How much to realistically budget for a "good" used car in Canada?
April 18, 2021 1:05 PM Subscribe
I'm about to start seriously researching and looking into purchasing a new used car for myself, but after looking at listings to get ideas, I'm really not sure how much should I budget for a "good" used car? Am I better off just purchasing a new low-end car?
After asking a question about used makes/models last year, I'm just starting to actually research what I want and I've been looking at cars posted online (on Kijiji, specifically) and I'm just not sure how much money is realistic to spend on a used car.
After thinking about it, I can make up to $15,000 work. That's not a problem. Can this amount of money even get me a decent used car in Canada? From the ads I'm seeing, I'm not so sure.
Half of the ads *seem* great until I notice things like super high mileage (much higher than the current 2007 vehicle I am driving!). Or that the car is rebuilt (not sure exactly what that means in terms of cars, but it does not sound promising!!). How do I even find a decent used car? Something seems to be wrong with every one listed! Is there somewhere else to look aside from Kijiji? What expectations should I have?
After asking a question about used makes/models last year, I'm just starting to actually research what I want and I've been looking at cars posted online (on Kijiji, specifically) and I'm just not sure how much money is realistic to spend on a used car.
After thinking about it, I can make up to $15,000 work. That's not a problem. Can this amount of money even get me a decent used car in Canada? From the ads I'm seeing, I'm not so sure.
Half of the ads *seem* great until I notice things like super high mileage (much higher than the current 2007 vehicle I am driving!). Or that the car is rebuilt (not sure exactly what that means in terms of cars, but it does not sound promising!!). How do I even find a decent used car? Something seems to be wrong with every one listed! Is there somewhere else to look aside from Kijiji? What expectations should I have?
I don’t know Canada but in the US $12,000 (rough conversion) could absolutely get you a reasonable, reliable “box on wheels,” as you described it in your earlier question.
You currently drive an Altima. Comparables are the Corrola, Civic, Mazda3, Elantra, Forte, and a few others not worth discussing if what you want is a reliable box on wheels. Heck, another Altima would be fine. They’re all quite similar in most respects. You want the best combination of mileage, age, condition, maintenance history, single owner preferred, etc. you can find for your budget. A search in upstate NY on autotrader shows me 2013-14 runs of those models with 70-100k miles, or 2015-17 versions with 100-150k miles. Any of those cars should make it to 150k no problem IF WELL MAINTAINED. Rust is also a regional factor to consider.
You can go down to subcompacts and get lower mileage or newer metal for that budget. Honda Fit, Mazda2 (in Canada), Toyota Yaris, all good cars. Nissan and Hyundai offerings less so in my opinion.
Whatever you buy, you must have a prepurchase inspection as part of the deal. Never buy a used car without that. CarFax is useless. Pure marketing BS. You want the actual maintenance records if available (often they are in a private sale). And finally do NOT consider a “rebuilt” titled car. Those have been totaled by an insurance company for major damage in most cases, then “salvaged” and recertified as “rebuilt” or “salvage” titled cars. There are endless nightmare stories out there. Just don’t risk it. Also harder to insure such cars in the US.
I follow several auto forums with lots of Canadian members and my impression is that cars cost a little more there than here, but not dramatically so.
posted by spitbull at 3:22 PM on April 18, 2021 [3 favorites]
You currently drive an Altima. Comparables are the Corrola, Civic, Mazda3, Elantra, Forte, and a few others not worth discussing if what you want is a reliable box on wheels. Heck, another Altima would be fine. They’re all quite similar in most respects. You want the best combination of mileage, age, condition, maintenance history, single owner preferred, etc. you can find for your budget. A search in upstate NY on autotrader shows me 2013-14 runs of those models with 70-100k miles, or 2015-17 versions with 100-150k miles. Any of those cars should make it to 150k no problem IF WELL MAINTAINED. Rust is also a regional factor to consider.
You can go down to subcompacts and get lower mileage or newer metal for that budget. Honda Fit, Mazda2 (in Canada), Toyota Yaris, all good cars. Nissan and Hyundai offerings less so in my opinion.
Whatever you buy, you must have a prepurchase inspection as part of the deal. Never buy a used car without that. CarFax is useless. Pure marketing BS. You want the actual maintenance records if available (often they are in a private sale). And finally do NOT consider a “rebuilt” titled car. Those have been totaled by an insurance company for major damage in most cases, then “salvaged” and recertified as “rebuilt” or “salvage” titled cars. There are endless nightmare stories out there. Just don’t risk it. Also harder to insure such cars in the US.
I follow several auto forums with lots of Canadian members and my impression is that cars cost a little more there than here, but not dramatically so.
posted by spitbull at 3:22 PM on April 18, 2021 [3 favorites]
This is also a terrible time to be looking for a late model used car, by the way. Huge demand during and coming out of the pandemic, combined with interrupted new car production, and many people buying first cars, means prices are up as much as 20% in some segments (SUV and pickup trucks especially) everywhere.
If you can possibly limp the old beater a few more months it should get better. Maybe.
posted by spitbull at 3:26 PM on April 18, 2021 [1 favorite]
If you can possibly limp the old beater a few more months it should get better. Maybe.
posted by spitbull at 3:26 PM on April 18, 2021 [1 favorite]
Response by poster: ^ Oh yes, I think my Altima will be able to make it for a little while longer! I was just starting to seriously begin the process of looking (even deciding on a few make/models to look for).
Mechanically the Altima is fine, but it's cosmetically damaged from being sideswiped last year. It has a crack on the rear panel that appears to be spreading, which concerns me (it looks relatively large to me, eek!). I'm not sure if it's possible to "cheaply" patch up something like while I wait out the car market. (That's a separate question for another day!).
posted by VirginiaPlain at 3:31 PM on April 18, 2021 [1 favorite]
Mechanically the Altima is fine, but it's cosmetically damaged from being sideswiped last year. It has a crack on the rear panel that appears to be spreading, which concerns me (it looks relatively large to me, eek!). I'm not sure if it's possible to "cheaply" patch up something like while I wait out the car market. (That's a separate question for another day!).
posted by VirginiaPlain at 3:31 PM on April 18, 2021 [1 favorite]
I’d completely consider getting a body shop to replace that panel. You’ll make it back in resale value. Find a place that will do it with salvaged parts. If it’s mechanically otherwise fine, your best move is always not to play. Keep driving it until it is actually expensive to maintain. It’s just a box on wheels.
posted by spitbull at 5:55 PM on April 18, 2021
posted by spitbull at 5:55 PM on April 18, 2021
Also as a unibody car, a “spreading crack” is not a good thing to ignore. Get an estimate from a body shop. Make sure the car is actually structurally sound.
posted by spitbull at 5:57 PM on April 18, 2021
posted by spitbull at 5:57 PM on April 18, 2021
No, you are not better off purchasing a new low-end car. For your stated car buying goals, that would cost extra money that will not add to your safety or satisfaction. Yes, you can buy a safe, clean, low-mileage one- or two- owner car for Canadian $10,000 to $15,000, which I convert as US $8,000 to $12,000.
If your Altima is still mobile, now is a good time to see what kind of a car you would like that is a little more than a mobile box on wheels. Do you prefer a Honda CRV-type vehicle to stash things in the back? A vehicle with a little higher stance like a Ford Escape? A sedan-type vehicle? Do you prefer the way the dash is arranged in any particular brand of vehicle? Would you like to have those heated seats people in colder climes rave about?
You could search Edmunds.com for vehicle info and likely prices. In the US, $10,000 will get you a medium size car/SUV with 80,000 or fewer miles, one or two owners, good maintenance with records of major repairs and tires, no major accidents, clean title, no smoking in the vehicle. Perhaps a 2015 Ford Escape.
If you are not a car person, and it seems you are not, you should limit your search to vehicles from 2015 forward. A 2015 model is almost a seven-year-old car. Even older cars can be low mileage if not driven much, but older cars have their own problems with belts aging, and such, that you won't want to deal with.
Here are a few tips:
1. When buying a used car, buy the model with the highest trim level. It adds almost nothing to the price to get the extra luxury. Also, folks who had the money to buy the highest trim level tend have had the funds to maintain the car.
2. Pick out several models of cars that you would be willing to buy if they came within your price range with the right characteristics. Also, name the brands of cars you will reject at any price (because you don't like the dash, the car is ugly, etc.)
3. Avoid luxury brands. You can't afford to maintain a Mercedes.
4. Be absolutely ruthless in rejecting out of hand, on the phone before you see it, any car that has:
a. been smoked in;
b. been in a major accident;
c. a less than pristine title;
d. more than two prior owners;
e. more than the mileage you set as your maximum; or
f. an owner who will not allow an inspection by your mechanic of choice.
4. If you are buying from a private party, do your cash for car and title exchange at your bank. Use a cashier's check. Anything over $3,000 US needs to be done in the daytime, at a public place like a bank, DMV, mechanic's or police station. Do not even test drive private party cars except in the daytime in a public place with another friend or family member present.
5. You will pay a premium to buy at a dealer or Caravana-type place. Sometimes it is worth it to pay the premium to avoid the hassle of private party buys. Especially if the car comes with a rock-solid warranty.
6. Looking through the ads, you will see at least 75% are cars you would not want disguised as cars you might want. (Even Canada must have car sales scammers like here in the US. Sorry, Canada, I have always thought well of you and your citizens, but car sales scammers are the same everywhere.) Often dealers are the most egregious car scammers. If you discover a used car dealer is a scammer, never go back there.
7. Watch out for cars with strange smells that will only come out in force in the summertime. Spilled milk in a minivan doesn't smell much in the winter, but will make you gag in warm weather. Fish. That one fish that was still alive and jumped out of the cooler while we went in to eat. Never found it until it was too late. Need I say more?
8. Don't spend at the top of your budget. $10,000 US will get you a reliable, comfortable, possibly luxurious sedan. Save the rest for peace of mind on repairs, maintenance, and any other expense that might come up. Your insurance will be a little higher because it won't be liability only.
9. The sweet spots for mileage are 80,000 or less, and 120,000 or less. 80,000 is 20,000 miles from the expensive maintenance at 100,000 miles. 120,000 is after that expensive maintenance, and the price of the car will have dropped dramatically with that increased mileage. Look for a car you can drive for five years. What is your mileage per year? You don't want to drive the car into the ground, you want to sell it at around 160,000 or 175,000 miles and let someone else drive it into the ground. It is not safe for a non-car person to drive a car into the ground. You have to leave that to people who know cars, who fix cars, or who desperately need the option of a very cheap car to have transportation at all.
Just so you know my experience in this area, I have bought new cars. I have bought used cars. I was helped by a car guy to refine my technique for buying used cars. I can afford a new car, but I can't buy one because the new car smell makes me dizzy and sick to my stomach, so it is hard to drive one. A two-year-old car is fine, and two to seven years old is my sweet spot.
posted by KayQuestions at 6:08 PM on April 18, 2021 [4 favorites]
If your Altima is still mobile, now is a good time to see what kind of a car you would like that is a little more than a mobile box on wheels. Do you prefer a Honda CRV-type vehicle to stash things in the back? A vehicle with a little higher stance like a Ford Escape? A sedan-type vehicle? Do you prefer the way the dash is arranged in any particular brand of vehicle? Would you like to have those heated seats people in colder climes rave about?
You could search Edmunds.com for vehicle info and likely prices. In the US, $10,000 will get you a medium size car/SUV with 80,000 or fewer miles, one or two owners, good maintenance with records of major repairs and tires, no major accidents, clean title, no smoking in the vehicle. Perhaps a 2015 Ford Escape.
If you are not a car person, and it seems you are not, you should limit your search to vehicles from 2015 forward. A 2015 model is almost a seven-year-old car. Even older cars can be low mileage if not driven much, but older cars have their own problems with belts aging, and such, that you won't want to deal with.
Here are a few tips:
1. When buying a used car, buy the model with the highest trim level. It adds almost nothing to the price to get the extra luxury. Also, folks who had the money to buy the highest trim level tend have had the funds to maintain the car.
2. Pick out several models of cars that you would be willing to buy if they came within your price range with the right characteristics. Also, name the brands of cars you will reject at any price (because you don't like the dash, the car is ugly, etc.)
3. Avoid luxury brands. You can't afford to maintain a Mercedes.
4. Be absolutely ruthless in rejecting out of hand, on the phone before you see it, any car that has:
a. been smoked in;
b. been in a major accident;
c. a less than pristine title;
d. more than two prior owners;
e. more than the mileage you set as your maximum; or
f. an owner who will not allow an inspection by your mechanic of choice.
4. If you are buying from a private party, do your cash for car and title exchange at your bank. Use a cashier's check. Anything over $3,000 US needs to be done in the daytime, at a public place like a bank, DMV, mechanic's or police station. Do not even test drive private party cars except in the daytime in a public place with another friend or family member present.
5. You will pay a premium to buy at a dealer or Caravana-type place. Sometimes it is worth it to pay the premium to avoid the hassle of private party buys. Especially if the car comes with a rock-solid warranty.
6. Looking through the ads, you will see at least 75% are cars you would not want disguised as cars you might want. (Even Canada must have car sales scammers like here in the US. Sorry, Canada, I have always thought well of you and your citizens, but car sales scammers are the same everywhere.) Often dealers are the most egregious car scammers. If you discover a used car dealer is a scammer, never go back there.
7. Watch out for cars with strange smells that will only come out in force in the summertime. Spilled milk in a minivan doesn't smell much in the winter, but will make you gag in warm weather. Fish. That one fish that was still alive and jumped out of the cooler while we went in to eat. Never found it until it was too late. Need I say more?
8. Don't spend at the top of your budget. $10,000 US will get you a reliable, comfortable, possibly luxurious sedan. Save the rest for peace of mind on repairs, maintenance, and any other expense that might come up. Your insurance will be a little higher because it won't be liability only.
9. The sweet spots for mileage are 80,000 or less, and 120,000 or less. 80,000 is 20,000 miles from the expensive maintenance at 100,000 miles. 120,000 is after that expensive maintenance, and the price of the car will have dropped dramatically with that increased mileage. Look for a car you can drive for five years. What is your mileage per year? You don't want to drive the car into the ground, you want to sell it at around 160,000 or 175,000 miles and let someone else drive it into the ground. It is not safe for a non-car person to drive a car into the ground. You have to leave that to people who know cars, who fix cars, or who desperately need the option of a very cheap car to have transportation at all.
Just so you know my experience in this area, I have bought new cars. I have bought used cars. I was helped by a car guy to refine my technique for buying used cars. I can afford a new car, but I can't buy one because the new car smell makes me dizzy and sick to my stomach, so it is hard to drive one. A two-year-old car is fine, and two to seven years old is my sweet spot.
posted by KayQuestions at 6:08 PM on April 18, 2021 [4 favorites]
We're in Ontario and only buy used cars - you can absolutely get a really good car for $15K, we paid $6500 for my pontiac vibe 7 years ago and it's still going strong (a 2005!) and we just paid about $11K for a 2010 mazda5, hoping to drive both into the ground.
We prioritize reliable makes and low mileage (less than 120 000)
It's very worthwhile to inspect the carfax or whatever report, people are sneaky and hide things like prior accidents or bought it on auction.
We bought the mazda from a dealer, you might have to broaden where you're buying from if you're in a hurry but basically narrow it down to a few models you're interested in and set up searches on marketplace and look at dealer pages frequently, then jump on one that meets your criteria. When a private seller is selling a good used low mileage car they go fast but it's possible to find one. I think because you're willing to pay above $8K you should be able to find something really nice, good luck!
posted by lafemma at 6:48 AM on April 19, 2021 [2 favorites]
We prioritize reliable makes and low mileage (less than 120 000)
It's very worthwhile to inspect the carfax or whatever report, people are sneaky and hide things like prior accidents or bought it on auction.
We bought the mazda from a dealer, you might have to broaden where you're buying from if you're in a hurry but basically narrow it down to a few models you're interested in and set up searches on marketplace and look at dealer pages frequently, then jump on one that meets your criteria. When a private seller is selling a good used low mileage car they go fast but it's possible to find one. I think because you're willing to pay above $8K you should be able to find something really nice, good luck!
posted by lafemma at 6:48 AM on April 19, 2021 [2 favorites]
A Pontiac Vibe is one of the sleeper deals of the century. It’s an indestructible Toyota Matrix under the ugly Pontiac dress. But it’s cheaper than a used Matrix because “Pontiac.” If you find a Vibe in decent shape with under 100k miles it’s a notoriously great choice.
posted by spitbull at 8:02 AM on April 19, 2021 [3 favorites]
posted by spitbull at 8:02 AM on April 19, 2021 [3 favorites]
Also to explain carfax: carfax reports show only accidents that were fixed under insurance at a reporting body shop. Even then it can miss some. Other than that, it tells you nothing about maintenance history, or DIY repairs, or work done by shady shops that don’t report.
Every buyer of a used car needs to understand the utter importance of having a PPI (pre-purchase inspection) by a mechanic. These typically run $100-200, and most dealerships will let you take the car out to a mechanic for a PPI. If they won’t, services exist to do PPI onsite. A seller who balks at a PPI is a *deal breaker.* Period. Unless you’re a mechanic yourself you do not know enough to do this yourself. Minimally you would need to pull computer diagnostic codes (which tell you far more about a car’s history than a carfax report ever will), which is something you can do yourself with a $50 OBDii scanner, but then you have to know what the numbers tell you. Compression check on the engine. Inspection of all major systems and rust evaluation too.
The $150 you spend can save you thousands. And even less major problems, once discovered, can help you negotiate a lower price. The PPI pays for itself.
There is no such thing as a used car that doesn’t need this, or that is completely problem free. No warranty replaces it. No return period either. Don’t do the inspection after buying the car. Many have been burned that way.
posted by spitbull at 8:08 AM on April 19, 2021 [2 favorites]
Every buyer of a used car needs to understand the utter importance of having a PPI (pre-purchase inspection) by a mechanic. These typically run $100-200, and most dealerships will let you take the car out to a mechanic for a PPI. If they won’t, services exist to do PPI onsite. A seller who balks at a PPI is a *deal breaker.* Period. Unless you’re a mechanic yourself you do not know enough to do this yourself. Minimally you would need to pull computer diagnostic codes (which tell you far more about a car’s history than a carfax report ever will), which is something you can do yourself with a $50 OBDii scanner, but then you have to know what the numbers tell you. Compression check on the engine. Inspection of all major systems and rust evaluation too.
The $150 you spend can save you thousands. And even less major problems, once discovered, can help you negotiate a lower price. The PPI pays for itself.
There is no such thing as a used car that doesn’t need this, or that is completely problem free. No warranty replaces it. No return period either. Don’t do the inspection after buying the car. Many have been burned that way.
posted by spitbull at 8:08 AM on April 19, 2021 [2 favorites]
Hint: people don’t sell perfectly fine used cars often or cheaply. The same reasons you want to replace yours are everyone else’s reasons too. Exception for lease returns.
I wouldn’t give a shit about a “clean carfax.” I’ve heard way too many horror stories about such cars having major unreported issues. An inspection is the real answer. Dealers love advertising “clean carfax” and are happy to show you the report. Guess why? The are sharks.
Private sellers are always preferable to me. But those cars need inspections too.
posted by spitbull at 8:14 AM on April 19, 2021 [3 favorites]
I wouldn’t give a shit about a “clean carfax.” I’ve heard way too many horror stories about such cars having major unreported issues. An inspection is the real answer. Dealers love advertising “clean carfax” and are happy to show you the report. Guess why? The are sharks.
Private sellers are always preferable to me. But those cars need inspections too.
posted by spitbull at 8:14 AM on April 19, 2021 [3 favorites]
Response by poster: ^ Maybe I’m misunderstanding your answers, spitball, but I think based on everything you’ve said. I’ll scrape together another $10k to buy a lower end new car.
posted by VirginiaPlain at 12:05 PM on April 19, 2021 [1 favorite]
posted by VirginiaPlain at 12:05 PM on April 19, 2021 [1 favorite]
A word about used car dealers - the ones in smaller communities that have been around a while are usually more trustworthy than big city/suburban used car dealers - they value their reputation in areas where word-of-mouth matters more.
posted by Jessica Savitch's Coke Spoon at 12:07 PM on April 19, 2021 [1 favorite]
posted by Jessica Savitch's Coke Spoon at 12:07 PM on April 19, 2021 [1 favorite]
2007-2010 Hyundai Sonatas/Elantras are pretty much bulletproof and get great gas mileage. Be weary of later models though - quality went down hill significantly with the adoption of the Theta engine.
posted by Jessica Savitch's Coke Spoon at 12:12 PM on April 19, 2021
posted by Jessica Savitch's Coke Spoon at 12:12 PM on April 19, 2021
Hey VirginiaPlain, that can make a ton of sense of you buy sensibly and plan to maintain and keep the car for at least 7 and ideally 10 or more years. If you do so the initial depreciation hit of a new car is amortized over a much longer period than for most people who buy cars more often, and if you start with a new car, you know exactly how well it was maintained because you are religious about it. NOTHING matters more now (more than the brand of car, in my view) to longevity and reliability than routine maintenance. Cars are across the board — better, safer, and more reliable every single year. A new car has the latest safety features and a lengthy warranty. And if you finance a car, at the moment interest rates are super low for borrowers with decent credit, and cars (as opposed to CUV/SUV/trucks) are not selling nearly as well.
Ergo you can probably get a brand new Hyundai Elantra for $22k or even less in a more basic trim, with a TEN YEAR powertrain warranty for the original owner (you), and follow the recommended maintenance schedule and expect it to last at least a decade and likely much longer. And pay little for the money you borrow. There are 0-2% deals out there. That’s lower than inflation. It’s free money.
My theory is it costs about $2500-3000 a year to own a reliable car, exclusive of fuel and insurance and registration and such. You can either spent 22k up front and average that over 10 years, or you can buy a used car for half that and make up for it it deferred maintenance and significant repairs. Most cars need a great deal of rather expensive but still routine maintenance items at 100k. It’s a big reason people sell cars as they reach that mileage.
The reason not to buy a new car is you are buying the steep initial depreciation of the first few years. Keep it a decade and that becomes meaningless. You get a lot for the extra price of a new car, and peace of mind has a value. As does a long warranty. And you get to pick the color and options you want. A new car will be safer and more fuel efficient than even a slightly older car, almost always.
Don’t buy any extended warranty products or dealer add ons. None of it. Refuse it all.
I myself own a 2014 90k Japanese compact I bought with cash, that I love dearly (a Mazda3). And a 1998 pickup truck with over 200k that I bought used as the third owner (from a fellow mefite!). I work on them myself so it’s a bit different, but I can tell you that 7 years into ownership my once new car is nearly perfect and the depreciation hit has long faded into the resale value enhanced by my having receipts for every single thing I’ve ever done to it, because I’m obsessive about mechanical longevity. I also love the old truck. I paid virtually nothing for it and it runs like a top at 23 years old. I’ve owned a driven lots of cars and I advise a lot of friends about their purchases as the “car guy” they know. I often suggest just buying a new car even though they’ve heard the conventional good advice that you should never do that.
You should buy the best car you can afford that meets your needs and no more, maintain it like a freak, take care of its paint and its interior, drive it carefully, and keep it until the repair bills start to mount above $2000 a year.
There is no such thing as a used car with more than a few thousand miles that is as good as a new car. By definition. They’re machines that drive on concretes in all weather. The very best of them still wear out.
You know what you can afford but in reality a good car costs a few grand a year to own at the lowest end of the cost spectrum. You can spend it up front and drive the car you like best or spend it over time at the mechanic shop. Or both, with the latter deferred a decade, which is what long-term ownership entails.
You already have shown you can keep a car a long time and don’t mind an older more beat up car. So a new car you keep until it’s old makes sense to me.
posted by spitbull at 2:19 PM on April 19, 2021 [3 favorites]
Ergo you can probably get a brand new Hyundai Elantra for $22k or even less in a more basic trim, with a TEN YEAR powertrain warranty for the original owner (you), and follow the recommended maintenance schedule and expect it to last at least a decade and likely much longer. And pay little for the money you borrow. There are 0-2% deals out there. That’s lower than inflation. It’s free money.
My theory is it costs about $2500-3000 a year to own a reliable car, exclusive of fuel and insurance and registration and such. You can either spent 22k up front and average that over 10 years, or you can buy a used car for half that and make up for it it deferred maintenance and significant repairs. Most cars need a great deal of rather expensive but still routine maintenance items at 100k. It’s a big reason people sell cars as they reach that mileage.
The reason not to buy a new car is you are buying the steep initial depreciation of the first few years. Keep it a decade and that becomes meaningless. You get a lot for the extra price of a new car, and peace of mind has a value. As does a long warranty. And you get to pick the color and options you want. A new car will be safer and more fuel efficient than even a slightly older car, almost always.
Don’t buy any extended warranty products or dealer add ons. None of it. Refuse it all.
I myself own a 2014 90k Japanese compact I bought with cash, that I love dearly (a Mazda3). And a 1998 pickup truck with over 200k that I bought used as the third owner (from a fellow mefite!). I work on them myself so it’s a bit different, but I can tell you that 7 years into ownership my once new car is nearly perfect and the depreciation hit has long faded into the resale value enhanced by my having receipts for every single thing I’ve ever done to it, because I’m obsessive about mechanical longevity. I also love the old truck. I paid virtually nothing for it and it runs like a top at 23 years old. I’ve owned a driven lots of cars and I advise a lot of friends about their purchases as the “car guy” they know. I often suggest just buying a new car even though they’ve heard the conventional good advice that you should never do that.
You should buy the best car you can afford that meets your needs and no more, maintain it like a freak, take care of its paint and its interior, drive it carefully, and keep it until the repair bills start to mount above $2000 a year.
There is no such thing as a used car with more than a few thousand miles that is as good as a new car. By definition. They’re machines that drive on concretes in all weather. The very best of them still wear out.
You know what you can afford but in reality a good car costs a few grand a year to own at the lowest end of the cost spectrum. You can spend it up front and drive the car you like best or spend it over time at the mechanic shop. Or both, with the latter deferred a decade, which is what long-term ownership entails.
You already have shown you can keep a car a long time and don’t mind an older more beat up car. So a new car you keep until it’s old makes sense to me.
posted by spitbull at 2:19 PM on April 19, 2021 [3 favorites]
I will say the one thing to be cautious of is that your needs can change in a decade, especially if you build a family. Lots of people end up having to change cars sooner than they thought for that reason. It can make sense to factor in likely future needs as you get into newer or new cars. Selling before year 7 or so is likely to be at a significant loss.
posted by spitbull at 2:28 PM on April 19, 2021 [1 favorite]
posted by spitbull at 2:28 PM on April 19, 2021 [1 favorite]
Also to add in the current covid-crazy market, used car prices are really elevated. Late model used car to new car of the same model is a narrower delta than usual. Production delays on new cars have also pushed sales of late model used.
Top that off with sedans and coupes being rapidly deprecated and out of fashion and the gap narrows even further as many such cars are more discounted than the same makers’ CUV/SUV lineup.
This is definitely a time to consider a new compact or midsized sedan if you can swing it financially.
posted by spitbull at 4:14 PM on April 19, 2021 [1 favorite]
Top that off with sedans and coupes being rapidly deprecated and out of fashion and the gap narrows even further as many such cars are more discounted than the same makers’ CUV/SUV lineup.
This is definitely a time to consider a new compact or midsized sedan if you can swing it financially.
posted by spitbull at 4:14 PM on April 19, 2021 [1 favorite]
Spitbull has great answers. It may be that buying a new car you keep for ten years will be best for you financially. He is a car guy and the advice of car guys is more valuable than the advice of drivers schooled by car guys. If you are not bothered by the new car smell, a new car with a manufacturer's warranty is a peace of mind gift to yourself and yours. A new, reliable make and model car, with a warranty, may be worth the initial cost to you. As he says, a midsized sedan or compact are the best buys right now. "How long are you going to keep this car?" is a key question for your purchasing decisions. Are you willing to go toe to toe with a dealer to get the best price on a new car? (Spitbull might have some advice on how to get the best price from a new car dealer with less pain.)
It is tough to buy a two to seven year old used car. So many decisions, so many scammers trying to hide accidents or flood damage or whatever. It is tough to buy a new car from a dealer. So many "I have to talk to my manager" scams to raise the price. Unless you have unlimited funds, either path is stressful. I wish you the best in making your financial and safety decisions about this next car.
posted by KayQuestions at 7:34 PM on April 19, 2021 [1 favorite]
It is tough to buy a two to seven year old used car. So many decisions, so many scammers trying to hide accidents or flood damage or whatever. It is tough to buy a new car from a dealer. So many "I have to talk to my manager" scams to raise the price. Unless you have unlimited funds, either path is stressful. I wish you the best in making your financial and safety decisions about this next car.
posted by KayQuestions at 7:34 PM on April 19, 2021 [1 favorite]
Thank you KayQuestions...
I do not have the best advice on buying new cars. Like most people I’ve only done it a couple of times and car salesmen do it all day, every day. They are going to be hip to every trick. They’re sharks by nature. Never trust any of them, local small town or not. Really. They can smell a mark who thinks they’re smarter than average. I know because I was in sales of an expensive luxury product many years ago. We learned the same psychological tricks, and they’re insidious.
The internet is full of such advice, but I follow a Jalopnik writer named Tom McParland for car buying guidance. He’s a professional broker who buys new cars (and used ones) for clients for a modest fee. He does it every day and deals with dealers all over the US. He too will tell you never to trust them. His columns add up to excellent schooling on the subject.
Main rules: get written quotes online before you ever show up in person. Refuse to deal with dealers who play coy about this. Widen your shopping area as much as possible. Obtain financing before you shop from a credit union or bank. Or if you finance through a dealer only do so if there is an exceptional promotional rate.
Never lease as a private party. Never ever buy extended warranties or glass/tire/paint/key fob coverage. Pure profit for dealers you never get back. No coatings or rust treatments either. All of that can be done cheaper and better elsewhere and most of it is bullshit. If you are paying cash, do *not* reveal that to the dealer up front or until you have a price negotiated. Dealers hate cash buyers. They make their best money on financing. They will go lower on price if they thing there’s a chance they can get the financing business. Some folks finance to get this price then pay the loan right off as soon as the deal is closed.
The best rule of thumb is that it is an adversarial transaction. Do not relax your guard. Say no to everything extra. Never trust a salesman to be looking out for your interests, really. Never.
And if the car isn’t brand spanking new with under 100 miles on it, you absolutely MUST HAVE a prepurchase inspection done by a mechanic of YOUR choice. Never ever believe a dealer about ownership or maintenance history on a used car. A carfax report is close to meaningless. All dealers get most of their used cars from the same auction stock, they don’t know the history either. Also, “certified pre-owned” is almost always a total scam. Don’t fall for it. If you can possibly buy a used car privately, even better from someone you know well enough to trust, that is always going to be a far better deal and you’ll be negotiating with a non-professional, which is easier. Beware though that many “private” sale used cars are actually dealers playing another game.
High red alert for dishonesty and tricks is the only smart way to shop. Auto dealers are not working for you.
posted by spitbull at 5:24 AM on April 21, 2021 [1 favorite]
I do not have the best advice on buying new cars. Like most people I’ve only done it a couple of times and car salesmen do it all day, every day. They are going to be hip to every trick. They’re sharks by nature. Never trust any of them, local small town or not. Really. They can smell a mark who thinks they’re smarter than average. I know because I was in sales of an expensive luxury product many years ago. We learned the same psychological tricks, and they’re insidious.
The internet is full of such advice, but I follow a Jalopnik writer named Tom McParland for car buying guidance. He’s a professional broker who buys new cars (and used ones) for clients for a modest fee. He does it every day and deals with dealers all over the US. He too will tell you never to trust them. His columns add up to excellent schooling on the subject.
Main rules: get written quotes online before you ever show up in person. Refuse to deal with dealers who play coy about this. Widen your shopping area as much as possible. Obtain financing before you shop from a credit union or bank. Or if you finance through a dealer only do so if there is an exceptional promotional rate.
Never lease as a private party. Never ever buy extended warranties or glass/tire/paint/key fob coverage. Pure profit for dealers you never get back. No coatings or rust treatments either. All of that can be done cheaper and better elsewhere and most of it is bullshit. If you are paying cash, do *not* reveal that to the dealer up front or until you have a price negotiated. Dealers hate cash buyers. They make their best money on financing. They will go lower on price if they thing there’s a chance they can get the financing business. Some folks finance to get this price then pay the loan right off as soon as the deal is closed.
The best rule of thumb is that it is an adversarial transaction. Do not relax your guard. Say no to everything extra. Never trust a salesman to be looking out for your interests, really. Never.
And if the car isn’t brand spanking new with under 100 miles on it, you absolutely MUST HAVE a prepurchase inspection done by a mechanic of YOUR choice. Never ever believe a dealer about ownership or maintenance history on a used car. A carfax report is close to meaningless. All dealers get most of their used cars from the same auction stock, they don’t know the history either. Also, “certified pre-owned” is almost always a total scam. Don’t fall for it. If you can possibly buy a used car privately, even better from someone you know well enough to trust, that is always going to be a far better deal and you’ll be negotiating with a non-professional, which is easier. Beware though that many “private” sale used cars are actually dealers playing another game.
High red alert for dishonesty and tricks is the only smart way to shop. Auto dealers are not working for you.
posted by spitbull at 5:24 AM on April 21, 2021 [1 favorite]
Let me just explain the math with a personal example. I bought a new Mazda3 in 2014 for $26K out the door (loaded top end model, added about $4500 to the base price), paid in cash on the barrelhead. It now has 90K miles and is in excellent condition, so I could sell it for about $11K. Therefore the initial purchase price has depreciated by 15k over 7 years, or a little more than $2k a year. But remember the first $5000 of that was in the first 2 years, it slows down and evens out after that.
The only *repairs* it has needed (as opposed to maintenance) include a wheel bearing ($250, a job I'd rather not do myself), and a seized brake caliper ($100, my guy actually machined a part we couldn't get fast and it's still working great a year and a half and 10K miles later). It also had a few things done under its (3 year) warranty - a new battery, some repaired rubber trim, a replacement rear view mirror.
I have spent an average of $500 a year on maintenance, but I do my own fluid and filter changes. It hasn't needed any belts or hoses. Most of that cost is tires (but I like fresh, expensive tires and also have snow tires, so it would be lower for most drivers who could tolerate less than an $800 tire package every 5 years), and one transmission fluid swap I didn't feel like doing myself, brake pads and rotors, and maybe my DIY stuff adds another $250 in value. So let's call it $750 a year in maintenance roughly. The average also includes one professional detailing and my extensive collection of car wash supplies.
That brings my costs before fuel, insurance, registration, annual inspections, and taxes (remember you pay a sales or excise tax or both on any car purchase, used or new, and it ain't small in most state) to about $2750 a year, exactly the mid-point of my rough estimate above that it costs $2500-3000 a year to own a nice, reliable car, whether purchased used or new.
She's about to hit 100K, which will mean new tires, new brakes, new struts and shocks for the first time, possibly some front end components (tie rod bushings are looking worn to me), fluid exchanges on the brake and transmission systems, and belts and hoses. That is about a $2500 hit all in, maybe a little more. Based on the rest of her condition, that should get me easily to 200k, however. The motor and transmission are rock solid and still run like new. The interior and paint are decent enough to go that distance. Steering is impeccable. Fuel mileage is exactly as good as the day I bought it. Oil still comes out clean after 5000 miles and the motor never uses a drop of it in between. Only some surface rust on the exhaust system, the body otherwise rust free. Some wonky interior things -- main one is the rear power window actuators can be finicky and sometimes quit or go very slow, but that's DIY for me. And a notorious issue for Mazdas of a certain age anyway.
Sorry to go on but I want to paint a picture of the costs of car ownership that underlies my main point. EXPECT to spend an average of $2000 a year, at a minimum, to own and maintain a reliable car. If you look at it that way -- average total cost of ownership over time -- the scary "initial depreciation hit" (or as car people tend to say "the moment you drive it off the lot") loses its sting. You could have bought a 5 year old car instead, and then the big maintenance items and repair bills would kick in 5 years earlier. It's a wash. In the end you own the car you own, with the mileage it has, and the condition it's in. It's worth the same as any other car that matches the same description. The only question is how much it has cost you to own it so far.
This leaves aside financing. Where the vast majority of people are poorly advised to buy a new car is where they do not have the funds to spend even $2000-3000 a year to own a car, yet keep buying a new car every 5 years or fewer. Over time, they end up upside down on their loans because they are paying for initial depreciation every time they trade it in, rolling the previous hit into the new one. Read reddit's r/personalfinance sub for endless stories about this and strategies for avoiding it. If you have to drive a beater, or a less reliable, or uglier, or less sophisticated or prestigious car because that is the best you can afford or you're happy enough to risk the potential downsides of that (a higher chance of being stranded and encountering major mechanical problems, especially) or because you want to save on insurance (remember that any car worth more than you can afford to replace needs to have fairly expensive collision and comprehensive coverage pegged to its book value, so a beater can be a big insurance savings), or you know a lot about cars and can manage mechanical problems as they arise yourself and cheaply, and also know which ones are minor and which ones are potentially dangerous to ignore, which is super damn important for anyone who owns an older car to get right.
There is no secret cheap way to own a reliable car. That's a lesson I've internalized well after over 40 years of driving and loving cars.
I should mention I have loved the Mazda as much as all but one other vehicle I've owned (which was also a Mazda, albeit a truck). It's a hoot to drive. It's never ever let me down. It's great on my mountainside in snow. It gets 40mpg on the highway easily. It can carry my band's entire PA system too. I am very very happy to have bought it brand new, taken babying care of it myself, and now growing old with it. I regret nothing.
posted by spitbull at 6:15 AM on April 21, 2021 [1 favorite]
The only *repairs* it has needed (as opposed to maintenance) include a wheel bearing ($250, a job I'd rather not do myself), and a seized brake caliper ($100, my guy actually machined a part we couldn't get fast and it's still working great a year and a half and 10K miles later). It also had a few things done under its (3 year) warranty - a new battery, some repaired rubber trim, a replacement rear view mirror.
I have spent an average of $500 a year on maintenance, but I do my own fluid and filter changes. It hasn't needed any belts or hoses. Most of that cost is tires (but I like fresh, expensive tires and also have snow tires, so it would be lower for most drivers who could tolerate less than an $800 tire package every 5 years), and one transmission fluid swap I didn't feel like doing myself, brake pads and rotors, and maybe my DIY stuff adds another $250 in value. So let's call it $750 a year in maintenance roughly. The average also includes one professional detailing and my extensive collection of car wash supplies.
That brings my costs before fuel, insurance, registration, annual inspections, and taxes (remember you pay a sales or excise tax or both on any car purchase, used or new, and it ain't small in most state) to about $2750 a year, exactly the mid-point of my rough estimate above that it costs $2500-3000 a year to own a nice, reliable car, whether purchased used or new.
She's about to hit 100K, which will mean new tires, new brakes, new struts and shocks for the first time, possibly some front end components (tie rod bushings are looking worn to me), fluid exchanges on the brake and transmission systems, and belts and hoses. That is about a $2500 hit all in, maybe a little more. Based on the rest of her condition, that should get me easily to 200k, however. The motor and transmission are rock solid and still run like new. The interior and paint are decent enough to go that distance. Steering is impeccable. Fuel mileage is exactly as good as the day I bought it. Oil still comes out clean after 5000 miles and the motor never uses a drop of it in between. Only some surface rust on the exhaust system, the body otherwise rust free. Some wonky interior things -- main one is the rear power window actuators can be finicky and sometimes quit or go very slow, but that's DIY for me. And a notorious issue for Mazdas of a certain age anyway.
Sorry to go on but I want to paint a picture of the costs of car ownership that underlies my main point. EXPECT to spend an average of $2000 a year, at a minimum, to own and maintain a reliable car. If you look at it that way -- average total cost of ownership over time -- the scary "initial depreciation hit" (or as car people tend to say "the moment you drive it off the lot") loses its sting. You could have bought a 5 year old car instead, and then the big maintenance items and repair bills would kick in 5 years earlier. It's a wash. In the end you own the car you own, with the mileage it has, and the condition it's in. It's worth the same as any other car that matches the same description. The only question is how much it has cost you to own it so far.
This leaves aside financing. Where the vast majority of people are poorly advised to buy a new car is where they do not have the funds to spend even $2000-3000 a year to own a car, yet keep buying a new car every 5 years or fewer. Over time, they end up upside down on their loans because they are paying for initial depreciation every time they trade it in, rolling the previous hit into the new one. Read reddit's r/personalfinance sub for endless stories about this and strategies for avoiding it. If you have to drive a beater, or a less reliable, or uglier, or less sophisticated or prestigious car because that is the best you can afford or you're happy enough to risk the potential downsides of that (a higher chance of being stranded and encountering major mechanical problems, especially) or because you want to save on insurance (remember that any car worth more than you can afford to replace needs to have fairly expensive collision and comprehensive coverage pegged to its book value, so a beater can be a big insurance savings), or you know a lot about cars and can manage mechanical problems as they arise yourself and cheaply, and also know which ones are minor and which ones are potentially dangerous to ignore, which is super damn important for anyone who owns an older car to get right.
There is no secret cheap way to own a reliable car. That's a lesson I've internalized well after over 40 years of driving and loving cars.
I should mention I have loved the Mazda as much as all but one other vehicle I've owned (which was also a Mazda, albeit a truck). It's a hoot to drive. It's never ever let me down. It's great on my mountainside in snow. It gets 40mpg on the highway easily. It can carry my band's entire PA system too. I am very very happy to have bought it brand new, taken babying care of it myself, and now growing old with it. I regret nothing.
posted by spitbull at 6:15 AM on April 21, 2021 [1 favorite]
My math above doesn't factor in the externality of inflation, by the way, or regional differences in how cars age. Inflation can offset depreciation by several percentage points, lower the cost of financing over time, and keep the resale value of your older car higher than it would have been (the pandemic would make my car worth $1000-1500 more today than it was last year at this time, in fact, as demand is so strong for $12K reliable cars right now).
Regional differences matter: if you live where rust is an issue, in snow country as I do, or sea spray and salt air, you can expect that to shorten the life of any vehicle you buy. Modern cars are MUCH better about rust prevention than they used to be -- much more plastic, much more galvanized metal. But it still comes for every piece of steel on earth. And faster when there's salt being sprayed all over the metal in question for three months every year. You can defer this with rust treatments and careful washing during winter months or all year if you live by the ocean. But it's a fact.
However I don't think any modern car will rust out at 10 years old anywhere. Right now I'm seeing incurable rust on 2003 and earlier cars (I shop the used car market around me all the time for fun, looking for needles in the haystack, cough an RX-7 I can afford, and elderly pickup trucks with patina), and I live in New England. So I'd be pretty confident about any new car making it 20 years without rust being the killer factor these days.
posted by spitbull at 6:29 AM on April 21, 2021 [1 favorite]
Regional differences matter: if you live where rust is an issue, in snow country as I do, or sea spray and salt air, you can expect that to shorten the life of any vehicle you buy. Modern cars are MUCH better about rust prevention than they used to be -- much more plastic, much more galvanized metal. But it still comes for every piece of steel on earth. And faster when there's salt being sprayed all over the metal in question for three months every year. You can defer this with rust treatments and careful washing during winter months or all year if you live by the ocean. But it's a fact.
However I don't think any modern car will rust out at 10 years old anywhere. Right now I'm seeing incurable rust on 2003 and earlier cars (I shop the used car market around me all the time for fun, looking for needles in the haystack, cough an RX-7 I can afford, and elderly pickup trucks with patina), and I live in New England. So I'd be pretty confident about any new car making it 20 years without rust being the killer factor these days.
posted by spitbull at 6:29 AM on April 21, 2021 [1 favorite]
Sorry to pepper this thread but maybe it will be a resource for others to have this thinking laid out. I took a long time and made plenty of mistakes along the way, and owned plenty of dreadful and expensive bad choice vehicles, so I’ve really thought a lot about this as I’ve advised so many people (especially during the pandemic) I care about on buying vehicles.
I did neglect another factor in total cost of ownership, which is the time value of your money and the money value of your time. Right now it can make sense to finance a brand new car even if you can easily pay cash because a) you’ll likely get a lower final out the door price and b) interest rates are really low and you can get lower rates on new cars than used ones that can almost cover the delta between used and new prices if you need to finance that large a number, seriously. You can get special rates for good credit or customer loyalty etc from many reliable brands on their slower selling vehicles (sedans!!) that are as low as zero percent or often 1 or 2 percent.
Inflation is likely to easily exceed 2% over the next several years. And abstractly over time it has historically been possible to average close to 4-5% a year just being invested in an index fund. If you have 20k in cash, a long investment horizon for retirement or whatever, and can get a 1% loan if you finance 20k of a car’s price, usually over 3 years for the best rates (picture 500-700 a month payments, not the lowball long term high interest monthly payments they advertise and salescrooks start you down the primrose path of “how much a month are you comfortable paying?” BS), and that 20k earns 4% a year in stocks over the same period (or in fact and more predictably a longer period, minus inflation), you can do the simple math yourself: you’re making money on borrowed money.
There are other complex factors beyond describing here (insurance costs, market volatility, credit weight of the debt) but they are marginally important in most cases. The economy is in uncharted territory. Risk is always there.
The opposite issue is rarely considered: a car that breaks down or needs a lot of time in the shop or that you work on yourself a lot costs you hours and hours of time over the years. Would that time have value to you that would be worth paying for in advance by buying a newer or more reliable car? Hell yes, is my view. YMMV. And I LIKE having rust flakes rain down on my face while I curse at a frozen bolt I’ve just cut my hand on.
Total. Cost. Of. Ownership. It’s a mantra for me. You get what you pay for ans you pay for what you get. Quality is usually worth a premium if it’s real and if the item in question is mission critical to your health, income, freedom, or safety, all of which vehicles often are. If there were cheap ways to beat the system without just getting lucky or being very, very informed (like you’re a pro mechanic), there’s no shortcut someone hasn’t tried, or that sellers won’t anticipate. Price is only one way of looking at TCO. And it can be a very bad predictor.
posted by spitbull at 8:59 AM on April 21, 2021 [1 favorite]
I did neglect another factor in total cost of ownership, which is the time value of your money and the money value of your time. Right now it can make sense to finance a brand new car even if you can easily pay cash because a) you’ll likely get a lower final out the door price and b) interest rates are really low and you can get lower rates on new cars than used ones that can almost cover the delta between used and new prices if you need to finance that large a number, seriously. You can get special rates for good credit or customer loyalty etc from many reliable brands on their slower selling vehicles (sedans!!) that are as low as zero percent or often 1 or 2 percent.
Inflation is likely to easily exceed 2% over the next several years. And abstractly over time it has historically been possible to average close to 4-5% a year just being invested in an index fund. If you have 20k in cash, a long investment horizon for retirement or whatever, and can get a 1% loan if you finance 20k of a car’s price, usually over 3 years for the best rates (picture 500-700 a month payments, not the lowball long term high interest monthly payments they advertise and salescrooks start you down the primrose path of “how much a month are you comfortable paying?” BS), and that 20k earns 4% a year in stocks over the same period (or in fact and more predictably a longer period, minus inflation), you can do the simple math yourself: you’re making money on borrowed money.
There are other complex factors beyond describing here (insurance costs, market volatility, credit weight of the debt) but they are marginally important in most cases. The economy is in uncharted territory. Risk is always there.
The opposite issue is rarely considered: a car that breaks down or needs a lot of time in the shop or that you work on yourself a lot costs you hours and hours of time over the years. Would that time have value to you that would be worth paying for in advance by buying a newer or more reliable car? Hell yes, is my view. YMMV. And I LIKE having rust flakes rain down on my face while I curse at a frozen bolt I’ve just cut my hand on.
Total. Cost. Of. Ownership. It’s a mantra for me. You get what you pay for ans you pay for what you get. Quality is usually worth a premium if it’s real and if the item in question is mission critical to your health, income, freedom, or safety, all of which vehicles often are. If there were cheap ways to beat the system without just getting lucky or being very, very informed (like you’re a pro mechanic), there’s no shortcut someone hasn’t tried, or that sellers won’t anticipate. Price is only one way of looking at TCO. And it can be a very bad predictor.
posted by spitbull at 8:59 AM on April 21, 2021 [1 favorite]
Addendum to math above: in a scenario where you earn 4% on your investments (leaving taxes aside) and inflation is 2% and you pay a 2% apr on your car note, you’re basically breaking even. In that scenario, paying cash is a wash too, and that is exactly how I figured it in 2014. Turns out the investment markets I play in returned a lot better than 4% annually over that period, so I was wrong. But as I recall there weren’t any 2% financing rates to be had on the specific car I wanted (which was redesigned for that year and in high demand at the time, and I wanted a very specific configuration and a specific manufacturing location too, I know I’m weird) anyway. And I hate owing money.
posted by spitbull at 5:15 AM on May 4, 2021
posted by spitbull at 5:15 AM on May 4, 2021
Virginiaplain--Everyone got so excited about helping you with your car purchase that this might have become an overwhelming amount of advice. Could you let us know how it turned out? I hope this thread was helpful and your purchase came out right for you.
posted by KayQuestions at 8:15 PM on May 4, 2021
posted by KayQuestions at 8:15 PM on May 4, 2021
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Are you looking for a big SUV or work vehicle? Do you not drive very much and have an extremely low-mileage 2007 vehicle?
posted by sagc at 3:01 PM on April 18, 2021