Comments on: Buying a New Car May Actually Be Cheaper Than a Used Car

By: Meg

Meg — Tue, 10 Aug 2010 08:19:52 +0000

I meant a feature from the POV of the car dealership. It’s actually pretty smart, as it has the side effect of driving down the competing supply for cars, therefore driving up their own profits. That doesn’t mean I condone it — actions that are ‘smart’ can simultaneously be unethical, as is probably the case here. So there’s no need for the aggressive non-sequiturs. “Good” and “idiotic” aren’t opposites, and natural disasters are not caused by construction workers.

By: todd

todd — Thu, 22 Jul 2010 15:06:52 +0000

@Meg, I’m not sure I follow. If you mean that it’s a feature for the people trading in their clunkers (or plain-old used cars after the program ended), then yes, it is great for them. During the program, they got more money for their cars than they were worth. After the program, the scarcity of used cars means that their used cars were more valuable.

When I say the program is idiotic, I mean in the sense that “destruction” is never progress. There are a lot of resources that go into making a car. Taking a functioning item that could be useful to someone and destroying it destroys that capital. It is a waste of resources. It forces people to spend more resources than they would have otherwise, resources they could have used to purchase shovels, strawberries, or video games.

If you think that the clunkers program is not idiotic, then you must also believe that natural disasters like hurricanes are good because they provide employment for the construction trade.

In short, it’s just another example of the broken window. We see movement in the auto industry, but what we don’t see are the lost sales of TV’s, Blu-rays, etc. I have no doubt that it was a calculated move to buy votes by taking from the many to give to the few. In that sense, for the administration, it was probably not idiotic. Those who rob Peter to pay Paul can always count on the support of Paul.

By: Meg

Meg — Thu, 22 Jul 2010 14:37:44 +0000

@todd, is it really ‘idiotic’ though? I hadn’t thought about the cash for clunkers deals like that before, but from the POV of the people who are offering them, a decrease in the used car supply would be a feature, not a bug. I wonder if that’s (part of the reason) why they do it?

By: patsy_weber

patsy_weber — Tue, 20 Jul 2010 10:28:59 +0000

I’ve always sprung for used cars because that way I can afford models which I wouldn’t dream of buying new. Before buying any car I make it a point to check for typical car safety features (that get me lower insurance rates). Small thing, but it goes a long way in keeping your rates down.

By: Car Negotiation Coach

Car Negotiation Coach — Fri, 16 Jul 2010 03:54:47 +0000

Jeremy, I’ve been meaning to write about the fact that new cars occasionally make more financial sense than used cars for a while, but you beat me to it. And to be perfectly honest, you did a great job, so I won’t bother cause my post wouldn’t be nearly as good!

By: Matt Davis

Matt Davis — Thu, 15 Jul 2010 23:47:05 +0000

ALWAYS BUY USED, and try to buy from a private seller as well.

I’d never buy new, only because you can get STEALS!

I recently bought a 1997 Camaro Convertible with 93k and no problems for $1000.

Thats very cheap, almost $3000 under Blue Book. I got it from a private seller wishing to get it out of his lawn, and it saved me a fortune.

By: Aury (Thunderdrake)

Aury (Thunderdrake) — Thu, 15 Jul 2010 17:56:12 +0000

My sister learned the expensiveness of operating a cheaper car the hard way. She got reamed left and right with break downs, gas prices, expenses, high insurance, you name it. Cars are one of the biggest liabilities a person can own.

Sure, higher end cars depreciate, but at least you’re not spending a thousand a month in repairs!

By: Ken

Ken — Thu, 15 Jul 2010 09:34:02 +0000

My first car i bought new and bought a repair manual (car and manual cost 9k with 0% financing). I ran it for 250,000 miles (7 years) doing all of the maintenance and repairs (thanks to the Hayne’s manual). When it finally needed major work I gave it away and bought the exact same model and year from someone with 100,000 miles on it (for 500 bucks). I already knew how to work on it. It now has 200k miles and is still running great. When it goes i will attempt to again buy the same model, if not the same year. Not because the model is important to me, just the knowledge i have of it.

By: Jessica Bosari

Jessica Bosari — Wed, 14 Jul 2010 16:27:22 +0000

I think that any new car bought for the price of a used one is unlikely to last. It’s only smart to buy new if you can pay the entire cost up front. Otherwise you have to carry collision and comprehensive coverage, an added expense required when you get a loan. Then of course there’s the interest.

I have always had very good luck with 5-year-old cars with 40,000 miles or less in the $5,000 range. A Dodge Caravan and a Mercury Mystique. The Dodge was making me nervous with its high miles and age so we sold it cheap to a friend. It’s now retired to Nantucket as a summer vehicle. The Mercury was excellent and paid for itself with how much we got out of it. I recently inherited a Ford Focus and the Mercury is now being driven by the neighbors daughter.

My husband has done well with pickup trucks bought at auction. The electric company sells their cars off as soon as they turn 5 years old, whether they need it or not. He has bought his last three trucks for $2,000 a piece and driven each of them into the ground.

By: Kimberly @ Card Hub

Kimberly @ Card Hub — Fri, 09 Jul 2010 16:05:29 +0000

This is very interesting. I’ve been looking at buying a new car recently and I’ve noticed a similar trend. But you’re right, you can still save a lot of money if you’re willing to buy a car that is a few years old instead of one year. You still have to be careful here though because this kind of car can end up costing you a lot of money as well. I bought a used Saab that was a few years old, got a really good deal on it, but it had so many problems after the first year that I ended up spending more money on it than if I had bought it new. That’s certainly not to say all cars that are a few years old will give you trouble, you just have to do your research if it’s been with a previous owner to make sure you get a good one!