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Someone told me repair cost will make a used car "payout" about the same as what a new car would cost.
Was that "Someone" a new car salesman, by chance?
I'm guessing either that, or somebody who likes to buy new cars and feels he/she has to justify it somehow.
There's absolutely nothing wrong with buying a new car. But you have to accept the fact that it's a want and that it's not something that can be justified financially.
I personally buy the cheapest of the cheap used cars I can find (nothing over $1000 since the 1990s), fix it when it needs fixed, and send it down the road when I'm tired of it. My total layout for purchases and repairs over the last 20 years is far less than the cheapest new car on the market.
The only way I could ever possibly see a used car costing more overall than a new car is if you bought a late model used car just out of warranty and started having serious mechanical problems right off the bat.
All I can tell is I had 87 Taurus, bought for $1100, and it cost me $4700 in repairs.
Fix Or Repair Daily.
Oh, and I was stupid enough to buy a 91 Mercury. Was less hassle. But 1st owner, insurance agent, bought it for his daughter. He gave me "all repair receipts". Damn thing totaled $16000 plus in all those, which was more than its' new car dealership cost.
Why is a 1987 Taurus or a 1991 Mercury relevant? Some of those were just crappy and it is your fault for choosing them. Every carmaker's quality rises and falls over time. Some more than others.
My experience is statistically not meaningful (as is everyone else who posts here). It is just anecdotal.
Our 2006 Honda Pilot EX-L, purchased in late 2005, has 134K miles. It has had normal service - oil changes, transmission fluid changes, tires, one set of brake pads. One unscheduled service for a power steering pump at about 120K miles ($700). Like other V6 Hondas it had a timing belt change at 105K miles - for $800. Edmunds says it is worth $9500 private party sale. I paid about $30K in cash for it. If Edmunds is correct, then I estimate my costs through this fall to own this car:
$30000-9000 = $21000 purchase cost
$1500 = "non-trivial" repairs
$500 = normal maintenance (fluid, filters, etc. all DIY)
$250 = brake pads (DIY)
$1500 = tires and battery
So over an eight year period this vehicle cost us $24,750. That's about $3100 per year or 17 cents/mile.
Obviously that isn't a total ownership cost because it doesn't include fuel and insurance. Because I paid cash, there were no finance charges. If I had not done some of work myself, the maintenance costs would be higher. If I had bought a one year old Pilot instead of new, I think I would have spent $5000-8000 less at purchase, but bought another set of tires and a bit more maintenance.
If I had bought three new cars over that time of similar price, I think I would have not paid $3000 for repairs and tires. For the first six years of that car's life, we drove far more than most leases support without 20cents per mile extra.
If your goal is to drive new-ish vehicles at the lowest cost and you don't mind always having a monthly payment leasing can be a good way to go. But if you want to spend less overall, buy a reliable car slightly used and hold it for a while.
If I had bought a Dodge Durango or Ford Explorer, I think my repair costs and depreciation would be significantly higher.
Someone told me repair cost will make a used car "payout" about the same as what a new car would cost. I'm wondering how true that is? So there justification starts with Edmunds... (I'm going to compare the Ford Fusion)
This says that you save roughly 2k, by going with the older car. Now, my last used car had 3 high price repairs. Other than that, I didn't have much trouble. That being said, in the last few years I owned it, I payed 2.5k to keep it up and it was only worth 5k. Now, I'm wondering how much does it really cost to own a used car and if it's cheaper or the same to buy a new car?
I think you're misinterpreting the two links ... the TCO assumes ownership from a new purchase so that '08 Fusion TCO cannot be compared directly to the '13 model (and even then, you're comparing a V6 AWD model to a base 4-cyl model)
I'd guess that '08 Fusions can be had for $10-12k so you'd have to make your own spreadsheet to compare used versus new.
We have lots of very used cars and have had mostly used cars for the past 25 years. We had a few new ones in there. IN our experience the cost of the used cars is not even close to the cost of a new car. If you are dealing with late model used cars then with some models the cost for new will be less. In some instances, even the purchase price of the new car is less than a one or two year old used car. I saw that with Avalanche a few years ago, and with my dad's GM Discount pretty much any new car was cheaper than a 1 year old used car of the same model and options. Now I think you will find it more often because used car prices are so high.
I think it depends. In 07 I bought a RAM. I looked at the prices of used ones which were a couple years old and they weren't much less then a new one after the factory rebates. Add in the lower finance charge for a new vehicle and take off the 30,000 + miles the used ones had and it really was a no brainer for me at the time to get the new one.
Then in 2012 I started looking for a high MPG commuter car. Of course I was looking for used. The cheapest would have been an 04 focus or similar with 75000 miles for 7500. There were several 09/10 model somethings for 10 to 12 grand with around 60000 miles. Or I could get a new fiesta for 14500 with 0 miles. Since I was going to be putting 20+ thousand miles on it a year, if I had of gotten a used car it would have over 100000 miles in just a couple of years so it made no sense. Then there was that used car interest rate once again. I got the new car. With that plan, in a couple of years I'll have 2 paid off vehicles with around 75000 miles on them.
Now for me it worked out new because the price of the new vehicles in comparison to the used ones wasn't much different when the added miles were factored in. Now as far as the truck was concerned, it would have been cheaper at the time to have bought an older one (perhaps 10 years old) and just put money into it as was needed but I did that when I was younger. Even though I can fix things myself it is still a major headache having to do any repairs and wondering when the next one was needed. As of now it worked out getting the new one because I only have 57000 miles on it and it should last for many years.
For the price point of my car I don't think I could have spent any less without going to an older model as well and then worrying about repairs. But I put 22000 miles on it in the first year so those miles add up quick if there is a 100000 mile head start.
I guess it depends on the car, but I paid $13,000 and change for my 1998 Acura CL when it was 5 years old and had 33,000 miles. I bought an extended warranty but that turned out to be a waste as the only thing that broke during the warranty period was the alternator. Since then I've put an additional 150,000 miles on my car, and aside from maintenance/parts reaching the end of their natural life, the only major repair was the transmission (at 180,000 miles).
All I can tell is I had 87 Taurus, bought for $1100, and it cost me $4700 in repairs.
Fix Or Repair Daily.
Oh, and I was stupid enough to buy a 91 Mercury. Was less hassle. But 1st owner, insurance agent, bought it for his daughter. He gave me "all repair receipts". Damn thing totaled $16000 plus in all those, which was more than its' new car dealership cost.
There is a point where its just stupid to fix the car. Also when was this? Because you are talking about a 22 and 26 year old car. Those things are before the world even knew where Iraq and sudam husein was.
**** the Taurus we were still scared Russians were going to get us and Back to the future was new.
I'll be honest, I think I may have a hard time ever buying a new car again, and if I do... it will be like my last one where I planned to keep it for years.
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