Quote:
Originally Posted by nfotiu
I challenge someone to prove that buying 2 to 3 years used cars really is a wise financial move. Every time I've looked into it, it is a wash at best.
Ie, I bought a tdi wagon new recently in the US. Brand new one was 25000 with a .9% five year loan, and they include 3 year warranty and maintenance. Best deal on a 3 year old I could find was 20,000, no warranty, and I figure 4% for a 5 year loan.
Using a depreciation calculator for a car like that, I get that the 3 year old one would be worth 11,169 in 5 years, while the new one would be worth 12,863.
Total interest and depreciation for the brand new car would be 12,713 vs 10,911 for the used car. A savings of $1800 over 5 years. My guess is you'd come out behind after factoring in paying for 5 years of maintenance vs 2 years for the new car. Not to mention that having a car that is 3 years newer is worth at least a little intangible value to the owner.
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If the car really is worth 80% after 3 years, then you are right, it probably works out to about even.
My understanding is that a typical car loses about 50% of its value in the first 2-3 years after coming off the lot, so that changes things a lot.