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I always wondered how people justify buying a new car. 50-60-70 k car when they depreciate so much and so fast. And cars are so expensive to start with.
Why not buy a car that’s few years old, slap a falconry extended warranty on it?
I’m make ok money and mortgage is only 25 % of my monthly income. I could never imagine spending money on a new car that would be half its price in few years. And those who finance this depreciating assets is even more stupefying to me.
I suppose that’s why people lease, they pay for depreciation. I don’t believe in leasing a I like to drive a lot and I want to win car and have some money in it when I sell it.
My last 3 new cars:
2021 BMW M4- $79,500 brand new, traded 14 months/10K miles later for 78,000. Dealer put it back on the lot for $88,000 (and sold it!)
2022 Porsche 911 conv- 170K MSRP, drove it 11 months/ 6600 miles and traded back in on a new one 170K trade and they put it back on the lot for 5K more than I paid for it new and it sold in 2 days
2023 Porsche 911 - 177K MSRP - dealer offered 30K over MSRP for me to not take it, I declined and am still driving it. This is an ugly red/brown one that is a year older asking 185K https://www.porschewestpalmbeach.com...b2a95ns223041/
. I don’t believe in leasing a I like to drive a lot and I want to win car and have some money in it when I sell it.
My last lease:
Audi A8L - $1014 month/zero down/ 39 months/45K miles
So I blew $39,500 to borrow their car for just over 3 years. Lease residual was almost $50,000 if I wanted to buy it.
Real world: It was an 88K car, at the end of the lease the real world value was closer to $30,000.
So if I paid cash, drove it the same time/miles and then tried to sell it I would have lost 20,000 more than leasing it. That scenario would be called negative equity if I had a car loan!
Leasing is simply knowing up front what that car will cost you to own before you drive off. Most 1% car leases are pretty good deals (1% of MSRP, so 40K car for $400 a month for example). If you can find a subsidized lease like the above Audi then it really works out nicely (they inflate the residual so you get a lower payment even though they know the car won't likely be worth that).
The right lease is a better deal than buying! Most leases are not favorable to the consumer.
I like new cars. I can afford it easily. I take care of them personally since new…my new bmw car is now over 20 years old. It is reliable for me. So many people abuse their cars today its shameful.
I'm sure you know that is a toxic stew of a bunch of chemicals you don't want to be near. If you have a garage, best to leave all windows down for a good 6mo. to a year and drive/park with slightly lowered windows whenever possible. https://www.usatoday.com/story/news/...k/11658737002/
If you read the label of every man-made product you buy, you will notice that there is a warning about of carcinogens in the product
I always used to buy used car with close to or just over 100K miles. Then we moved to a suburban area and with kids and activities and my work commute, each of our cars were getting close to 20K miles per yr, so we moved up to 2-3 yr old used cars, usually off lease, one ex-rental. They would have 20-30K miles on them and would usually cost me half or 40% of the price of the new car, would also get them as CPO with the extra warranty included.
Since the pandemic, the same 2-3 yr old car is priced equal or more than the MSRP of the new one. It takes a bit of leg work to get a new car at MSRP but still worth it. The good part is that with a new car, I can buy it 100 miles away and be pretty sure that I will only make one trip to pick it up. Not going to find accidents, oil leaks, trans issues etc.
I still did manage to get a decent deal on a used Nissan during the bad car shortage but it was not easy.
As the market adjusts, we will move to used cars again. But it also depends on make and model. Some used cars do not depreciate much, the ones that do, are probably problem prone.
After seeing the depreciation and sub-optimal efficiency from the factory when my mom bought a brand new 1997 Nissan Maxima, I vowed to never buy a new car. My mom would buy another brand new car in 2014, but it was with a friends and family deal through Mazda (in and out of the dealership in less than 20 minutes). My wife has also never cared to have a brand new car either. She's an incredibly high earner but doesn't really take good care of things and so buying a car with a ding here and there, some curb rash on the wheel, and some chips on the hood takes a lot of the pressure off of trying to keep a car pristine.
While I like a good bargain, can research the hell out of a car (I've been known to buy the shop manual and diagnostic software before buying the car), and don't mind turning a wrench to save some money, one systemic issue remains with your original prompt and bewilderment about why folks insist on buying new or don't buy used and that someone HAS to buy or lease that brand new car so that folks like me can buy them for 40% less 3 years later before any major repairs or maintenance is needed.
One other thing to consider is the tax avoidance that comes with business leases and purchases which can apply to both brand new and used vehicles as the motivation to choose new vs used.
Finally, my brother-in-law is mechanic who just had their Lexus Rx400h totaled (car looked almost perfect from above, but the frame underneath was obviously crumbled in). Insurance paid him out $9,700 (good deal for him cuz we gifted the car to him). He just bought a 2019 Toyota Highlander Hybrid with 180K miles on it for $18K; close to 64% off the original price. He's a mechanic and it's a Toyota so I figure it's good for another 200K miles/12 years in sunny California.
I always wondered how people justify buying a new car. 50-60-70 k car when they depreciate so much and so fast. And cars are so expensive to start with.
Why not buy a car that’s few years old, slap a falconry extended warranty on it?
I’m make ok money and mortgage is only 25 % of my monthly income. I could never imagine spending money on a new car that would be half its price in few years. And those who finance this depreciating assets is even more stupefying to me.
I suppose that’s why people lease, they pay for depreciation. I don’t believe in leasing a I like to drive a lot and I want to win car and have some money in it when I sell it.
For some, having an additional "50-60-70K" in our account, means very little at death.
For others, having "50-60-70 million" has the same effect....
Should I have a debt of almost 20K for a car that won't be a much better drive than my 9 year old car with 70K on it? No.
My car drives fine, I know every ding and scratch on it and know everything thats been done to it mechanically. I have to replace the tires soon and maybe the battery but its still going strong so I'll wait and see on that. If this car has been super reliable and is still holding up, why replace it for an unknown even a new one?
If money was no object, maybe. If it was giving me trouble, yes. If it was wrecked, definitely. But the car impresses me and I'm the only person that it has to impress. My goal is to have it for 16 years.
After seeing the depreciation and sub-optimal efficiency from the factory when my mom bought a brand new 1997 Nissan Maxima, I vowed to never buy a new car.
Yeah, 30 years ago, that was true. Especially on Nissans. Now, not so much (except on Nissans, lol). Look around you at used car prices. The days of losing 30-40% driving off the lot are over. Many 2-3 year old cars are 80-90% of new cost, and a few are MORE than their new cost. Same at the bottom end of the used car market. in '97 a running, driving, 10 year old car could be had for $1000-1500. Now a running, driving 10 year old car is closer to $8-10k+. And it's not all from inflation. Cars simply last longer these days and have a lot more value in them as they age.
I always wondered how people justify buying a new car. 50-60-70 k car when they depreciate so much and so fast. And cars are so expensive to start with.
Why not buy a car that’s few years old, slap a falconry extended warranty on it?
I’m make ok money and mortgage is only 25 % of my monthly income. I could never imagine spending money on a new car that would be half its price in few years. And those who finance this depreciating assets is even more stupefying to me.
I suppose that’s why people lease, they pay for depreciation. I don’t believe in leasing a I like to drive a lot and I want to win car and have some money in it when I sell it.
In 2012 I bought a CPO Mustang GT from a Ford dealer. Can't remember how many miles it had on it, but it wasn't many (6k?). That's the only one purchased that wasn't new in the past 30 years. Until recently we've always had two vehicles, and seldom kept anything more than a couple years... so there were a lot of new cars.
I bought new for the peace of mind that I wouldn't be paying to fix somebody else's problem.
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