Photo by Salt Water New England

Tuesday, December 29, 2020

Car: Buy new or used? Frugal or flashy?

 

Hi Muffy! I have a reader question:

When is it time to get a new everyday use car? Do you buy new or used and why? How important is the consideration of frugality or flashy when buying a car?

Thanks!

 

74 comments:

  1. Are there other choices? How about cool or quirky? It depends on what you want. I have a dark green 2008 Mini S convertible I will likely drive for the rest of my driving life. It is neither frugal nor flashy. If you find a car you genuinely like, stay with it as long as you can.

    ReplyDelete
  2. We buy new, and begin looking for the next one when our independent mechanic starts to say that he's having trouble finding parts for the current one....

    ReplyDelete
  3. I’m giving away my age when I say I’ve only purchased one car to date. I bought my first car 10 years ago brand new off the lot and still (questionably) drive it to this day. It was cheaper for me to buy a brand new car at 0% financing than to buy a preowned vehicle with a much higher interest rate. There were other incentives for me to buy brand new such as a $1,000 grad discount. I am starting to look around for a new vehicle as the repairs are becoming more expensive and parts are getting harder to find (it’s a niche car). I’m likely going to buy brand new again as dealerships in my area offer more incentives to buy new instead of used. Don’t worry about whether a car is frugal or flashy. Buy what you like.

    FYI stay far away from Nissan.

    ReplyDelete
  4. I never buy new. Only buy low mileage 2 year old cars and drive them until they begin leaking fluids or are breaking apart.

    ReplyDelete
  5. Buy Porsches used. Buy Mazdas and Hondas new. Live a little.

    ReplyDelete
  6. Love my 2000 Subaru outback-was practically given to me-no complaints!

    ReplyDelete
  7. Question: Is a Subaru a Subaru, or just a really cheap Aru?

    Anyway, I’ve never bought a used car in my life – probably out of sheer laziness. I didn’t want to put in the effort to research the other person’s thing. But nowadays, I think with CarFax and other methods of finding out the vehicle's history, it’s a good idea and less of a risk. After all, as they say, once your new car is driven off the dealer’s lot it’s immediately considered used – even with only a few feet of mileage on it.

    ReplyDelete
  8. It’s a crap shoot. I’ve had a new Toyota need a transmission at 900 miles and a high-miles used Volvo that went another 120,000 miles with little more than oil changes and tires.

    My current car was purchased new, but it came after a 15 year old car’s long, slow death, so a warranty was a relief. And, while I have friends that swear by used, low miles cars, just be careful. Sometimes, if you time it right and have the time to spare, you can get such a significant discount on a new car that the margin is negligible. I emailed 5 dealers with the model and specs and let them respond. Play them against each other then wait a little longer. When I got the deal I couldn’t say no to, I hopped in the car and drove 2.5 hours to the dealer. We did all the preliminary work via phone on my way there, I spent 45 minutes at the dealer and returned home with my new car.

    Word of advice: Buy less car than you can afford and if you need to finance go for a shorter term. Having worked with a few ultra high net worth New England families, you’d be surprised how many of them drive/drove Subaru, Honda, and Toyota (back in the 90s the list also included Ford/Mercury and Buick). And, remember that it’s perfectly okay to have an everyday car that’s a reliable appliance and something flashy, quirky and unreliable for weekends.

    ReplyDelete
    Replies
    1. Amen. Your post reflects those seemingly forgotten Yankee core values of simplicity and thrift.

      Delete
    2. Wonder if it's still true the most popular vehicle among millionaires is a F-150 Ford truck. If so, I'd bet they aren't the $75,000 versions either.

      Delete
    3. Just sold our F-150. It was great for pulling a horse trailer, antique shows and even as a family vehicle as it was a 4-door with big back seat. Had over 200,000 miles and only sold it because we moved somewhere where it wasn't practical. Best. Vehicle. Ever.

      Delete
  9. Depends on the car you decide to buy. In my area, good/popular used cars like Hondas, Toyotas, and Subarus really hold their value, and aren't significantly cheaper than new cars, especially if you negotiate well on the new car. So we went ahead and bought new just so we could control the maintenance history. I love the way VWs drive even though we've been burned in the past by their poor quality, and considered another one. Would never buy a VW new since the value drops precipitously fast, in direct proportion to how quickly probably crop up in them.

    We kept our old VW too long given how unreliable it was for its last few years, and how expensive the repairs cost. But in our defense, it wasn't our primary mode of transportation (we usually take public transit to work, and if it was in the shop, our suburban town is very walkable so we didn't really need a car. We didn't use a car frequently enough to want to spend lots of money to replace the VW. But then we had a kid who has very serious health problems that require the occasional trip to the ER so it's now unacceptable for our car to be unreliable. It's serious enough that we actually bought two cars so we always have one available. The second car, which really won't be used often, we bought used.

    ReplyDelete
  10. Never have even considered buying a used car. I can't imagine any reason for believing that the previous owner took good care of it.

    ReplyDelete
  11. We've had better luck with new cars. Our first Volvo, a DL wagon, went 18 years before we replaced it with another Volvo. That one didn't last that long but it was unfortunately damaged in an accident. I had a used V-40 that started giving trouble at about 130,000 miles. Our daughter still drives a ten-year-old S-60, which they're thinking of replacing. We currently have a VW Golf wagon and a Ford Escape, both purchased new. However, we're both retired, so neither really gets daily use and I no longer have to worry about the doors freezing shut in the winter. Fifty years ago, there were all sorts of dream cars I wished for but those days are past.

    When it was time to replace the V-40, my wife said 'you're not getting a Mercedes and please don't get a pickup truck.' With that said, frankly, I really didn't care what I got.

    ReplyDelete
  12. I bought a new car when I graduated from law school and that was the only brand new car I've ever bought. I've been lucky with a local broker who specializes in higher end 2-3 yr old models that are typically turned in from a lease arrangement and are still under warranty and look great. My most recent is an exception to the 2-3 old ones he usually sells me. My Mercedes E550 is a 2010 model, but only had 22,000 miles when I bought it last year. Of course it isn't under warranty, but it looks and drives like new. Of course, we don't have the salt on the roads issues down here in New Orleans that plague used cars up in your neck of the woods.

    ReplyDelete
  13. I just want to thank everyone for posting. I have a 12 year old Honda CR-V (low mileage) and find the posts interesting and helpful.

    ReplyDelete
    Replies
    1. We owned a Honda CRV and loved it, never a hint of trouble. We needed something larger and went to a Honda Pilot. Again, not a spec of trouble for seven years, but it was getting up there in mileage and traded it in for their new Honda Passport in April 2019. Still have the Passport and are enjoying its reliability and comfort despite being designed for off-road use.

      Delete
  14. We will be buying a car sometime in the next year. Currently driving a 2001 pickup (we live on a farm.) it runs great, but the mileage is getting up there. Trying to decide between new and used. We inherited the pickup from an uncle who bought it New not long before he passed, so it’s been a while since we had to shop for a car. Not looking forward to it.

    ReplyDelete
    Replies
    1. Mileage alone isn't the best reason for getting a new car; rather how's that 2001 model performing? If it meets the needs and doesn't cost a lot to run, then keep it. It's paid for (I'm assuming) after all.

      There's another matter too. New model cars and trucks come with a slew of add-ons that you have to pay for but which you may not want: lettle beeps and other noises that tell you that someone is overtaking you, or that automatically slow the car if, in the computer's mind, you're following some other car too close.

      I understand where this "safetyism" comes from, but it's teaching drivers very bad habits of letting the car make decisions that are properly the driver's look-out.

      And don't get me started on touch-screen controls. My take: If you can't do something with a button, knob, or slider, it doesn't belong on the control panel.

      Delete
  15. We always buy used cars- paid with cash. Always. We are loyal to certain car brands, always German. We have never not paid cash for a used German car in the history of our marriage. I can not imagine taking out loans for a new car.

    ReplyDelete
    Replies
    1. I agree 100% A loan is not money well spent.

      Delete
    2. There are so many offers with 0% interest - makes sense to allow my money to grow and take advantage of these.

      Delete
  16. I put many miles on my car going from lake house to island house. Bought a 2018 Toyota Camry LE new in February 2018. I have over 60,000 miles on it. I've only needed usual maintenance, and just recently, new tires. Great trunk space and back seat folds down if needed. Gets 40 miles to the gallon on the road at 70 to 80 miles per hour. I look enviously at BMWs and Mercedes, but as an older person, I really don't want to drive something that's flashy. Why tempt the bad guys? As they say, "Don't drive your money."

    ReplyDelete
  17. Given the rapid depreciation of a new vehicle, I don't find the 0% interest for a new car a bargain (given the drop in value of the vehicle once you drive it off the lot). I find it better (for an everyday use car) to check out Consumer Reports and select a 2 year old model where reviews are good to excellent across all categories. This, in my experience, limits issues with reliability/repairs and ensures a reasonable retention of value. With routine maintenance, such vehicle should also have a decent re-sale value when you're ready for something new.

    ReplyDelete
  18. My last three car purchases: 1) in 1999, I bought a 1996 Audi A4. What a great car. I continued to drive that until 2015. I'd still be driving it, but with 287,000 miles, it leaked like a sieve. 2) In 2015, I bought a BMW X3 new, outfitting it with all the technology bells & whistles. I liked this car's handling so much that I finally gave up the Audi and 3) bought a 2-year old 3-series. Both BMWs have about 50 - 60,000 miles on them. In my book, that's just getting broken in. We'll see if the BMWs can match the Audi in longevity.

    Aiken

    ReplyDelete
  19. I prefer to buy a low mileage used car with all the luxuries. Currently on my second Lexus, as they go forever. I also buy cars from warmer southern states and inspect the undercarriage for rust.

    ReplyDelete
  20. We purchase new, run them a long time, and use the time to save for the next one. Have considered buying slightly used as well.

    How they look and run is a pretty personal thing. Some people are passionate about the ability to zoom, drive with a convertible top down, off-road, enjoy a stable, luxurious ride, and/or save money on gas, and that has a fairly significant influence on the purchasing decision. We always have at least one vehicle that’s good at hauling things and reasonably good in the snow - currently, that’s a 2020 Subaru Outback Touring. (Spouse’s car, she loves the tan leather seats and Tesla-sized touch screen).

    ReplyDelete
  21. Decisions about cars are not always rational and maybe that is ok. Still driving a 2005 Volvo XC70. A rational decision in 2005 and among the best cars I have had. Maintain a 1998 British racing green Jaguar XJ8 for nostalgic reasons. Car belonged to my aunt and thinking of her driving it with her special verve never fails to take me back to moments with her. Coming home years ago from hospital and cardiac procedure spotted a 1989 white Porsche 911 cabriolet in dealership display. Now or never moment. Bought it without hesitation and never looked back. Thinking is good but be open to messages from other places. More fun that way.

    ReplyDelete
  22. I bought a used 2012 MB SUV in 2014 -- it still runs great. I got it used from the dealership (it had been a loaner vehicle). I liked its unusual color (Paladium) -- got it for 1% interest rate from the dealership (which was better than the bank). Still have it and use it when the weather is snowy as I can't drive my other car in the snow.

    ReplyDelete
  23. I always buy certified used cars. They’re always in good shape, still have a warranty, and buying used is better for the environment than producing a new car.

    ReplyDelete
  24. If you put a lot of annual miles on your car buy a high quality previously owned certified European car. I put @ 40,000 miles per year on my vehicles does not make sense to buy new.

    ReplyDelete
  25. I've had great luck with used Toyotas, Volvos and Subarus.

    ReplyDelete
  26. I am so meticulous with how I service and pamper my cars, I can't bring myself to purchase one used. I need to know how the car has been treated and maintained from day one. Cars that are on the market after 2 or 3 years are typically off lease. I know too many people who abuse cars that they lease because... "who cares, It's going back in X months".

    ReplyDelete
  27. New cars depreciate most rapidly in the first three years or so. I'd prefer to let someone else eat that large chunk of depreciation. Assuming that you are secure in who you are and don't need to make a statement to world, choose a car based on its reliability and durability. Buy a used car that is at least two to three years old, preferably from its original owner who can show you the service records. Maintain it religiously and always with full synthetic oil. Drive it intelligently -- avoid high engine RPMs until the engine has fully warmed up; avoid "jack-rabbit" starts and hard braking; keep it reasonably clean; and don't ignore strange noises. With the exception of rare and antique vehicles, all cars depreciate, some more rapidly than others. Put your money in assets that have the potential to appreciate. I love Anonymous December 30, 2020 at 9:58 AM's comment: "Don't drive your money."

    ReplyDelete
  28. Hodge Taliaferro IIIDecember 31, 2020 at 9:27 AM

    I've always just gotten hand-me-down Bentleys and Daimlers from my uncles and parents.

    ReplyDelete
  29. Surprised nobody has mentioned leasing as viable option?

    ReplyDelete
    Replies
    1. Me too. Warren Buffet advised to buy what appreciates and lease what depreciates.

      Delete
    2. Good advice. A paraphrase perhaps of the Hon. Buddy Cianci’s advice, “never buy when you can rent.”

      Delete
    3. Agreed - and I've always considered leasing. But then I'd change my mind because my dogs go everywhere.

      Delete
  30. Just buy the best Japanese car you can and run it into the ground.

    ReplyDelete
  31. Frugal and safe = Volvos and SubOutbacks. Yes, 30 year ago when my career began I had my MB sedan and LandRover for winter fun - yep lived in Chicago back then. yet, my entire family believed in the buy it once, buy it right, run it into the ground: no disposable cars here. Well, they were right! Currently we have an XC90 from the year 2008, an S80 from year 2009, and a SubOutback 2011. Aggregated mileage almost a 500k...and I love life! No car payments, scratches and dings (on these chariots are a badge of honor), great in New England winters, drive-on beaches, dogs, kids sports equipment, and yes teenage drivers! Nothing worries me - be frugal and safe! Besides, the new wealth is health, not automobiles!:)

    ReplyDelete
  32. You got it Ms Mad Dogs and Messrs Englishmen... our ‘07 Subaru has 252k miles on it and is running strong. We have also a mint ‘97 Volvo 960. It’s the “Sunday car. It has 112k miles on it. It’s unlikely it will ever catch up with the Subaru.

    ReplyDelete
  33. To answer your three questions:
    1. I keep every car until it costs more to fix than it's worth (20 years or so).
    2. I have never bought a new car and probably never will. I prefer to get a car 2 to 3 years old because cars tend to depreciate more at the outset. (Did I get that idea from Click & Clack? Can't be sure . . . .)
    3. No flashy cars. (I drive a Subaru Forester as my every day car.)

    ReplyDelete
    Replies
    1. Oh, how I miss Tappet Brothers!

      Delete
  34. Al. sensible comment. For longevity Toyota is number1. Hearing great things about mazda which isn't popular here but a sporty better handling Toyota. I'm hearing Honda not what it was. Subaru very good except for cvt transmissions.....Old Lexus very hard to kil.

    ReplyDelete
  35. In my experience, old money generally tends to be frugal and thus does not bother with a flashy car. They also tend to own their cars for many years. New money often feels a need to show they have money, so they often do drive a newer and flashy car.

    This was nearly always the case in the parking lot at prep school back in the day. It remains largely true today in the town where we reside. A lot of old money families here are driving older vehicles from Toyota, Honda, and Subaru, along with the highly reliable Ford F-150.

    Top Gear talked about this pretty accurately circa 2004 when Captain Slow did a review of the Outback.

    ReplyDelete
  36. The best vehicle is one that is reliable, runs well, and can carry (or store) your boating accessories and supplies - extra credit for having room for four to bring your weekend crew. :) Happy 2021!

    ReplyDelete
  37. It's really such an individual choice. One of our cars is electric, and any future cars will also likely be electric. It is better for the environment, and I think gas-powered cars will likely be phased out in a few decades. (That is the plan here in Massachusetts, which is banning the sale of new gas-powered cars by 2035.)

    ReplyDelete
    Replies
    1. I'll go out on a limb here and predict that the electrics-only movement will prove to be a boomlet that gets watered down once it becomes clear that there won't be sufficient electric generating capacity to feed a nation's worth of electric vehicles. Unless we go big-scale into nuclear plants — to which the electric crusaders are highly allergic.

      We'll see.

      Delete
    2. I'm with Tim!

      Delete
    3. Even though there were electric cars have been around since before WWII, they certainly have their disadvantages. If you lived 15 or 20 miles from the nearest gas station, much less an electrical charging station, maybe an old-fashioned gasoline-powered car would be better. As for banning the sale of new gas-powered cars in one state, that's something that would easily be circumvented. It would also help boost the price of used cars.

      Delete
    4. I applaud things that move us in the direction of lowering carbon emissions. I had a Civic hybrid, but I also had a job that took me to remote areas from time to time. A friend had an issue with her Prius and got stranded in a remote city. My Civic had an issue, and my local service station would not touch it, insisting I had to go to the dealer. After one or two
      ore small issues I decided the world was not ready for hybrids and bought my used Mini. I am sure things have changed for the better, but the issues of infrastructure to support electric cars go beyond supplying electricity. Also, for us New Englanders residing in Texas, range is a big deal. Last but not least by my reckoning, there is price. Many if not most electrics are quite dear, and the hybrids aren't exactly cheap. The payback through savings on fuel is not as dramatic as you might think on a hybrid. Before my Civic hybrid I had a Civic DX, and its overall mileage was nearly as good. Ironically I 'd probably still be driving my DX but for the fact that my then teenage daughter objected to crank windows and a basic radio. Plus the Green Rocket was not much of a looker. We all need to be hoping for a major breakthrough in battery technology! I'll end my early morning rant by saying that reducing my driving significantly has been a major benefit of retirement!

      Delete
    5. Interestingly enough, I was just reading an article about how Norway just became the first country to sell more electric cars than gas-powered. Here in New England I have seen many people trading out their VW’s, BMW’s, and Lexus vehicles for Teslas. While battery technology, affordability, and electrical infrastructure are all obstacles, they are obstacles that many companies are working on - not necessarily because it is better for the environment, but because there is so much money to be made in that industry. While many of us might not be around to see it, I absolutely believe that in fifty years there will be predominantly electric cars on the road. I welcome it as a positive step for our environment.

      Delete
    6. I've explored some of the newer electrics coming out and the RIVIAN looks it might be a great sport utility. I love the Forest Green! (SUV, not the truck).

      Delete
  38. Buy new. Pay cash. Keep fro seven years.

    ReplyDelete
    Replies
    1. Or longer if still in decent shape, performing well, and not needing big dollar repairs?

      Delete
  39. Muffy, what do you think about synthetic motor oil?

    ReplyDelete
    Replies
    1. I didn't know Muffy ran a garage???

      Delete
    2. Miss Vito: That's a bogus question.
      Judge Haller: Why is it a bogus question, Miss Vito?
      Miss Vito: Because it's a trick question. Cordings and Mercer don't make synthetic motor oil. But if they did, the correct answer would be, "It's terrific."

      Delete
    3. Don't underestimate her knowledge and breadth of contacts.

      Delete
  40. 20 years if running well.

    ReplyDelete
  41. Buy used when you have time to spend looking for a good one. Buy new if you're busy with other things.

    Buy a flashy car when you are young and you will look good in it. Buy a discreet car when those days are over.

    ReplyDelete
  42. We were left with no choice but to purchase two new vehicles this year; my wife's SUV expired ignominiously following an in-vain (and costly) attempt to breath new life into a failing carcass. It was a Ford Edge, with only about 130,000 kms (not miles) on it. It was 11 years old. The other was a C300, which was hit by a deer. The Mercedes was in near perfect shape. That was upsetting. Nonetheless, we've purchased his and her VW Alltracks; with some of the best warranties in the business (read: they're less likely to come unscrewed than some others). Essentially, we boiled things down to two cars: Subaru Crosstreks, or the Alltracks. The Subarus were blingy on the inside and out - and aimed at a younger demographic with a prediliction for all things digital; to the point of distraction. And, they were noisy. Hate that in anything other than a performance vehicle (and, sometimes , even then...). The VWs are now more reliable than in the past, drive wonderfully, are all wheel drive, quiet, more comfortable, have better fuel consumtion, more horsepower, and analogue guages. My wife's has paddle shifters! And, the VWs feel more grown-up than the Subaru. The choice was easy. I still also retain a pristine Saab Viggen, for summer weekend jaunts. So frugality, but with a touch of Germanic engineering, and quality... at a better price.

    My two cents, from north of the 49th parallel,

    Banacek.

    ReplyDelete
  43. Never buy any car that is not built in Germany.

    ReplyDelete
    Replies
    1. Mmmmm... That used to be sound advice, maybe 25+ years ago, when the engineers were in charge. I don't think it's valid, these days, now the accountants are in charge.

      Delete
  44. A used car that was previously leased can be a great bargain. My Audi A4 was three years old and only had 11,500 miles on it when I purchased it. This was five years and 60,000 miles ago and it has never given me any trouble.

    My dad drove a taxi for 30 years and was a firm believer in oil changes every 3,000 miles, and meticulous adherence to the manufacturer's maintenance schedule. And he was right -- he'd buy used four-door American sedans at the local police auction, with 100,000 miles on the odometer, and then he'd use those cars as taxis until they reached 400,000 miles. And this was in the 1980's, when American cars were incredibly unreliable.


    We've owned American, Japanese, and German makes. We always change the oil every 5,000 miles and perform all recommended maintenance. In our experience, some American cars will start falling apart around 125,000 miles. This is especially true of Chrysler products. My Jeep Cherokee, which was meticulously maintained, started overheating and burning oil at 125k, and that was that. It was a wonderful car but it just wasn't reliable. GM and Ford products can usually make it to 200,000 miles.

    Toyotas and Hondas, OTOH, really are as reliable as they are reputed to be. This is as true today as it was in the 1980's and 1990's. The American makes have narrowed the gap somewhat -- but there's still a sizable gap. The other Japanese brands are a tossup, we've had good luck with a Nissan Xterra that we inherited but others have had noting but problems with their Nissans.

    The entry-level and mid-range German luxury brands are more reliable than most people realize. They tend to have a lot of minor defects, but few major mechanical defects. For example, my wife's Mercedes C280 had a digital odometer that started displaying what can best be described as hieroglyphic characters instead of numbers. Then it stopped displaying the milage at all. We replaced it twice but the new units always developed the same defect. Once every year or so the odometer would start working again for a few hours, and then it would fade to black again. This was obviously very annoying -- but the car was otherwise reliable. It always started up and took us where we wanted to go, up until approximately 175,000 miles. We had an E-Class that was also reliable. Its turn signals would sometimes activate for no apparent reason, and the radio volume would sometimes spontaneously increase or decrease without any human intervention, but it too was reliable. I would never buy a used Mercedes S-class or BMW 7-series but the less expensive models are OK. If you buy the ones that were leased for three years and returned, you can find some fantastic bargains. We are in Southern California where lots of people lease luxury cars, but I'm sure there are bargains in other areas, too, if you keep an eye peeled for them. Lots of older people will lease a luxury car and return it after three years with very low mileage.

    So that's what we buy these days -- Toyotas, Hondas, and entry-level and used mid-range German luxury cars. The Toyotas and Hondas are very reliable and the German cars are a bargain.

    ReplyDelete
  45. I believe everyone reading this blog should be on the lookout for a Toyota Land Cruiser. Yes they are expensive, the gas mileage is laughable, and they are not easy to find. However, the land cruiser is designed by Toyota to last for 25 years without unscheduled maintenance. They can fit the whole family, and are excellent in the snow and off road. It’s quite literally the most reliable car you can buy. I bought mine pre owned several years ago and I can’t imagine driving anything else. Any other land cruiser owners on here?

    ReplyDelete
    Replies
    1. No, but one of my cars is a Mk1 Toyota Yaris which must be pound for pound the most solid little car on the market. It's 15 years old, has done just over 103k miles, and has never missed a beat. The plan is to drive it until it dies. Some owners of the same model have reported well over 300k miles.

      On the subject of Land Cruisers, look at what vehicles are used for serious off-roading around the world. 9 times out of 10 the vehicle used will be a Land Cruiser (the other 1 out of 10 will likely be a Nissan Patrol). If I needed that kind of capability from my vehicle a Land Cruiser it would be.

      Delete
    2. May I ask if you live where they salt the roads? A dear friend loves her TLCruiser but they rust horribly.

      Delete
  46. Living in Maine, the taxes on new cars is horrendous so I tend to drive the car into the ground until is just falling apart. I have two vintage vehicles: Jeep Grand Wagoneer. The taxes are $45 a year and the same for my 1970 Mercedes Coupe. I have a 2013 SUV and I think it's time to get something different. Sadly in Maine, the salt roads just ruin the undercarriages and vehicles just don't last. It's awful because I only have 22 thousand miles on her.
    I was hoping the new Jeep Grand Wagoneer(premiered today) is just too flashy for me. I'm at a loss as to what to get.

    ReplyDelete