The economy has been fluctuating up and down, but you’re either a car geek (like me) or you just don’t like/want your old car. What to do?
While many boomers will say that the golden age of motoring is long gone, I would beg to differ. Speed, gadgets and safety have never been cheaper, as are interest rates, and supplies are staying high on many new vehicles.
So why wouldn’t you buy a new car if you’re looking at one?
Well, I have a few arguments against buying a new car. Some are common sense, some not. And being a car geek myself, I know that many of you will just try to reason yourself out of many of them anyway, but here goes…
The first obvious reason, although maybe it isn’t that obvious to some, is the instant depreciation of your vehicle when it’s signed over into your name and you drive it off the lot. Maybe you negotiated thousands off the price or got a 0% interest rate, but you’ll still lose money on the deal thanks to the taxes you paid and the value lost from the title transfer (you’re now owner #1 and each new owner makes the vehicle lose more value).
Now, if you’re looking at 1-2 year old vehicles right now, you might also want to compare against a new vehicle due to the high price of used cars now (at least fuel efficient ones), but older than 2 years, the better for you thanks again to, you guessed it, depreciation. Luxury models take an especially hard hit.
For instance I was looking at 4-5 year old Mercedes S-Class sedans. These retailed for $80-$120k and are now selling for $25k-35k with only 50k miles on the clock. Another example are Porsche 911’s. Once going for close to $100k, you can find a ton for a half or third of the price. You can look like a baller without dishing out like one.
But what about repair costs? Well, do your research to make sure you’re not buying into a junker and you’ll find that the huge wads of cash you saved buying used will stay in your pocket. While you might love the idea of a factory warranty, it rarely helps you in the first few years so you’re paying for something you won’t use. You can always buy an extended warranty with the money you’ve saved to get some peace of mind, and stash away the rest in a “car fund” to take care of the remaining worries. Again, though, just perform your due diligence when you first inspect the car for purchase and you’ll find that a second-hand car will almost always be a better financial decision.
That Green Stuff Outside
When you buy a new car, you’re destroying the planet!
Even if you’re buying a hybrid, a Volt or a Leaf, you’re buying something new that had to be produced with new and recycled resources. If you’re buying a used vehicle (or deciding to just keep your existing car), the damage has already been done. You can’t change the laws of science: if it’s made, it’s made and if it’s not, it’s not and you have to use up new stuff to make it.
Sure, if you’re driving around in a Hummer for 200,000 miles versus a tiny Ford Fiesta, the emissions and oil usage (and the impact to the roads over time) may actually outweigh the environmental cost of making the Fiesta, but in the end, it’s usually cheaper and better for the environment to just keep what you have or buy used (and downsize) as it’s not taking up new resources.
The newer the car, usually the safer it is. However, in the last decade, most of the big safety improvements have been made and now it’s up to “nanny technology” to improve more. Things like adaptive cruise control and blind spot warning systems will help avoid collisions, but they’re expensive additions, weigh down vehicles and may even end up being more of a distraction than a help to some (think of when “Cruise Control” first came out. People actually thought you could set it and let go of the wheel and let the car drive itself). This leads to…
Having the latest gadgets and gear is only enjoyable (for most people) within the first few hours, days or weeks of ownership. After that, it’s the same old thing. A Lexus can feel like a Toyota and a Mercedes can feel like a Chevy (not saying Toyotas and Chevys are bad…they’re just not considered “luxury transport full of new toys”).
Also, I mentioned “nanny technology”. Features that are installed to improve your safety usually take away from your control of the car and the ultimate fun you can have. If you’ve ever watched Top Gear, think about how many times they complain about traction control when they’re at a track and how some cars won’t let you turn it off anymore. Sometimes the older cars are just more fun.
I’ll admit I love new cars, new technology and just reading about what’s the next big thing in vehicles. Every day I’m conflicted whether my next car should be new or used, and how long I should keep my truck. I love the “new car smell” (even though it’s really just the smell of deadly chemicals from the manufacturing process 🙂 ) and can’t resist driving through dealer lots once a month.
I myself can’t guarantee my next car won’t be new and I’ll have gone against all I just wrote, but at least I’m putting out there what you (and I) should be thinking about when we’re in the car market.