What is more, when you see all those cars that are going to be 'totalled' by the insurance company because they were under water in the southern part of the US or on the east coast, those cars used to be sold for pennies on the dollar in "salvage sales" in which salvage dealers would recover parts and/or do enough repairs to resell them with a salvage title. The bidding for those cars is much more intense given the demand by rental car companies for stock, any stock, to boost their fleets.
Well, the thing about flood-cars is they can look and drive fine but really merit being called totalled - having been submerged makes corrosion inevitable in a much quicker time frame. All of the electrical parts will go bad in X time frame.
Maybe these can be kept going long enough to bring value to companies but it seems like you'll have a lot more car renters on the side of the road than normal.
"Water can ruin electronics, lubricants, and mechanical systems. It may take months or years, but corrosion can find its way to the car's vital electronics, including airbag controllers."
I exclusively buy newer used cars and keep them forever because 1) I want to suffer the pain of buying a car as rarely as possible 2) I want to let someone else take the big up-front depreciation hit that comes with that intoxicating new car smell.
Every car from a dealership these days comes with a CarFax and these have become mostly useless as a buying tool ever since they became a car sales tool. However, they do often give you some insight into where a car has been via registration and title changes.
I keep a record of recent hurricanes and where reports of flooding happened. If I'm looking at a car, the first thing I want to look at is the CarFax to see if it's ever been out of state so that I can cross-reference it to my hurricane/flooding list. If there is any indication that the car might have been in the same state at the time that a flood happened, it's an immediate hard pass. Doesn't matter if there's no visible evidence of being a flood car, doesn't matter if the title is green. Some outfits are very good at cleaning up flood cars to look close enough to normal that the average joe can't tell the difference. All flood cars are supposed to get a salvage title but a lot of them slip through the cracks. It doesn't take a lot of searching to find anecdotes from burned buyers online.
I have passed on several cars that looked like great deals but came from flood zones and possibly passed through the hands of a few unscrupulous auctions, mechanics, and dealers on their way to my region.
It's been a hot minute since I last saw a "barely used" car going for an appreciable discount over a brand new one. Even today you may be able to find a better deal on a new car where the dealership isn't adding a scalping fee.
For the reliable cars like Honda Civics and in-demand ones the 1st year depreciation wasn't actually all that much compared to buying it new with a good dealer discount, urban legends notwithstanding.
Same here, we bought a new Subaru Crosstrek the end last year. Looking at the depreciation curve we found that the car didn't really depreciate more the first couple years than it did later years, so going for a new one made a lot more sense than I initially thought it would.
Same with my Subaru Forester! My car got totaled so I needed a new one. Used Forster that were 2-3 years old with 30k miles were selling for 24-26k with loan interest rate of 1.9 or so. I ended up by a brand new Forster xt for 28k with 0 interest loan from Subaru. Only cost me 2k more to get brand new car with full warranty vs a car that was 3 years old. Made back the difference in interest rate. I took a 5 year loan because why not no interest. I was never underwater on the car as put decent amount down.
I like it. I kinda wish I got the touring for eyesight for adaptive cruise control. But it came with leather and I was just not going to deal with leather. Though the outback XT is pretty good as it is 2.4 ascent engine so no premium.
I got the touring and it’s definitely nice. The problem is that you can’t replace the head unit since the Harmon Kardon speaker system needs an extra amplifier. That means I don’t have CarPlay. Makes me sad.
The ACC is a bit spiky. Could use some easing. But with everything on it’s not too bad in rush hour traffic when I don’t feel like taking the motorcycle out. Feet on the floor and it takes care of everything.
Yes, if you calculate the depreciation based on getting a pretty good deal rather than paying the list price, the fabled thousands you lose as soon as you drive off the forecourt mostly vanish.
If GP is like me, it's related to buying used higher end and/or "luxury" brand vehicles. In my experience, my previous 2 vehicles were 2 and 3 years old respectively and cost roughly ~60% of sticker price.
Yep, this is what I've experienced last two times around looking at Acuras, Lexus, etc. Maybe it's different with trucks, SUVs, and non-luxury brands, but the new cost of a mid-tier Acura is at least 50% more than one with 20K miles off a 2-3 year lease. This was always the sweet spot for these cars as they were in perfect shape and still had pretty decent "certified warranties".
I'm due for an upgrade, but if my choice is between a full price $40K new sedan or a 3 year old one for $38K (instead of the $26K I'd expect to pay a few years ago), then I'm more than content to just keep my ten year old Acura, knowing I'll need to spend $500/yr on repairs as it starts showing its age.
My local dealer (pre-covid) had a deal where basically you paid $1000+ a month, and got your choice of which luxury vehicle you wanted. Swap em in and out like old school Netflix. No idea how successful it was, but I don't hear anything about it anymore.
Looks exactly like a lease except they cover a few more things like tires? And even then, it says they cover cases of "excessive wear" which implies something wrong with the vehicle which the warranty should cover in either case.
Is there any real difference besides the fact that you can order it online and that it appears much more expensive?
To answer my own question, looks like they include the insurance and they do pay to replace the tires if needed and you can cancel after 5 months, I guess.
I'm thinking more along the lines of how car companies can recapture the money that the second owner is saving by buying a used vehicle.
For example instead of selling a car, selling a license to use the car to the first owner and then deactivating features or throttling performance if/when they resell the car.
GM currently tracks 100+ variables of your car over the life of usage (thanks on star!) and then calculates a resale price and offers to buy it back or gives you a certain deal when trading in.
Ford does something similar but is easily defeated by changing the stereo. The APIM tracks your driving habits locations and ecu vars which is captured and uploaded to Ford when you take the car in for service (don’t know how this works in their newer 2019+ cars since they are also connected 24/7 like GM)
Yeah for me when we were buying our next minivan Honda it was more important that we didn't end up buying the first cars in a generation refresh. The first year of a generation tends to have more bugs than others. New vs like-new doesn't matter for the big reliable mass produced cars.
Yeah the last two times I bought a car I just bought new with the plan to ride it out until it started becoming unreliable. Well, the first one I totaled instead so it didn't totally work out, but the second one is paid off and still running great, plus I know it has been maintained to a reasonable standard.
I've done that with my wife's last two cars but in both cases we ended up spending a lot before we replaced them. This time we will swap them out a little earlier.
Simply put, the ask-bid spread on barely-used and/or CPO cars are huge (read: they buy really low and sell really high). Dealers make a lot of money this way.
My 2014 Ford is now selling for the same price I bought it for. I have only put 10k miles on it in the last 4 years. Tempted to sell it and wait for the recovery and pickup a new car at bargain basement prices
> 1) I want to suffer the pain of buying a car as rarely as possible
It is not that bad as of 5 years ago. You can email various dealerships and ask them to contact you if they are willing to sell at $x. If you are more desperate, you can ask them to email you their best offer. I was in and out in about 2 hours, just filled out forms based on what was discussed in the email and browsed on my phone in the meantime.
You can even see the inventory online at the car brands' websites. Although that may have changed in the last 18 months due to extreme imbalance in supply and demand.
I would have walked out. But the emails I sent always made it clear I am only discussing total price, inclusive of everything. The few that were not able to clearly respond to my emails, I ignored.
I have only bought 2 cars in my life, the same way, so my data set is not extensive. But I did get the idea from reading about it on forums, so I presume others are getting it done the same way.
Actually, Costco has a program where the total out the door car price is set and non negotiable and I would assume the dealer would not want to screw you as that could cause you to report them to Costco and then Costco to sever ties with them.
What I did is start at the Costco price and email a bunch of dealers and let them know I am interested if anyone wants to beat that price.
How did you find out the Costco price? I tried this and it only told me the dealer who was their designated Costco liason, but, absurdly, wouldn't show me the price.
Yes, the dealer contracted with Costco has to give you the price, but I believe the benefit is that the dealer will not yank you around with various options and up charges or last minute surprises. They should be able to email you an out the door price per whatever agreement they have with Costco and you should be able to shop that around at other dealers.
Of course, this may have changed due to recent circumstances.
Ask for “out the door price”. It makes it an apples to apples comparison. For my last car, 30 minutes of phone calls to the “online sales manager” pretty much zeroed in on the lowest price I would get in my area, and this matched the KBB forum prices I was seeing.
Or… just by a Tesla. I hate that I am a fanboy, but I am. Great sales process, great car.
Bingo. I thought I finally had the procedure down last time around. I found similar models, sent them my terms over email, and let them know I wouldn't put up with games and would walk the minute I detected any BS.
Several dealers seemed to know the type of customer they were dealing with, and for the most part, played things straight.
A month or two later when I was reviewing my account on the credit company's site, I discovered some sort of financing charge for $1500. I have no idea how they managed to slip it in - maybe I could have got it removed if I complained. But at that point, the sale was made and the creditor would blame the dealer, the dealer would blame the creditor, and it wasn't worth the fight.
They just cannot be trusted - it's inherent in their business model and how the various teams (sales, financing, etc) all earn their commissions.
…$1,500 is not worth the fight? All you have to do is ask them to prove where you agreed to it. You either missed it when you signed the paperwork, or they are stealing from you.
> All you have to do is ask them to prove where you agreed to it.
I'm sure I did "agree to it"... on page 18, paragraph 3, subsection 4 - right there in the 6pt font where it states I understand I'm liable for applicable dealer-financing surcharges, etc. which can be applied at some later date.
The big dealerships have learned to cut out the bullshit. They make money on volume, turning cars off the lot quickly, rather than trying to maximize profit on each sale individually.
CarFax gets data from state governments. If you move to Georgia, you'll register your car in Georgia, and the DMV will tell CarFax. Then the CarFax history will contain 'registered in Georgia on xx/xx/xxxx.'
Same if you take the car for service to a shop in New Jersey; if the shop participates with CarFax then the record will include 'oil change and tire rotation @ (shop name), NJ w/ 3,300 miles' or something roughly along those lines.
Everyone who thinks they're smart by reading /r/personalfinance has figured this "hack" out. You're not saving much of anything by buying newish used cars unless you're buying the things that moneyed buyers flee from (Ford Foci, Chrysler 200s, other stereotypical fleet sedans from non-premium manufacturers), no a Camry/Accord do not meet these criteria.
I buy 6-7 years old around with around 100k miles. A car that was $40k will sell for $15k of less. Saves so much money that I can easily put new interior, upgraded entertainment, new wheels etc and still come out way ahead.
Cars made in the last 2 decades by most manufacturers tend to be very reliable, even well past the 200k miles mark.
As for maintenance, just find a trustworthy Indy mechanic and never go back to a dealer again. Compared to family that always leases a new car, there really isn't much difference in repair downtime. New cars tend to have a lot of bugs to work out that have already been addressed in a well used car.
My Indy mechanic is very good and very fast. Although it’s a little pricey. When I pulled in to get a new tire, he had 12 people change out all the tires. The good news is, they took less than 7.7 seconds. The bad news is, they charged me $14,000 and I still lost the race.
For example for a few years Chevrolet Silverados were made with "cat eye" headlights. Those trucks hold their value far more than chevys with rectangle headlights, all other variables being equal.
I haven’t looked at carfax in a while, how granular is the location data? I thought it just reported state, in which case you simply never buy a car that has been on the south or east coasts?
I buy new, end-of-year sales models. Drive them and sell them for a slight loss 2-3 years later to Car Max.
For example, let's say the new car is $50,000. I wait until it's $42,000 or whatever, buy it, keep it for 2-3 years, and sell it for say $37,000. I've done that 4 times now. I don't understand the business model of Car Max, to be honest. There seems to be a lot of people who believe used cars are good deals, I guess.
You are not coming out ahead. Buying a new car will have long term benefits compared to someone’s used car which may or may not have issues depending on the reason they sold it so soon.
Also, if you can’t deal with the “pain” of buying a new car every few years you must find a lot of things really painful.
> You are not coming out ahead. Buying a new car will have long term benefits compared to someone’s used car which may or may not have issues depending on the reason they sold it so soon.
Most people sell their new cars due to an expiring warranty period. Second most people sell their new cars due to the needs of a growing family. The third most people sell their new cars due to a changed financial situation. The fourth most people sell their new cars because they want even newer cars.
'Build quality dissatisfaction and reliability' is the fifth most common reason to sell a new car; or rather, to introduce a single-owner car to the used car market.
I had a JD Power infographic from ~2013 that listed the reasons, but am having trouble finding it.
Unless things have changed since 2013 signifigantly, most used cars that just exitted the factory warranty -- and sometimes factory maintenance umbrella -- have a lot of life left in them.
Aside from that, a car that is a few years older has a significant price advantage on parts -- a feature that is attractive to capable DIYers and mechanics.
And further aside from that -- if you're in the market for a used luxury brand car (Lexus/Infiniti/BMW/Audi/Mercedes/Porsche/ETC) , buying used allows one to side-step the dealer imposed major dealer-markup fees.
Example : the E92 M3 MSRP from from 2009 was about 70,900~ USD. The dealership markup in North Hollywood was 30.5k. In 2010 that same car was worth ~67,000 USD on the used market.
Many of these cars had less than 20,000 miles at the time of sale; buying a card with mileage that low is worth a 35,000 dollar discount to many people.
Alternative view; a car that is in decent shape from a first owner, especially if that person put on mostly highway miles and had the first 50+k miles of maintenance paid for is definitely not a lemon.
Anecdotally: bought a 2004 bmw from the original owner with 123k miles in 6 years. 7 years later. 185k miles, original clutch. (I'm also a mostly highway miles driver, but this also includes track days)
Here cars are leased on 3-4 year cycles, so its typically best to aim for one of those.
Most people leasing cars do it for fashion reasons, so they are normally getting rid of the car to upgrade to the next shiny thing, not due to problems.
If they can keep them going a year or even two it might be worth it for them in the current supply crunch - food for thought. These won’t be sitting in someone’s garage 90% of the time, they’ll be on the road.
That said, not looking forward to having to rent a car and dealing with mold or more frequent breakdowns on the side of the road!
What is more, when you see all those cars that are going to be 'totalled' by the insurance company because they were under water in the southern part of the US or on the east coast, those cars used to be sold for pennies on the dollar in "salvage sales" in which salvage dealers would recover parts and/or do enough repairs to resell them with a salvage title. The bidding for those cars is much more intense given the demand by rental car companies for stock, any stock, to boost their fleets.
Well, the thing about flood-cars is they can look and drive fine but really merit being called totalled - having been submerged makes corrosion inevitable in a much quicker time frame. All of the electrical parts will go bad in X time frame.
Maybe these can be kept going long enough to bring value to companies but it seems like you'll have a lot more car renters on the side of the road than normal.
"Water can ruin electronics, lubricants, and mechanical systems. It may take months or years, but corrosion can find its way to the car's vital electronics, including airbag controllers."
https://www.consumerreports.org/buying-a-car/beware-the-floo...