buying used is usually a very good option. the car will lose the most value in its first year. buying used tends to mean someone else is taking that hit for you.
But you should buy from an individual rather than a dealer. You pay a very large markup from a dealer on used cars, and most have a vested interest in keeping the price of used cars as high as possible (because they want to sell you a new car even more than a used car). The dealer also knows better than you when they have a good used car...it's been through their shop, so they know. If it's a "good deal" at a car dealer, then you're almost certainly getting a car that's going to have problems in the future.
Also note that standalone used car dealers are often merely dumping grounds for the cars that new car dealers don't consider worth putting on their lot. So, even though a dealer that only deals in used cars wants to sell you a used car and has no interest in you buying a new car, he also generally only has steady access to the cars that new car dealers take on trade-in but don't want to sell on the lot. (There are also bankruptcy and repossession auctions, auctions of distressed vehicles from out of state that are auctioned as scrap and then re-titled as clean through various loopholes in the law, and a few trade-ins from people buying a used car from that dealer and upgrading. But used car dealers are almost universally selling the absolute worst cars available, and at significant markup.)
Buying from an honest individual, knowing the blue book price, and having a trusted mechanic go over the car before making a decision, is the best way to insure you get a good deal on a good car. Watch for signs that you're dealing with a hobbyist used car salesman. There are many folks that operate small-scale buy-sell operations from their home, having one or two cars for sale at any given time, mostly purchased through the same shady channels as used car dealers.
There are probably exceptions to the always buy used rule. Finding a used sports car that is actually going to last is difficult. Most folks don't know how to care for a performance car, and will drive the hell out of it for a year or two, and then pass it on when it starts getting troublesome. BMWs fall into this category a lot of times. When I bought a 350Z a few years back, I bought new, because the few used ones I could find were already (just a year after they hit the market) pretty abused and had problems.
But I'm not even certain that was a wise choice...if I'd waited another year, I might have found more options to buy used. Regardless, the vast majority of cars don't fall into this category, and the more boring the car, the better deal you can get on it used. My folks bought a two or three year old Camry with 30k miles for very little, like maybe eight grand, a few years back.
a used car is not the same as a beater. Getting a used car that is just a few years old will shave off a good chunk of the depreciation curve in many cases without sacrificing features/reliability.
My previous car was new, but only because we were buying a minivan and there were significant new safety features just introduced. But totally agree that buying used makes sense if there's not a significant difference in functionality.
This explains better what I was trying to say. Used car shopping is stressful. You never know (unless you're a mechanic or something) if you're getting a good car. You never know if you'll have problems a week later. With a new car, you're protected by warranties at least for a while. Also consider that being the sole owner of a car might make it easier to sell used.
I think the simple fact is that the issue is not simple. It's not enough to say new cars have a huge initial depreciation, so you shouldn't buy them. There are way more things to consider.
I have bad luck selecting good used cars. I pay the premium for new, and then keep them for at least ten years. The used cars I find are either totally shot mechanically, or have unpleasant smelling destroyed interiors. Or both in the case of the one I lost the most money on.
Right now is a weird time where buying a used car may be a worse financial decision than buying a new car. Used cars are marked up so high right now that when this corrects later this year, the owner of the used car will have lost so much value from it.
Best bet is to stay away from the market all together for awhile, until it all comes crashing down. Then scoop up the bargains.
This is nonsense. So someone is going to buy a brand new car and then sell it at an enormous loss shortly after? The cost of the reliability and modern features has to be paid by someone and it doesn’t make any sense to assume that someone else is essentially going to pay for you by taking that loss. When people sell used cars it’s usually because there’s something wrong with it.
Yea, you can find nice used cars but it’s a crap shoot and not everyone has the time to wait around and look for that one car.
I've gotten burned on used cars badly enough that I'm willing to buy new. I think the best outcome is a quality used car with low mileage, but that's actually hard to find, and there's some risk involved. The best you can do is find a used car that appears to be quality. I'm three times bitten, forever shy on that one.
A lot of people figure that the most predictable and low cost approach is to buy new and take good care of the car for at least a decade. There's a big difference between a used car with low mileage that you've owned since the start, and one that you've test driven once or twice.
The worst approach from a financial pov is to buy new and sell every few years. But buying a lemon of a used car and running up the maintenance bills sucks big time.
Buy a 1-2 year old car in excellent condition, keep it for a few years, then sell it for almost as much as much as you paid, and get another. No upcoming development is going to change the automotive industry such that a used car in good condition will not be worth something.
Pro tip: this is good advice for buying any type of car at any time.
Yeah. It probably depends on the brand, but I was just looking to buy my first car in quite a while and had to update my thoughts on this. Previously I'd be all for buying used. But I was looking at the prices for 2 to 5-year old Toyotas vs. new and the difference was shockingly tiny unless there was something wrong with the car or it had ridiculously high mileage.
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