Posted on 01/05/2024 9:37:04 AM PST by SeekAndFind
It’s been a tough few years for car buyers. Pandemic-related chip shortages sent car prices soaring. Russia’s invasion of Ukraine in 2022 only made things worse.
However, the dust may be settling on car prices -- especially used car prices.
According to CarGurus, the average used car price has been on a downward trend since last summer. As of 2 January 2024, it’s $28,247.
While that may sound high, it’s nearly $20,000 lower than the average new car price, which is over $48,000, according to Consumer Reports.
The truth is that buying a used car is almost always cheaper than buying a new one (unless it’s a luxury or collectible car that appreciates in value). It often means getting more bang for your buck.
But now that used car prices have fallen more rapidly than new car prices have, buying a used car may be an especially good deal.
On top of the lower sticker price, used cars have other cost benefits. For one, they depreciate at a slower rate. According to Kelley Blue Book, cars typically depreciate by 20% in their first year (about 11% is lost as soon as you drive the car off the lot). After that, they lose about 60% of their value within the first five years (about 10% per year).
This means that buying a brand-new car makes the least financial sense because you’re taking the biggest immediate loss. For example, 11% on a $50,000 car is $5,500.
By buying a car that’s at least a few years old, you’re letting the previous owner take the biggest depreciation hit.
According to Tiger Okeley at used car dealership Oak Motors, “Depreciation is an unavoidable part of car ownership. But savvy buyers know they can get a major discount by buying a used car with under 60,000 miles
(Excerpt) Read more at americanthinker.com ...
“I have several friends who are multi-millionaires, NONE has a fancy house or car or wears clothes that aren’t from Costco or Walmart”
That is how multi-millionaires are made.
Once you get in the frugal habit it is hard to break.
The other benefit is a lower profile makes it less likely you will be a crime victim.
I read car articles and I cannot understand how the writers thinks spending $30k, 40k, 50k and up etc for a new car or 100k for a pickup truck is inexpensive.
Knock on wood. I got a fairly decent 2009 Honda CRV this past summer. I love it. My third Honda. It took me quite a few weeks to find something that was just right. I really had to research and look. I finally narrowed it down to two manufacturers...Honda and Toyota. The inventory out there was really low when I was looking. I got it from a reputable dealership. They did any needed work and cleaned it up. I got out the door for just over $11k. I feel like stocking up on that year and model. ;)
My last vehicle was a 2010 Ford Expedition. Bought it used in 2012 with 24k miles. Drove it out to 345K miles.
Replaced it with a 2018 Toyota Sequoia with 45K miles on it. Got if for $45K. Plan to keep it for 20 years. By then I will be in my mid 80’s. May not even be alive, so my intention is that this is the last vehicle I intend to buy for myself.
They're also totally falling apart.
That's not true at all.
A lot of people just get tired of driving the same car after 3-4 years. They want something shiny and new.
Maybe less so under today's disastrous Bideneconomy but during normal times, this isn't unusual at all.
Middle class consumers used to know this and purchased two to six year old vehicles rather than a new one. Over almost fifty years, hubby and I purchased one new vehicle. It was his work truck and he needed it to commute to a construction site 75 mile away.
Other than that all our vehicles have been several years old when purchased. The current one I drive was purchased in 2015 and was 10 years old at that point. I’ve maintained it pretty well since then and am just now having to replace a few parts and pieces. The car is mechanically sound when it comes to the engine and transmission so I don’t mind putting a few hundred dollars in it once a year if necessary. That’s a lot better than paying the price of a new vehicle, not to mention financing something over several years at the current rates. I’m retired now and don’t need to be commuting to a job daily but instead just need something that will take me on my once a week errands. If I have to get another one, I’ll pay cash once again for a decent used vehicle.
I had to laugh at that as I can't even imagine going through that many cars. I've bought mostly only new cars and I've only owned five. I'm in my 60s now.
I mostly get 150 to 200K miles out of my cars and they typically last 10 plus years. My current Subaru Outback is nearing 100,000 miles and it still runs like brand new.
Since I am meticulous about my maintenance, I know they have been maintained properly since the beginning and this contributes to their longevity.
So something to be said for buying new, so long as you maintain them properly and keep them a number of years.
Store it for your kids to cash in, you mean. A Supra/GT-R/370Z/MX5 with 10,000 miles in 2034 will be carjacked / smash-n-grabbed the first day you take it out of the garage.
Your kids otoh, if properly played out, sell it to a billionaire with his own private 10-mile personal test track in Idaho who sends his own ICE flatbed with ICE-driven security front and back.
If you're smart you'll set up a family trust to make this happen and name it "Red Barchetta". I named mine something different but you do you.
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