New vs Used?

I have a little bit of experience with this. To start, my car history:

  • 1998 Buick Century (totaled after being t-boned)
  • 1999 Subaru Forester (great car, sold after a few years)
  • 2005 Subaru Impreza RS (sold because I moved across the country)
  • 2004 BMW 325i (traded in, a nightmare for repairs)
  • 2014 Ford Fiesta ST (current car, love it to death)

Used cars are good because they're cheap compared to new ones (I know, I'm breaking news here). You can get very good cars for not that much money, especially if you want something sporty as $10k is much easier to swallow than a $45k new car. Most cars made in the past 15 years are going to be reasonable, they'll be relatively safe, have air bags, and aren't so old that parts are hard to come by.

The biggest downside of used cars, by far, is maintenance. When looking at buying a used car you have to research the most common problems with that model year. For example, my Forester ended up needing the all-too-common head gasket replacement. That's not cheap. If you buy a used car, you have to figure out how much you're saving up front in purchase cost vs. potential/likely future maintenance. For example, if you buy a car for $5k that has $3k in expected "this is just an issue with this generation engine/transmission/suspension" repairs, it's not really $5k. You also have to take into account the condition the car is in--if it's meticulously maintained, oil changes every 3k miles, receipts for every piece of work done on it, etc. then you're better off than a car that is in "okay" shape with some expected repairs but maybe a large number of unexpected repairs (oops turns out the previous owner didn't replace the timing belt on time--your valves are bent and you have to replace the engine or whatever).

New cars are obviously a bit different. There's a larger up front cost in purchasing them but the amount you'll spend in maintenance in the first few years is pretty much limited to oil changes, brakes, and tires (all of which you'll have to deal with on a used car). If you're financing it, there's also interest to consider. You may end up spending more in interest to pay the car off than you would buying and maintaining a used car (or at least a significant chunk anyways). Also new cars come with warranties, meaning within a certain threshold, failures of parts are basically free, whereas with a used car you are shit out of luck.

Yes, there's the off-the-lot depreciation, but a car is not an investment and you shouldn't expect to earn anything off the car. It's more about how much you're willing to lose. All cars will be worth even less than when you bought them, and for some used cars, depending on how long you plan on keeping it, it may be almost worthless by the time you're done, depending on how old it was when you bought it etc. A new car gives you a bit more expected resale for your expected ownership period. A 2015 car sold 5 years from now is going to be worth more than a 2000 model sold 5 years from now, relative to what you bought it for.

Honestly, it's probably a wash in the end. If you can afford and desire a new car, go that route. If you couldn't give less of a shit and don't mind seemingly random repair costs, go used (although in this case I beg of you to research repairs--i.e. don't buy a BMW).

/r/cars Thread