my current car is the only car I have ever bought brand new, and as kewl it is to have a brand new car. I dont think I will buy a brand new car again. the depreciation in the first few years is pretty bad..i think you get a better deal if you buy the cars coming off 3 year leases. as a matter of fact we traded in my wife’s coupe and got a 3 year old SUV for almost half its initial price.
but then, there is that certain feeling of having a new car, the warranty, and peace of mind (which certified used cars offer too)..and the deals and financing on new cars is amazing these days..but I am speaking in general, so if these great financing deals did not last..
^ certifications mean nothing with several dealerships.
My rule of thumb is to look for a used car just off lease, (no older than 3 years) as much of the depreciation has already occured and it is maintained (leased cars must be maintained, it's part of the agreement).
If that fails I'll look for a new car if it's really worth buying new. (Ie the Mini Cooper),
Used. Every car salesman I have ever known personally has suggested for me to buy a slightly used car as opposed to new. I just think its better in the long run. smile
I would say getting a used car that's 2 or 3 years old is the best way to go. I bought my car that was 2 years old at the time from a dealership. It had just come off of a lease and it was still under warranty. It was in excellent condition.
I have a friend who bought a brand spanking new car and it's been giving her a lot of problems (same car as me actually, only a newer version). At least the benefits with a car that's come off of a lease is that it is usually still covered under warranty (mileage permitting) and you know it works fine ... especially if you find out why it was returned. In my case, it was traded in for a newer model. :)
If we consider money - used cars are much better.. just keep some money aside for repairs every year and one would be better off.. here is a nice article..
Good analysis, so lets move to a litle bit more complexity..shall we
okay lets add some more choices here..
buy new car- the current attractive financing options
buy new car- regular financing options
buy used car-pay cash
buy used car-finance
lease new car
list your top criteria for making your choice as well.
e.g. I may say that I would lease a new car because it has low cash outlay, I get bored of a car in 3-4 years anyways and if I buy one I would sell it soon after I am done paying it off.
This option may be better because if I financea used car, by the time I am done paying for it, I am ready to get rid of it..same for a new car but the decision for a used car is twofold because by that the time I am done paying for it its a good 6-8 years old and had some serious miles on it etc.
I have often heard people say that through leasing, people actually end up paying more than if they had paid cash. I don't know how accurate that is though.
I don't like the hassle of selling cars (if I did, I'd be a car salesman)... so as much as I can avoid it, I do. For that reason, I opted for a new car on lease. I really don't have to sell it if I don't want to. Just return it.
And thats pretty much the only time a new car makes sense to me. When we are leasing it. If we are gonna buy a car (cash purchase or finance), it always makes sense to get a slightly used so that the first owner took the initial hit of depreciation.
By the way, how many of you have bought cars from those auctions? The prices can be incredible... but the downside is you really don't know the history. Some of my friends claim they got some great bargains (a 2000 Audi A4 for $13k). You can not do test drives before buying (you can walk around the car and start it if you want), and you have to give a few hundred to the broker (who are the only authorized to buy the car for you), but the pricing is the big advantage. If its a lemon you are stuck with it. If its great, great.
[QUOTE]
*Originally posted by MehnazQ: *
I have often heard people say that through leasing, people actually end up paying more than if they had paid cash. I don't know how accurate that is though.
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There are pros and cons. Simply put, in financing you front load cash outflow and in leasing you back load the cash outflow.
Some people say that when you finance the car, you are building equity in the car. Thats not really true. If you do the numbers, and keep in mind the depreciation of a car and the price incentives for new cars all the time (which affect the resale of an older car) you will find out that it is almost impossible to create any equity in a car. Ofcourse, people from the old school of thought want to drive a piece of equipment which they "own", and so they buy (finance) instead of lease. Thats ok. Except, that by the time the car is paid for, you are almost completely sick of it and wanna drive a newer car.
Leasing is not for everyone. If you drive a lot of miles, wanna modify the car a lot, do not maintain the car properly, don't really care if you drive an old car or a new car, then leasing is probably not for you. However, if you own your own business, and can charge the lease interest as a business expense, you'd be foolish to go for anything other than a lease. The numbers just don't make sense otherwise.
Bravo Faisal. good work. Not many ppl understand the issue of building equity in something which is rapidly losing value :)
question now...if u lease..how legit does your business have to be..what if its just a paper business, what if it is a side part time business? can u still deduct the interest..
I like to know that I am the first owner of the car. I know its history, and I know what had been wrong with it (if at all), and what needs to be done to it in the future. Also, nothing beats that new car smell and feel. Depreciation isn't an issue for me, since if I buy a new car, I'll keep it until it dies.
I must admit to being a new car man myself. I'm willing to pay a premium for that "new-car feeling". It just can't be explained.
Actually, I tell a lie. :(
I bought a car that was 1 month old and had done all of 395 miles before I bought it. Saved around 8% off the list price, and lost almost none of that "new-car feel".
Buy a new car mak. Y buy a car where da seat has already been warmed by another arse. Good condition used cars r hard 2 find & besides new car - ur da person who pens da history down 4 that car.
It is not difficult to find cars in good, or even excellent condition. Stick to leased cars 1 or 2 years old and you'll know the entire history of the vehicle.
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*Originally posted by mal1k: *
Buy a new car mak. Y buy a car where da seat has already been warmed by another arse. Good condition used cars r hard 2 find & besides new car - ur da person who pens da history down 4 that car.
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buy a new car seat :) the seat has been warmed by ppl moving it to the dealership etc anyways :) ..plus what kind of history does one make in a corolla or a sunny/sentra ;)
if I have the $, I'll buy a new car and if I don't have the $ then I'll buy a used one...
i wouldn't buy a used card if i had the $ for a new car, coz being the first owner of a new car is just a cool feeling worth spending a couple thousand $ over :D
[QUOTE]
*Originally posted by ~NiQ@Bi~: *
what do I say?
if I have the $, I'll buy a new car and if I don't have the $ then I'll buy a used one...
i wouldn't buy a used card if i had the $ for a new car, coz being the first owner of a new car is just a cool feeling worth spending a couple thousand $ over :D
so its all about $
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but you forgot about leasing option.
and even if you have the $, maybe you want the same $ to go to something else..like maybe you want to buy a used car and save a couple hundred on your car payment, but put the money saved towards your mortgage payment and get a nicer place..or save that for a vacation.
I mean unless we are really talking about an unlimted supply of money :)
P.S. the difference is more than just a couple of thousand. I dont think there would be a big question if the price diff between a brand new 2003 car and a used 2000 car was a few thousand. we are talkign double digits and in many cases almost half the price.
