Quote:
Originally Posted by Porsche-O-Phile
I've never bought a new car and won't. I can't justify the depreciation hit. Never really cared much for lighting money on fire
|
I'm generally very parsimonious. I've also purchased many more used cars than new. I also tend to keep cars a long time. Here's another way of looking at the new/used/depreciation argument.
First, I pay cash for my cars. Second, the first 70K miles of a car's life tend to be low/no significant out of pocket expense for maintenance. I find the second 70K tend to be a lot more expensive as stuff breaks/wears out. In 2005 I bought a new Mini Cooper S. Six and one-half years later, it has about 70K miles. Depreciation is about $17K or $2,500 per year. Out of pocket maintenance is only $3K, including two sets of tires. That works out to just over $3K per year to own a car that I ordered exactly like I wanted, know that there are zero accidents, paint, etc. and know that the routine maintenance has been exactly on schedule with zero compromises. Trouble-free motoring.
Similarly, I have an 04 XC90 with 150K miles. In the first 70K we spent $2K on maintenance (1/2 that on a set of tires); In the second 70K this is almost $7K in maintenance expenses.
If you buy a car with 30K miles for 60% of the new price, but spend 2x more on the expensive maintenance issues that tend to crop up after you pass the 70K threshold, my thinking now is I'd rather enjoy more of the trouble-free miles than trips to the mechanic.
However I also note that my son, for example, can afford to buy a 12 year old BMW with cash, and has the time to fix the issues that crop up. That's a better trade-off for him, as he'd rather have an older, nicer car, than a newer, less desirable car.
Anyway, I wanted to point out that the depreciation hit argument is countered by the expenses of operating an older car and if you a) pay cash; and b) keep it for more than a couple years, there are reasonable economic arguments for buying new.