Buying new or used cars.

[johnny]

Our Hilux which we have owned from new has reached the end of its extended warranty.
(nearly 6 years old 130 000 kms) So now is the time to trade up to a new Hilux or keep the old one.

So I would really like to know your thoughts on the whole new cars vs good stewardship issues.
(They seem so expensive, is this really worth the peace of mind in having a reliable daily drive)

 

[Deleted member 6112]

I try to stay away from car payments. They tend to have very high interest rates. If your is not on the verge of breaking down, I would just take care of it and enjoy not having a bill (that is, if it's already paid off).

One way to look at it: do you anticipate having to have your car fixed without a warranty to be more costly than buying a new vehicle?

 

[Logan]

My vehicle is a '92 Honda Accord that is as reliable as anything can be. Just took it on a 600 mile trip last month. I paid $2000 for it 15 years ago, mostly oil changes, tire changes, and minor repairs since then.

I can't imagine myself buying a new car. I just personally don't see the value.

 

[aadebayo]

I normally buy low mileage 10 year old Honda civic and drive for 5-6 years. My current car is a 1999 Honda civic and I find it to be very reliable. I take it to the garage every 6 months for service. So if your car is not giving you problems, then keep it.

 

[Frosty]

If a personal family car then my thoughts are to run it until it dies, generally speaking. I guess there could be extreme cases where the costs to repair an aging vehicle could exceed those of a down payment plus monthly payment, but those cases would be rare.

Another option would be to look at nearly new (very low miles) or previous year dealer clearout sales- if you have that itch to get something new. Both of which could save you thousands over something BRAND new.

But a lot of it comes down to your financial situation. For example, would cutting out the car payment figure to improve your family's quality of life (not looking for an answer to that)?

 

[Edward]

nearly 6 years old 130 000 kms

If that was all I was getting out of a vehicle, I'd probably get something different. Are you really going to be able to do much better with a used pick-up? Do you use it for heavy off-road work and hope to find one that's been used for soft city driving? Mileage on yours looks a little high for the age, but not that bad.

By the way - in the US, at least, extended warranties are almost always a bad deal. When the vehicle goes out of warranty, find a trustworthy local guy to keep it running. A Toyota should be good for a couple of hundred thousand miles with a couple of major services (timing belt being the most expensive item) every 100,000 miles (160,000 km) or a little less. And regular oil changes.

Start making car payments into a separate account. When you have enough in the account to add to your trade in and buy a new car for cash, get a new vehicle. (Alternate test - when monthly car repair costs exceed payments on a new car, get a new car. )

Like many here, I'm debt-adverse. But given current low interest rates, the economics have changed.

Full disclosure - I bought new for my wife and financed it, but paid it off early when I got a better job. I bought a used car about 7 years old for me. Sunk money into a major service on the front end since I didn't know the service history, and haven't had any problems. Trying to decide what to do for a car for my daughter.

 

[py3ak]

I'll share the alternative view. I have purchased two used cars. One had a catastrophic collapse in less than a year and had to be sold to a junkyard. The other one cost me just as much in repairs as I paid for the car itself, and added hours of untold anguish and complication to my life over a period of four years.

It's true that I am a mechanical idiot, and others could likely have dealt with the hassle or made better selections as to the used vehicle to be purchased in the first place. But I prefer the predictability of a regular payment to abrupt and alarming expenses suddenly arising at awkward moments.

 

[KMK]

I like buying new with 0% interest rather than buying used.

 

[Jack K]

Keep driving your current car until the cost of repairs to keep it running exceeds the cost of payments/repairs on a replacement vehicle. The fact that it's at the end of its warranty means your cost of repairs will rise, but until they exceed the cost of replacement, you're still better off with your current car.

If buying a new car gave you an appreciable or even stable asset, the math might work out differently. But given how quickly car values tend to depreciate, one should pretty much treat them as consumable goods and look at average monthy costs when comparing one strategy versus another. So until your current car starts to rack up expensive repair bills in its old age, it's probably a smart business move to keep it.

 

[Edm]

Luckily, I am issued a company vehicle. Haven't owned my own in 15 years. My wife is driving a 2003 highlander. We did buy it new but it was a year old at the time so we didn't pay current year price. I have seen some used cars last and others have many problems. I would look for a used one year or so old car.

 

[VictorBravo]

I think it can only be a personal decision based on personal skills and tolerances.

Some are willing accept car payments and drive-off depreciation of a new car because it comes with a fairly long-term warranty.

Others, like me, prefer paying cash, buying used, and maintaining and repairing them. My personal vehicle, a 2001 Ford Ranger, now has 180,000+ miles on it and I think it has another 100,000 miles in it if I'm kind to it. My wife has a 2001 Audi allroad that is a real luxury/sports car/SUV and is a tremendously fun car to drive. But it has forced me to become an Audi mechanic. Otherwise, we'd be broke paying for repairs. But I like doing this sort of thing.

If you go the new car financing route, at least make sure to put enough down so that you always owe less than what it is worth. Otherwise, down the road if you want to get rid of it and get another, you are still on the hook for more than what you have.