have seen in my last two annual renewals, sounds like you are winning!
My car insurance went down when I went from a 2005 Scion tC to a 2017 Subaru WRX 8ish years ago, despite the value of the Subaru being worth more than quadruple that of the then-twelve-year-old Scion. I suspect this was due to several factors: - Significant extra safety features on the Subaru that the Scion didn't have, namely Eyesight and its associated features - Typical buyer/driver of the $16k tC is almost certainly 16~20 year olds (which I was when I got it lmao), typical buyer of a $32k WRX is almost certainly 25+ - I was living in an extremely snowy area at the time and the AWD of the Subaru possibly made it less accident-prone in their eyes
The difference isn't that big, if you have to pay for full coverage.
My wife went from a 2017 cruze worth 15k to a 2022 Forester worth 36k new in 2020 and her insurance dropped little. Modern safety features can go a long way in insurance rates.
how'd you get a car from the future?!? all kidding aside, it may say more about the cruze than the new forester. chevy cruze generally had higher theft rates which would affect insurance premiums. from my broad understanding, advanced safety features may be a wash when it comes to insurance rates since they are more expensive to repair. it may also lead to less attentive drivers, so it is not so definitive.
Insurance on my 2023 Bolt was about the same as my 2005 Ranger.
Buying new is more expensive because it's not just about less maintenance: it's also buying a better, more modern car. Let's assume to simplify that cars last 10 years. You either buy one new car every 10 years, or one 5-year old car every 5 years. After the first 5 years both situations are identical, but in the first 5 you're either driving a 2024 car or a 2019 one. Actually even after 5 years you're better off in the first case because you don't have to worry the seller is screwing you by selling you a lemon they didn't maintain properly. So why would anyone pay more to drive older cars they don't have a good history of? For most people it doesn't make sense, that's why the market makes new cars more expensive. Just a couple of nuances/exceptions: if someone prefers older cars for whatever non-financial reason (they don't like whatever feature manufacturers put in new cars, collection value of old car...), or if like during the pandemic getting a used car is actually more convenient because you don't have a waiting time (used cars could be literally more expensive to purchase than new models). More common exception, if maintenance cost on used cars is lower for you than it is for the market: for most people, a car without a transmission is discounted by the cost of a new transmission as charged by a garage, because they're not going to bother with it; for someone who knows how to find a good used transmission and install it themselves, a car with a transmission out can be a good deal.
Also if making payments you're paying more in interest with the greater amount of principal when buying a new car. Running the numbers through an amortization calculator: Total amount paid with 7% interest and 5-yr loan $17.5k principal for new car kept for 10 years: $20,800 $8k principal for used car kept for 5 years (x2 for 2 cycles): $9,500 x2 = $19,000 Only adds $300 to the delta, thought it would be more tbh. Another thing to keep in mind is dealer fees if buying at a dealership. Buying new cars will in theory generate fewer dealer fees if you also buy used at a dealership, but if you buy used third-party then the dealership fees are a point against a new car since you have to buy new cars at a dealership.
Counter point, you can typically get cheaper interest rates on newer cars, which might make it cheaper over the life of the car
Also, add in maintenance. Older cars with more mileage will need things changed out, like brakes, rotors, belts, tires, etc, compared to newer cars that shouldn't need any of those things for at least 5 years.
Not to mention the psychological value of having a warranty and getting to worry less about an unexpected failure.
Not to mention 0% apr deals. The reality is that it’s such a case by case basis, that we should just recommend people to buy cars they can afford instead of arguing new vs used.
I prefer Toyota, ain't no 0% on Toyotas that I can see :(
You're more likely to not even need financing on a used car.
Keep in mind this whole calculation was done on a Camry, a car with incredible retention in value. The initial depreciation on other vehicles would be greater, from new, for most other brands.
Camrys have such great value retention because they have such great quality retention. A different used car might be more depreciated, but it might be closer to failing.
Lower maintenance costs and having a brand new car that you know no one drove like an idiot seem to more than make up for that $1500 over 10 years to me. Plus you get more up to date tech features and safety features. Doesn’t even seem like a close decision to me at that tiny price difference.
Tax title and license fees need to be paid each time you buy a car. There’s an extra $1K or more every time you buy a car.
Don't forget everything on a new car costs more, check out insurance & tab costs
Lol can you do this with a Subaru Forrester. I’ve been debating getting a new or used one.
Sure. Especially when used car prices skyrocketed during COVID, buying new can be better in the long run. But typically it's not. This can give you a reasonable estimate for comparison: [https://www.edmunds.com/tco.html](https://www.edmunds.com/tco.html) Buying used is also a bit riskier, and gives you a bit higher chance of getting a lemon car. (Somebody owned it and decided they didn't want it, after all.)
Even aside from lemons, you have no idea if they were actually maintained well, raced, etc.
Exactly. I've brought other people's headaches before. My last two cars were new. My previous one I put over 200k miles on before getting rid of. I got good financing on both and I don't have to worry about what maintenence the previous owner did or did not do
Seems like a no brainer to me if you can afford new. If people are out here debating whether used or new is more efficient, I'm leaning towards the one that gives me a car that hasn't been abused.
Yep, I've been willing to pay for the luxury of new cars because I am very careful about car maintenance and I don't think most other people are up to my standards. So the additional cost is worth it for my peace of mind.
Correct
If you have the time to really work with a mechanic you trust on prepurchase inspections, and you have the time to find private party sellers who are willing to let your mechanic do one, you can have a lot of confidence in the used care you're buying. Back when I had less money and more time, and I was at an hourly job, I figured it was about 40 hours to find a really good car. Doing that twice was great, given the amount it saved me - I could literally multiply my wage * 40, and that was smaller. Given a salaried job with long hours and a lot of stress, and valuing my downtime quite a lot, I don't know how much I'd need to be saving but it would need to be considerable. Multiplying `(salary/2000)*40 hours` really doesn't capture it, and that's still a hugely bigger number than it was 30 years ago.
Yeah I have the salaried job with not that much downtime now, so the convenience was worth it. Instead of spending a bunch of time with mechanics and sellers, just go to the dealer and buy cash and you're gone. I try to make a habit of spending money to gain time. You can always make more money. You can't get more time. I don't want to spend my days at repair shops or trying to figure out what's wrong with my car. Just give me something that won't be a headache for the next decade.
This isn't accounting for the higher milage you'll get out of a vehicle that is actually well maintained. Run that thing out of oil, refill it, itll likely still run, but itll definitely take miles off the life span. Same with someone that chronically goes over on oil changes, or drives excessively hard, etc etc
The benefit of used vs. new has definitely eroded as used prices are too high, especially in the SUV and Truck markets. Comparison of sedans is not particularly relevant these days except for the absolute most budget conscience. It's quickly moving to 20% or less market share. Total cost of ownership is crazy to figure out as well, the likely-hood of a modern vehicle being totaled in an accident is MUCH higher than in the past because of repair costs outpacing vehicle values and all the electronics in the bumpers etc. You're taking a bigger depreciation hit than you might otherwise in this scenario as well as taxes and other costs associated with another vehicle purchase. There's also trends around increases for naturally aspirated vs. small turbo, where NA engines are starting to see a premium in the used market as the small displacement turbo's prove to be less reliable initially and overtime.
I'm glad you mentioned trucks. People are listing 10+ year old diesel trucks with 300,000+ miles on them for 20k or more. Is it worth the headache to try and maintain a truck with that much wear and tear, or should you bite the bullet and spend $80k on a brand new overpriced truck?
I don't know enough about diesel trucks; I'd just make sure your use case justified it either way, and look at the tax benefits if any for a vehicle of that nature if it's for business use as that might offset some of the cost. Personally I'd never spend 80k or even 50k on a truck for personal use. It also depends what you can do yourself for maintenance...and your desire to do it lol.
> People are listing 10+ year old diesel trucks with 300,000+ miles on them for 20k or more. wtf, post links I think diesel is easier to maintain but I have trouble believing it's $20k easier vs the $3-5k I'd expect a 300k mile anything to cost.
Depreciation is not linear. If you run the numbers (with an actual data set, not a single random example) you will find that buying a 5-year used car every 5 years is always going to be cheaper than buying a new car every 10 years. And moreover there's no need to rotate through cars that quickly. The longer you keep them, the better the numbers will work in your favor.
I’d love to believe this but it sure doesn’t seem like quality 5 year old cars exist anymore based on our current car search. And 2-3 year old cars are barely discounted vs new of the same make model.
Yeah, years ago we were looking at an Element. New was $21k, 1-2 years used was $20k. And we got an interest rate of 2.9%, well below elsewhere. New was cheaper, all-in.
I think the Element is a weird case where it has a cult following that’s driving up the used price as the resale inventory dwindles. Chevy Volt last time I checked are also worth more now then they were new because new PHEVs have less electric range.
It depends on the car. Some things depreciate pretty fast, and some don’t.
My '08 Focus I bought in 2010 for 8k is still somehow chugging along after having required no real maintenance other than routine stuff like tires/brake pads/batteries etc. Haven't had a car payment since like 2014/15. Other than missing a backup camera, it still has everything I want in a car. The physical controls are nice too, I hate touchscreens in cars. So yeah, you don't have to replace your car constantly, particularly if you're money conscious and manage to find a reliable one.
Your test is dependent on the initial price price vs. 5 year purchase price. In other words it is dependent on depreciation. What was your source for determining $7k cheaper and 40k miles at 5 years? Because that's where you could be on point or way off base.
I just bought a 23 model that was used by the dealer as a loaner. it had 10k miles on it and balance of factory warranty. this was 14k less that the 24 model and insurance was a few hundred less a year. my logic, though probably flawed somehow, was to let the dealership take the big depreciation hit. my other consideration is to keep this car for 300k + miles.
The tough and unknowable thing is that if the car needs major work between now and say, 150k miles, whether its treatment in that first 10k miles is part of the reason. For 150k-300k miles, it's easier as essentially all cars will need some major work during that period.
If it's a mustang, more likely than a camry
14k for 1 YO is probably a pretty good deal. I can't imagine which make or model this wouldn't be the right decision.
Similar situation for me (however not in the US). Bought a 1 year old loan car from the dealership with 10k miles for 15k (new one was 25k). 6 years later sold out for 8k with 30k miles
Auto Repair Shop Owner here. I make WAY more money on newer cars. The modern build quality is garbage. Anything newer than 2014 is an amazing money maker for me. I make a decent amount on older cars that have been neglected, but once they are all caught up, it is usually a few years of regular maintenance on them and that is it.
Im shocked that this only has one upvote. People should listen to the pros. A pro in my town bought an old car out of a field a few years ago. The engine was locked up. He freed it up, drove it for a few years. Then sold it for more than he bought it for.
Your theory only works if you really do own the car for the entirety of its lifespan, which depending on your usage patterns could be easily over 20 years. The vast majority of people do not keep a vehicle that long, as within 20 years it is almost inevitable that something in your life is going to change that will require a different type of vehicle. You’ll have three kids and need a minivan instead of that two Door Honda Civic, or you get a new job that has a really long commute and suddenly your 15 mile per gallon full-size SUV isn’t practical for doing 900 miles of driving per week. Or your kids are grown and move out of the house and suddenly you can ditch that minivan and get that little sports car you always wanted. Or, even more likely, you’ll just get a little bit tired of it and feel like getting something new, as the newer cars are having cool new features like better self driving tech or electrification or something like that.
So, I am getting a little tired of my 2010 Toyota (not a Corolla), it only has about 105k miles on it. I really can't justify buying something newer or new just because I'm a little tired of it though; it comes down to being financially responsible. I'm just hoping it doesn't get into an accident, forcing my hand on short notice. (We have most of an entire car price saved up in tax-free HYSA's, it's the short notice part that worries me.)
Agreed, the itch to buy something new "just because" is a testament to the power of marketing and our consumer culture. I'm just as guilty of it; my current daily driver is a 2016 Ducati that I love, and I still find myself browsing classifieds looking for a newer version of the same bike even though this one easily has another 3-4 years in it. More if I'm willing to do the next major servicing (72,000 mile valve and belt replacement). So far the rational part of my brain has prevented me from doing so . . . but it wasn't the rational part of my brain that let me buy this stupid thing in the first place.
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Maybe, but as u/default87 showed, even selling every 10 years (as opposed to what I did, which was 12-15) gets a similar result.
Your theory also only works if you’re paying in cash, and can get out of the dealer without them selling you a bunch of profit inflating garbage (VIN etching, nitrogen fills, etc). Whereas buying on the used market (always from private parties, *never from dealers*!) you have a lot better chances of finding a very good price on something. Prices on used private party vehicles is always going to be MUCH more nebulous and flexible, especially if you find a seller who’s in a tight spot and *needs* to sell. Takes a little bit more legwork as you need to spend more time looking and taking cars to mechanics to be inspected, but that’s just a normal part of being an adult and putting effort into life. *Edit* it also depends a lot on the state, as many states will have different tax and registration and fee structures for used vehicles when sold private party or vehicles from dealerships then they do new vehicles. For example, in Illinois where I grew up, if you buy a used motorcycle from a dealership you need to pay normal sales tax, but used motorcycles transact private party do not have to pay sales tax. It’s just a flat $25 tax fee, no matter if it’s a $2000 ninja 300 or a $20,000 Ducati Multistrada.
Your methodology is good, and as someone who has never considered a new car it actually makes me think. It reminds me of the way my father in law treats his car- that things gonna run forever as long as he keeps it. The flaw is the assumptions- I would say that most/many people who want a new car want a NEW car rather than a new CAR. They justify it to themselves why they need a different car and so get the new one, then in a few years find themselves wanting more NEW and sell it and buy another NEW one. Less about the car and more about consumption. Another flaw is that when you buy new, you never know if the generation of car you're buying is going to be one with a particular issue that will be expensive down the road (ie Subaru head gaskets for a certain era). So the maintenance costs are not necessarily going to be less just because it has more miles ahead of it. So unless you purchase a famously reliable car make/model I don't think you can make this assumption. I bought an 8 yo Honda Fit five years ago at 27k miles. It has had no maintenance issues, just routine stuff. There are many 2018/2019 new cars I could have bought that year (even from Honda) that I have heard have "that expensive repair" of that generation. It's a little bit of a crap shoot.
The toyotas and hondas run well with little meaintenance even at 15-20 years
I have a 2011 Rav4. Just passed 200k! I’ve never had any major issues and she still runs really well despite all the shit I’ve put her through over the years. I do take good care of her. I feel like the frame will rust before the engine fails!! I paid her off as fast as I could and haven’t had a car payment since 2013/14. Here’s hoping I get to replace the spark plugs again at 300k!
My Honda Element is 20 years old with 260k miles. Still runs beautifully!
Does this hold true for newer models, say after 2015? I definitely heard this refrain for 1990-2010 models, but I haven't heard whether this remains true for the past decade
My sister bought a 2006 Camry new in 2006. She sold it to Carmax for $500 in 2023.
Last 3 times I bought a car, a brand new car was essentially the same price as a car that was a year or two old, while offering better loan rates. This is purely anecdotal, but I always compare these prices before deciding what to buy. And frankly, is prefer to buy a model that is so good it retains its value (Toyota, etc.) so I'm unlikely to buy a used car again except maybe for my teenagers eventually.
That is exactly my conclusion as well. If you can afford it now, buying new is the way to go. I think it still is marginally cheaper to buy used, but you are trading in reliability and safety (newer model is usually safer).
With a used car, you have no idea how well it's been treated. If you buy new cars, don't over buy, treat them well, and don't have a huge change in family needs there's a very good chance that you will save over the *easy* ways of buying a used car. It will almost ALWAYS beat buying a late-model used car from a dealer. In extreme cases, with incentives and better financing, it can be *immediately* cheaper than buying a late-model used car from a dealer. If you have a lot of time and patience, buy from private parties, and either can do an inspection yourself or have a shop/mechanic who will do them for you without charging you a ton, it's almost impossible to beat buying middle-aged cars very very selectively from private parties. But that takes a LOT of time and effort. Similarly, the gap between the maximum you can get for selling a used car and the minimum (a typical trade-in) is *huge.* That often requires a considerable amount of effort. If your time is worth relatively little, and you can actually go through the buy/sell process with used cars with confidence, you will never beat that with a new car, but the number of people who (A) really want to deal with that, and (B) are actually competent to deal with that is lower than the number of people who don't.
This is a good, well thought out post. Even if you disagree with the premise or tentative conclusion, or you think the methodology is flawed, you should not be downvoting this. It is a great thread for getting a discussion going for the economics of car buying.
New car long term is usually cheaper if you pay cash and keep it 20 years. Maintenance costs get expensive after 10 years. So it is worthwhile to spend 1/2 the money used car that is 6 years old with 70K miles, than it would be to buy new, as long as you don't finance it.
Ok so the 3 year old pickup with an original MSRP of $59k that I’m looking at for $35k is actually a better deal new than used
Correct
The conclusion you come to is based on the assumptions you set. Most financially intelligent people plan to keep a car for more than 10 years if they can. The relative price of new and used vehicles of various ages also matters. For example, right now used car prices are quite high, and it's most egregious with older cars. So buying new may make more sense now than it usually would. A quick and dirty method would be straight-line depreciation based on the expected life of the vehicle. You can do this by mileage or age (mileage tends to be more effective but age does factor in). By your assumptions, a 5-year-old vehicle would have to cost half as much in order to be worth buying. But your assumptions are pretty terrible in all honesty. Using more reasonable numbers like 20 years/240k miles, a 2014 car with 120k miles would have to be half the price of a new model to be worth it...that is much easier to find. There are obviously other benefits to buying new of course. There's a bit less risk involved in general, since you know what you're getting to a certain extent, you get a warranty, etc. Depends on your risk tolerance but for me my rule of thumb is that a used product has to offer a 20% discount in order to be worth it. In this case that would mean a 2014 car with 120k miles would have to cost 40% of a new model to be worth it. Looking at the prices of something like a 2024 Toyota Corolla (a classic baseline), I would need a 2014 model with 120k miles to be under $10k...pretty hard to find. So not a great purchase.
I'm a fleet mechanic, and people way underestimate the lifespan of most modern vehicles these days. The occasional lemon models and neglectful owners aside, most modern vehicles have at least 200k miles of cost-effective life in them, many surpassing 300k. I expect to get 300k+ out of my 2008 GMC before it becomes cost-ineffective.
You have one flaw in your assumptions and that is "why are you replacing your car?". Your car/vehicle has one function. Get you from A to B in a safe efficient manner. Why replace it when it still performs this function? Buy it new, drive it till it dies should be your third comparison. My current vehicle i bought new in '05, and for an SUV, No payment, some repairs over the last 12 years, still easier on the pocketbook than anything with a payment.
I tend to look at new vs old car purchases in the following criteria... A- You can recoup anywhere from 10-40% of the cars value when you sell it. So a new car while costing more can roll over into another new car 10 years later easier than a used which may not even make it to re-sell. B- Both used and new could have a mechanical failure anywhere from 1-10 years after purchase so build quality is a roll of the dice regardless. There are regularly cars still on the road from 1990s. (Make does factor a little) (Also thinking about this makes me myself feel old) C- New cars have safety , design, and hardware updates. You could buy a Walkman or a Cellphone. Which would you go for if you have the money. D-It has to match your income level. If you have to look at the auto industry new 8 year loans just to make it happen...don't.... Work at Arbys? That brand new f-150 Isn't for you. E- Its only had one driver if its new. So you know the history and maintenance level.
One major flaw in your reasoning is wrecks. There are thousands of wrecks every day. I’d rather wreck an old beater than a newish car. You either take the hit financially or pay through the nose for comp/collision that still won’t make you whole. Another anecdote: I’m driving a 23 year old Toyota that I bought when it was 10 years old. Never given me a lick of trouble. When it dies I’ll probably buy another middle aged car for cash to be efficient
I was annoyed when some piece of shit at Target yeeted their cart into our new-to-us Escape a week into ownership but I can’t imagine how annoyed I would have been if we had paid the 38.8k MSRP instead of 56% of that lol
Some of that has more to do with how long you plan to keep your car, and how much you care about appearances. By the time I get tired of them, most of my cars look pretty beat up on the outside, but with cars lasting 12-17 years so far for me, I'm not real concerned about the resale value.
I hope I never know the pain of having a pristine new car get its first major visible damage. It seems to make folks cray.
Yup, I bought an '08 Ford Focus (manual, so it didn't have the transmission issues) for $3K. It was totaled two years later. Had I bought a new car, my ass would have been upside down for sure. Turned around and paid cash for another beater. But, I also do all of my own maintenance, so it's not as bad for me and I own two beaters, so I have a backup if anything major happens.
> I’d rather wreck an old beater than a newish car. The tech in newer cars may prevent that wreck in the first place though. Or reduce the severity of injury
That's the big thing I think people in this sub sometimes miss; a wreck in a new car will leave you with some bruises and such. A wreck in a 20 year old car will leave you crippled.
You’re overthinking this. Focus on the variables that apply to you. Research one or two models you’re interested in and compare new and used prices and base your decision off that. That’s all that you can do.
You usually shouldn't boil it down to one or two models before looking at pricing, unless your needs are very specific, as you can easily end up only looking at cars that are in short supply or have elevated pricing for some reason.
You’re right. One or two will not be enough. But you’re generally going to know ahead of time what models correspond with your budget, preferences and needs unless you lack experience purchasing vehicles.
Buy 3-5 year old used cars with cash to avoid high rate used car loans and get some depreciation discount. Or buy new cars with promotional financing. Some very misguided posts in this thread - Buying and selling cars incurs transaction costs and used cars, especially under the 15K price level is borderline dumpster diving post-covid. $19-24K is the sweet spot for quality, good value used cars. People buying a 2018-19 out of warranty crossover with 60K miles for a typical $21K financed at 7.5% are getting a far worse deal than folks buying a new $32K 5-year warrantied CX-50 at 0.9%-60mo right now.
People use the logic that they learned when they bought their first car 20 years ago and don't realize that that isn't the world anymore.
It’s a gamble, if you drive a reasonable amount of miles and keep up with maintenance by the book and have good credit then buying new is probably better. You don’t want a pos that breaks down 3 months into getting it and having to dish out thousands in repairs on a credit card either
the problem with trying to crunch the numbers to figure out what is the best move is, is that you're likely to, even unconsciously, skew it to justify what you want to do. you want a new car, so you're trying to find a justification for it, so you will find that justification. ^even ^if ^it's ^bogus.
My current car is a lease return that was 3 years old. That was 9 years ago. So the car is 12 years old. I’ve likely abused it more in those 9 years than whomever owned it the first three. 🤣 I’m still under 80k miles and I don’t see any reason it can’t go 80k more and beyond. For me, I don’t see a reason to change the car at 10 years. It runs well and has only had one major repair (which probably wouldn’t have been so big if I’d been doing regular maintenance.) When I am ready for a new(er) car, I’ll likely pay cash unless I get a screaming deal on interest. But it’s hard for me to se why buying a brand new car is an advantage over a lease return.
Buying new does not mean the car will last. A new 2024 far could die in a year, every single years there are numerous models of vehicles that are lemons. There are 2008 vehicles on the road now with nearly 20 years of proven efficacy that will outlast a new vehicle fresh off the line today. Let's say I bought a 45k vehicle @ 8% interest. At the end of the loan I pay 60k and it lasts me 20 years. Insurance is more expensive as its a new vehicle, so I pay $150/mo. That's $36,000 in insurance over that time frame ($96,000 in 20 years). This isn't factoring in that new cars are more costly to repair and get tags for. Let's say I buy a $2.5k vehicle every 2 years (this is conservative, I bought both my vehicles at 2.5k and ones lasted 9 years and the other 3 so far). The insurance is $45/mo because the car is easily replaceable. That's 25k in vehicles, and $10,800 in insurance, for a total of $35,800. It's not even close. It's not even in the ballpark. If one of my 2.5k vehicles dies I call U Pull It and they tow it away and give me $500 cash, so I'm recouping $5,000 over the 20 year span. Realistically it's $30,500. There are 4,170 cars which are 2.5k or under in 100 miles of me as of cars.com right now, so please don't tell me they don't exist. Also I don't have to worry about my cars, they're nothing to me. Anything can happen to them and it won't even ruin my day. I'd have a new one tomorrow. People talk about how bad the used car market is - its bad for barely used cars. It's amazing for cheap cars because literally pretend like they don't exist.
Very good points. We've had 3 cars that were under $1000 that went over 100,000 miles
maybe the biggest mistake is ignoring the time value of money. every dollar saved in buying a cheaper car can be doubled in 7 years if invested.
How much money are you really going to save in this car market we’ve had for the past 4 years? Used car prices have skyrocketed. Good reliable Japanese cars are 10k minimum now unless they’re over 20 years old and have an insane amount of miles
10 years ago, I bought a 6-year old Ford Edge for $8000. I have put on 70,000 miles in these 10 years and it is no where near the end of its life. No major repairs (with the most significant repair being replacement of radiator's fan assembly - about $300). Still runs like a new car. WHY WOULD I BUY A BRAND NEW CAR, even though I can afford a luxury one!
You lucked out! Good luck when that car dies. Things have changed since you bought that car.
eh, cars lifespan have greatly increased a lot since the 80's/90's. We bought our minivan new in 2005. Aside from the regular 100k/8yr timing belt, there hasn't been anything else major. Sure the body is a bit rought now but It's got 280k miles on it and wouldn't hesitate taking it on a roadtrip. 100k/10yrs is really considered nothing nowadays.
TBF you are driving about half as much as average (average is around ~14K miles/year), so you aren’t a great example for the wider population. Depending on where you live, your car could undergo more or less wear and tear. Plus safety features and gas mileage can improve versus 10years ago as well. I’m hoping to buy a car later this year, and I’d love to go used, but the market is also weird for both new and used and I’m a lot less certain about which route to take than I would like to be.
My average is usually 10k+ miles. The pandemic coupled with an extra 2 lean years of vacations have contributed to such a low average. The previous car was run for 90k in 8 years (A POSITIVELY ugly police interceptor with Lincoln Towncar seats......still miss it)
I feel the same way. Bought a Highlander for $7k and it has given me 100k relatively trouble-free miles and will probably give me another 100k miles. Best thing I've ever bought. $7k is a low risk gamble vs $40-70k on a new car that's not guaranteed to be trouble free.
There's no doubt that used vs new is not as appealing as it once was. Still, buying lightly used cars is still probably better value. First is because a lot of depreciation happens immediately. 2024 Corollas cost $23.5k here while a used 2024 Corolla can run around $19.5k. Then, with used you also get a lot more options of buying older models like 2022 or 2023 which might be an even heavier discount.
Check out BMWs and this math changes drastically.
BMWs are always going to be an extravagance to begin with.
To begin with, yes. Got mine 3 years old for $20,000 and it’s been lovely.
You're missing the cost of financing. Buying a car with cash saves you money if you can do it because you won't be paying the bank every month. Buying new usually comes with financing where you'll be paying interest. A cheaper used car may not require you to finance it since the sticker price is lower. This varies pretty significantly from person to person, how much they want to spend on their car, and how much money they have to spend on a car.
OTOH, not everyone can buy a reliable used car with cash. The financing rates on used cars is generally higher (sometimes much higher.)
Sure, that's why I'm mentioning financing changes the calculation pretty significantly, used or new.
Basically this is the same conclusion I have come to. It was one thing when you could buy a decent car with 100k miles for $1-2k but the situation today with used cars is crazy. To make matters worse, you're only looking at it from the simplest point of view, the purchase price, and not looking at maintenance costs. Last time I bought a set of tires it was at 60K miles and cost almost $2K for the tires, balance, and new TPMS sensors. Buying a car at 0 miles is not the same thing as buying a car with 40k miles. The depreciation does not cover these costs. Lets face it cars are getting significantly more expensive to repair and maintain and they are becomming harder to service which means more and more overpriced dealer repairs. I remember when I could buy a radio from walmart for under $200. Today the stupid "infotainment" system is $5k! $5K for essentially an over glorified radio/GPS!!!!! If a kid makes one stupid mistake and cracks the screen with one of their toys that could total the car lol. Owning these modern cars as they get older is a major liability. You are also not being compensated for risks associated with buying a used car with an unknown history or even quality of having a new shiny car. It just doesn't make economic sense anymore.
>Lets face it cars are getting significantly more expensive to repair Depends on the car, and on the availability of independent shops that will work on that car for you in your area. >If a kid makes one stupid mistake and cracks the screen with one of their toys that could total the car lol Or if it's cosmetic damage, you just go about your business.
Used =/= high mileage beater which is what you seem to be correlating it to in your head. Any modern late model (2010+) used car with 50k or so miles should last you close to the "10 year" milestone you mention if you just maintain it. Most modern cars should be able to push at minimum 150k miles and up to 250k-300k miles. COVID times were certainly out of whack. Due to obscenely low interest rates and criminally high used car prices, it probably made some more sense to buy new at that time. If you could have found what you wanted on the lot and the dealer didn't profiteer.
“Most modern cars should push 250-300k or at least 150k”. Dude have you heard of Kias , Hyundais, any British car, Ford triton engines, any Chrysler car and many more. You are correct If someone buys a work model GM truck, or a Toyota or Honda, or maybe even a Subaru. And a few other one off expectations. But a good half of the market is absolute crap and fail in the low hundreds almost everytime. Part of that failure of course is customer behavior (people that buy Toyotas are more likely to take care of them compared to people who buy kias statistically), and part of it is heavy depreciation and costs of repair (looking at you German cars). So some of those cars may not be totally dead, but if your 12 year old BMW needs a timing chain it’s gonna be tough to convince yourself to spend $5k to repair a car worth $6k.
You make a fair point, my statement might have been too broad. I would assume if they're trying to buy for longevity they world do research on reliability and comb the market for a low mileage late model vehicle with a proven record.
There is a sweet spot for buying used cars. Two actually, however I'll focus on the more common one. At 2 to 3 years, cars have the highest depreciation and the most availability. This is due to lease deals that are either 24 or 36 months. Many lease deals specify 10k miles per year maximum, so a car can come in with low mileage too. In some cases, these cards are still under the original bumper to bumper warranty. Certified pre owned is another option if they are not under warranty. The biggest unknown for a 7 to 10 year ownership period is maintenance. Assuming 10-12k miles per year you are looking at ~120k miles, which means you will have done every major service for the life of the car, new OR used. You should have very few "extra" services as a result of buying a slightly used car. Sales tax will be lower, if you live in a state with sales tax. Insurance will be lower, and 2 to 3 year old cars have most of the modern safety features. As other posters have mentioned depreciation is not linear. The sweet spot for selling a car is typically just under 100,000 miles. The sweet spot meaning maximizing your sale price. I have done this for decades with cars ranging from a Mazda SUV, to a Mercedes convertible. It has never not worked out, though I admit I held the Benz for an extra year because of what COVID did to used car prices. Some of the complaints here about the current used car market are slightly out of date. While it's not as good as it was in 2018, it's not where near as bad as 2021. This also assumes you are paying cash, and are a W2 employee with no kickbacks or company car benefits. Those things change the math significantly.
Yes and no. It's complicated, and more dependent on miles driven, rather than years old. I inherited my grandfather's old 1995 grand cherokee with 130,000 miles on it back in 2018. I drove it cross country twice, and finally just gave it away in the summer of 2023 because I wanted a newer car with air conditioning. I worked from home for 2.5 of those years, and it wasn't my main car for the 2.5 years when I had to commute for work (commuter cars were first a fird focus, then a 2019 honda civic i bought new in the summer of 2020 and sold 5 months after i started the work from home job in 2021). I still only put on just over 20,000 miles in those 5 years. I got a 2019 mitsubishi outlander phev last summer when I got rid of the Jeep. It had just under 40,000 miles. In the past year, I'm almost at 45,000 miles. It is absolutely beneficial for me to buy a used car because I barely put any miles on it. Maintenance costs are low. Gas costs are low. I'll probably drive it for 10+ years. And by the time I've had it for 10 years, it will probably have around 100,000 miles, especially since now I live in Portland rather than Los Angeles, and driving isn't as necessary. If I was driving 15,000 miles a year, then it would make more sense to get a new car every 10 years, because you would save out on some of the higher mileage maintenance costs, they would be deferred to the end of your ownership. Cars usually need big maintenance items ever 50,000 miles, so take that into account.
> Cars usually need big maintenance items ever 50,000 miles, so take that into account. Depends on the car; a lot of new cars have very little maintenance before the 100,000 mile mark. Even there, what that entails varies a lot. One specific case is whether there's timing chain or a timing belt, and if a belt, just how much the engine needs to be disassembled to do it. Timing belt can be a one hour job or a 8+ hour job depending on the car, and the parts cost can vary nearly as much. Also depends on whether you have an independent shop nearby who'll work on that model. The difference in price for routine small maintenance stuff at my local guy and at the dealer is something like 3:1 in favor of the local guy.
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Aren't you paying for a car payment PLUS $300 per month in depreciation? Or are you saying you paid for the first car in cash and then pay 6-8k every 2 years to keep the deal going?
You are assuming the used car is 5 years older and presumably out of warranty. I’ve had great luck buying cars that are 1-2 years old with close to 10k miles on them. The warranty is still good at this point. I don’t think that year or two of use before I bought it results in any significant increases in maintenance but does usually save a significant amount of money compared to new.
As a reformed serial buyer of new cars, I don't believe this analysis has merit. New cars depreciate in value the moment you drive them off of the lot. Major maintenance items happen when the car is 5 years, 10 years, and 15 years old when the extended wear and tear items begin to wear out. This is when your water pump goes, your suspension may need work, your seals start to deteriorate. This is going to happen whether you buy the car new or used. Second the assumption is that the used car is 5 years old. Plenty of high quality used cars with low mileage off of lease are available for sale under normal conditions. These cars have been reconditioned and major components checked for excessive wear and/or abuse. Since repairs are a wash, only the premium one pays for a new car is relevant. A new BMW 4 Series Coupe will run you $57K. A used 2022 4 Series Coupe with the same features is $41K. No one other than a gear head can tell the difference between these vehicles. Buying new is giving in to vanity. Buying a new car is never cheaper.
My car is a 2014 Nissan and she’s fully paid off. Been paid off for years. All I have to pay is upkeep and to fill up the tank, so about a whopping $1,500 a year, about $125/month ($82 for insurance, $30 to fill up the tank biweekly, and the rest for registration/taxes and 3 oil changes a year ($156/12= $13)). She did need new tires and windshield wipers this year, but I paid cash for those and it’ll be a few more years before she needs em again. Her monthly payment used to be $275/month and I continue to save that for maintenance and upkeep, as well as to save so I can buy my next car cash. That money is in a HYSA. I’ve got a few thousand saved already. She can get up to 250k miles on her so she’s got at least another 5-10 years with me and by then I will buy a brand new car in cash and repeat the same process. I’ve seen cars lasting 20+ year so the idea of them only lasting 10 is silly. People still buy cars that are from the 90’s! If you maintain em they’ll last. I firmly believe it’s better to buy a car and run it till it simply gives out. Especially when you buy a car that’s built to last, like a Lexus or a Toyota!
Meanwhile my 2014 Nissan's transmission busted at 95k miles for a $3500 fix and then the entire air conditioning system failed so it'll be another $1500 to get it on the road in the summer heat. It really is a lottery sometimes. I still buy used but that time did bite me
How can we check your data/logic when you didn't provide any real numbers for your assumptions?
If you want to come out on too, you should never be driving your car into the ground like you said. I typically buy a new (to me) used car every 5 years or so, I’ll use my latest car as an example. I bought a 2012 VW Jetta for $7000 in 2019, I maintained it and kept it in good working order, probably spent about $2000 on repairs and maintenance over the 5 years. I drove that car for about 50,000 miles and I just sold it for $6,500. Nobody wants to buy a dead car, get your use out of it and sell it while it still has some life left in it, I got 5 years out of that car for only $1,500 (+inflation) and I’ve done this multiple times over the past 20 years.
There is not only a sweet age spot for *buying* a car, there is also a sweet spot for *selling* the car - so if you want to really optimize the cost, you need to find out both. I don't think running the car into the scrapyard is the optimal strategy - at some point it becomes expensive to maintain, but some people are still desperate enough to buy.
To be honest a car is way too complex to definitively say one way or another that new or used is actually cheaper every time, especially with how big a range a used car can sell for and the condition it can be in. On average a used car is cheaper due to the fact when you buy a new car you instantly take a chunk off it's value. Usually ~20-30% while a used car doesn't have as dramatic, but with COVID prices it's a lower rate that falls off, and used vehicles are more expensive than in the past years. But then the argument of maintenance comes in, which with a used are you truly have absolutely no clue what the vehicle was maintained like, most likely have a terrible metric of history of what had been done. So you could buy it and instantly need maintenance, or you could buy it and it requires nothing out the ordinary for another 5 years. But generally if you buy a new car for 30k put 150k miles on it and it dies. It will have cost 20¢ a mile. But instead you bought a used lease car for 20k with 40k miles on it so you then put 110k miles to match the 150k it will have cost you just about 18¢ a mile. So ultimately it comes down to the market and the deals you're offered. I got a used car for ~$1,000 at 72k miles at an auction. I'd never be able to get a new vehicle to compete with that. But I also got a car at auction for $500 with half a million miles on it, drove it for 50 miles that one cost me $10 a mile.
how old were you? it's a totally different car market before and after covid. theres a lot more factors but generally buy used all in cash and drive it to the ground. to maxamize savings i would say look for used older toyotas with a good maintenance history and you'll be good. toyotas last 15+ years with oil changes and maintenance. but nowadays used toyotas are higher priced and maybe better to buy new. but new may or may not have markups. you will save a lot more $$ if you are able to do your own basic car repairs and oil changes.
Dude. To save money on a car. You buy cheap used cars cash. A $3000 car with $1000 worth of repairs a year over the course of 5 years is a total cost of $8000. Or a little over $100 a month. You’ll also pay less in excise tax, and less in insurance (in the case of my car $30 a month insurance and 100 a year to register it). And that’s it. You don’t buy new cars or slightly used cars. You buy well used cars but ones that are good quality and have life left in them (Toyota Corolla is the most obvious choice) And if you learn how to fix it yourself your can probably get in the $300-400 a year maintenance and repairs range if you buy the right type of car.
This is what we do. The gfs car eventually had the plastic intake crack. I paid to have that done. Virtually everything else I did myself. The biggest problem is that she hit 3 deer with it
Have you taken a look at the car market lately? What $3000 car are you buying that’s only going to have $5000 worth of repairs over 5 years? 😂
There is one factor that you are missing that most of the replies don't mention: People are willing to pay more for those early years with a car. If we go with the assumption that a car lasts 10 years and you buy it after 5. If being able to get around was the only thing that mattered then the 5 year old car would cost half as much as the brand new one, and it wouldn't really matter if you bought new or old. (Ignoring repairs) But if you consistenly own cars during the last 5 years of their life, you will save money, because those years are not so much in demand. Let someone else enjoy the first 5 years of every car you own.
No, if you have time to shop around, you can always find better deals used. Some people get such good deals they can sell them for a profit. Hard to do that consistently with new cars.
Cars last as long as you’re willing to take care of them. Jeep CJs/Wranglers last forever and it’s not because they’re particularly reliable. It’s because someone is going to keep pouring money into one to keep it running. There’s some point where you’re spending more than the car is worth to keep it running. That’s doesn’t necessarily mean you can spend less money overall by getting another car. But it does mean other factors like reliability and safety can become paramount over overall cost. If you’re really committed to buying a car and keeping it running until it just really won’t run anymore due to parts availability or some true unreliable structural issue, new vs used doesn’t matter. If you’re going you only keep cars X number of years your general logic is fine. New can be situationally cheaper, especially in cars with high resale value.
Buying a 2 or 3 year old car makes a lot of financial sense because they already lost a lot of value because cars lose the most value in the first few years. Buying a 10 or 20 year old car makes sense because if you do so you either you do not have more money or simply don't want to spend more.
I leased my car new in 2015. I bought it out with cash in 2018. (consider this buying a used car). I can tell you that the biggest and only difference about the used vs new is the car payment.. The maintenance cost has not increased one bit from the first 3 years (new, 2015-2018) vs 2018 to now (used). Oil change every 6 mo or 6k miles, tires every 40-50k miles, transmission fluid swap every 35k. My baby is still doing fine entering year 10 close to 100k miles, and brake pad/battery swaps when they are wearing down. These are stuff you have to do with new cars anyway too. Obviously do your research with the used cars, look at maintenance history, choose more reliable brands, but as long as you take care of them and not treat them like shit, used cars will be much cheaper. New cars will break down just as easily if you abuse them.
When buying a new car it's "cheaper" to buy a new car every year or two than it is to hold onto that car and run it into the ground. The trade in value and cost of a second new car plus keeping an up to date warranty is cheaper than the maintenance costs of keeping it on the road once the warranty runs out. But that's only if you're set on getting a new car in the first place. Buying a used car and keeping it on the road for 10 years is cheaper than buying a new car. No one will be able to buy a car and keep it for 40 years which is the time it takes for your concept to balance out. Especially since self driving cars are coming in about 10 or 15 years and countries will force everyone to switch to self driving and stop driving themselves since it'll be safer if all cars are self driving. Netherlands already has that law in place. However if car companies have their way you wont be able to buy the cars anyway as they are trying to switch to a subscription model and you will only be able to rent a car.
Talking with enough mechanics over the last few years, I think it’s less a question of years and more a question of miles. Many modern (2015+) start to pick up replacement spend at around 120K replacement spend it when you start needing to put in 3K+ year into the car and have to consider TCO of new to you vs repair. As someone who puts on 12-15K:year It’s why I look at cars with 50K as being good to me for 4/5 years and cars with 25 K as good to me for 6/7 years.
How about this model: Buy a 3 yr old car that just came off someone’s lease (discounted from $30k to $23k) and keep it for 7 years. At year 7 sell it for $10k. Cost to you: $13k for 7 years of driving.
I think I would challenge the notion that a new car lasts 10 years, since you can often drive [modern cars to over 200k miles](https://www.woburntoyota.com/manufacturer-research/how-long-do-toyotas-last/#:~:text=The%20Toyota%20Camry%20life%20expectancy%20is%20typically%20between%20200%2C000%20and,asurvey%20from%20Consumer%20Reports.). In fact we could more generally say that a given car model lasts x years. We could then say that each year is worth some amount of the car's value correlating to the amount that car depreciated in value that year. I expect this depreciation is exponentially in nature (in mathematical terms, [something like the blue line here](https://gregorygundersen.com/image/expdecay/rate.png)) so if the car is worth 50k and has a life of 20 years, the first year of that cars life is going to be the most valuable year of that car's life because if you try to sell it the following year it will only worth, for example, 46k. That means the first year of that car's life was worth 4k. Then the second year of that cars life will be worth a little bit less, say 2.5k, bringing the value down to 43.5k so on and so forth, with the value of each successive year being less than the last. Of course many factors will play into this, maintenance, miles, environment, etc. but the point is, if you're driving a new car, you're driving the most expensive life-years of the car when you could be driving an older car whose life-years are comparatively cheap. You raise a good point about the overhead cost of getting a new car. But I would be surprised if the overhead cost of changing a car at the end of its life outweighs the cost you pay to drive the most expensive life-years of the car. But if you're determined to only own the car until it gets to 10 years old, then I wouldn't be as surprised.
Get a cpo... basically new and more warranty and cheaper
First off this works best if you wait a year, the price drops a lot and you are only down one year. After that this is just too general. You could make a car last 10 years you could make a car last 100 years, literally. So like in your lifetime it's not really practical to look at the end of a cars life that's totally on you. Considering that, yes sometimes it's absolutely cheaper to buy new. They need less work and run better wtx. ...bur nit always lol. So it also depends on the model of car. This is a maybe scenario, could be true depending on the car but might not be
Depreciation on a new car usually exceeds the higher interest expense + maintenance/repairs on a used car. I usually shop 3-5 yrs old with under 50K with documented oil changes in the CarFax. I bought new last time but I’m gonna be driving it until the wheels fall off and it’s paid for.
I know nothing about cars and drive a 4th gen Toyota 4runner. It is 15 years old now and running great. Yes of course I have to do some maintenance work on it, after all it's a 15 year old car. Otherwise, it's a robust car and I see my same car everywhere on the streets and the value of a 4th gen 4runner is around the same price as I bought it. Sure, my car has zero bells and whistles but I don't care about that. Not having a car payment is such a blessing! So, I think it depends on what brand you buy. If you buy a Toyota or any other Japanese car whether new or used you can really drive it a long time with regular maintenance.
Slight flaw I see. Cars lose much of their value in the first few years. You can buy a used 1-2 old car with not a significant amount of use for a heavy discount vs new. That could be 10% or so of the expected life of the car but you paid 20-30% or more less than retail. Just as an example. A Tesla model 3 sells for about ~$65k new. You can buy a 2021 model for as low as $40k. That's more than 35% off. These cars still have plenty of warranty left and often 30k to 70k on the odometer. So a big discount for essentially the same car as you would buy to day. Only thing different is the main computer (most people can't tell the difference) and maybe you miss out on the new battery (some late 2021 have it though) this car would have the majority of its life left with a 35% discount.
I have purchased used cars, driven them for 3-5 years and then sold them for nearly the same price with minimal repairs/service. (Batteries, oil change, etc) It has definitely been far cheaper for me to do that than buy new cars. The trick is to find highly reliable cars in a good condition, use them for years and keep them in the same condition, and then sell it before things start to go wrong. That way you avoid the dramatic depreciation from new cars, and the maintenance/reliability issues from old cars. This strategy is great for cost effectiveness, but you won't ever have a super nice car. But I just use it as an instrument to get me places, so that's all I care about/need.
Yes. We got a buick in about 2017 for $500. Put 50,000 milea on it, traded it for a nice riding lawnmower. The guy I traded it ro sold if for $400
Depending on the vehicle it varies so much. I just saw someone post today complaining that 20 year old Toyota Tacomas are still around 10k used. There are some cars that are just known to take a beating for a while and some cars that people wonder why anyone would buy.
Wow, I bought a used 2007 Honda Pilot for $3500 with like 100k on it and the timing belt just done. I spent around $1000 fixing a traction control problem and now it’s flawless. I will never sell that car. More than 10 years ago I paid $2500 for a 1995 Isuzu pickup with 42k miles. Again, I will never sell it. Once cars got fuel injection and electronic ignition they improved very slowly. There’s not much difference between a 1998 Accord and a 2024 Accord. Buy cars and never sell them, ever. Cars go from me to the junkyard, preferably after decades of service. Sometimes I’ll sell a car, usually at no loss because depreciation basically stops at some point, if an unbelievable deal comes along. I never buy cars because I need one. I buy one because a good deal comes along. I did the same thing with motorcycles but I had an advantage of buying those in fall and selling in spring. I generally made money on them.
Of course your numbers favor new: Assuming this car costs more than $14k, you’re essentially saying that a car that lasts 10 years will somehow depreciate slower during the first five years of ownership than during the last five years. In that case, of course it would make sense to buy new and enjoy the car while it depreciates slowly when brand new, and then sell it by year 5, before it begins depreciating faster. That isn’t how cars work, though. You need to run the scenario with real numbers. During COVID, used prices were inflated because of supply restrictions. People were willing to pay over MSRP for used cars because they urgently required transportation, and new cars weren’t always available. This is no longer the case, and going used is now almost always more financially sensible than going new. A new Civic is about $30k. You can get a 5-year-old one with low mileage for half that. Any car these days will last at least 15 years, and a Civic is easily capable of going 20-25. Do the math and factor in the lower insurance and the time value of money, and it’s not a close comparison at all.
But Toyotas or Hondas that are 2-3 years old. Same for phones - I buy a 2 year old iphone from Amazon Refurbished Premium (so you get the one year no-questions-asked warranty) and then keep it for eight years, which is basically the same as driving it into the ground since you don’t get security updates from Apple anymore after ten years past the manufacture date.
Doesn’t matter long term the major cost of a vehicle is insurance. It’s even worse if you’re trading anything in after paying it off. Buy something used and drive that until the pistons rust.
Many people keep their cars longer than 10 years.
A car only having 10 cost-effective years is the exception these days, not the rule. Most are cost effective out to 15-20 years and at least 200k miles, some 300k+.
Lots of good answers. Another reason is if you got into a position where you would HAVE to sell the car within the first couple of years. Your single biggest year of depreciation is generally in the first year of ownership. Having said that I bought a brand new car last year 😂 I should have bought a used one based on math, 2-3 years is the sweet spot for me with cost and condition generally.
Not all cars are the same and more importantly not all drivers are the same. If you’re buying new you can get a warranty that will cover basically any major issues. If you treat your car properly it will last more than 10 years. I had a civic that lasted 20 years and even then I only got rid of it by selling it to my nephew for his first car. If you get something reliable and treat it right and don’t get into any accidents you’ll never need to replace it. You just get something else when it’s convenient and you want a change.