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.
|
If we're cherry picking examples, then I'm going to pull out a car I know of that was bought in '08.
2004 Audi S4. Sold for just over $80,000 when the first guy bought it.
Resold in '08 (3.5 years old)
-40,000km
-bought from a dealer so CPO (2 more years of factory warranty bringing it up to 3.5 years of warranty for me, this obviously raises the sticker price).
-$41,000
Buying new the finance rate was actually worse than used, so we'll throw that out the window and go straight depreciation.
Buying a new one, 3.5 years later you've had $40,000 in depreciation.
Buying a used one, 3.5 years later that car was worth ~$23,000 still. Just finished the warranty.
That is a freaking huge difference.