Comments on: Why Buying a New Car Instead of Looking for A Used One?

By: Ray

Ray — Wed, 13 Jan 2010 00:03:08 +0000

“Can’t trust mechanics, dealerships…” I just came across a must-read for anyone getting ready to buy a car. Search Amazon Books for “Car Dealer Hell.” Just finished it and it opened my eyes to a lot of $%^& that I didn’t know. You gotta read it.

By: Jerry Hung

Jerry Hung — Fri, 24 Apr 2009 20:41:16 +0000

I have a few points to say too
- I’d think most people buy used cars with cash, and in turn negotiate down more
- I was told that 0% financing on new cars usually means less bargaining room vs you pay cash (and say negotiate down 10%)
- I’d buy from bigger used car dealers, or even manufacturer dealers themselves if you’re concerned about the cars

My family have owned 4 cars in Canada, except the 1st one being new, the other 3 were all 3~4 years old used cars (off lease) with no major problem.

Let’s just say, in Jan 2009, for the same $20K (AFTER TAX), I chose a 2004 Acura TL with GPS, 85K mileage
, instead of a 2009 Toyota Matrix XR, brand new, 0%

I planned to drive all my cars to the ground too fyi, and I am a total believer in used cars. To each his own, I have friends who buy new cars only because of the “used car smell”

By: The Financial Blogger

The Financial Blogger — Fri, 24 Apr 2009 17:46:02 +0000

I get your point and I agree with it. people have this tendency of digging a bigger and bigger hole

cheers,

By: tom

tom — Fri, 24 Apr 2009 17:44:53 +0000

Well you know what, I probably have no right to say you can’t do it because I really don’t know your financial situation.

I just wanted to point out some crucial points to consider which majority of people don’t even consider.

There are great deals but really, majority of people are in the hole.

This was a great discussion

By: The Financial Blogger

The Financial Blogger — Fri, 24 Apr 2009 17:39:12 +0000

I was quite happy not having to make car payment for the last 3 years. However, I need to change as my car is too small for 3 kids. I have the same car for the past 7 years, it’s not too bad

I don’t say we should keep going with excessive spending; I simply can afford buying a new car as my financial situation is quite stable. Excessive spending is stupid… so is piling up a ton of cash. There must be a balance. Several people are stacking up their money with great fear and they will never use it…

You are right that creating a company would be a much bigger push on the economy than buying a car but hey, I can’t hire through my company yet… not big enough!

I think that right now is the perfect timing to make purchases if you have a stable situation. There are great deals on many things.

By: tom

tom — Fri, 24 Apr 2009 17:30:54 +0000

Well there is a difference of the total cost of borrowing of new versus used car even if you include the interest for the used car.

Actually, both don’t make sense.
Yes keep your money and spend it wisely because if you spend it you are putting yourself in a tough spot. Also, this is what got us in the mess in the first place, excessive spending and doing more of it will not help.
I am sorry but spending money on a car is not really contributing to the economy, you may consider it more like a survival tactic for the economy, or dealership in this case.
If you wanted to create work and contribute to the economy then starting a business and hiring people will work much better.
But then again, the question is who will buy the product/service.

All in all, now is not that time to be throwing your money away for the sake of the economy, I say take care of your situation first before you help others.
In terms of the car, if you can afford to keep up with payments for a few years along with maintenance, insurance, etc then it may make sense.

By: The Financial Blogger

The Financial Blogger — Fri, 24 Apr 2009 16:56:39 +0000

Tom,
the situation is the following:
either I pay 8% interest on a used depreciating asset or:
I pay 0% to 2% on a new depreciating asset. In both situation; I am buying a depreciating asset. I’ve always counted my car value high enough to offset my car loan. Cars are no assets period. it is just a big waste of money but hey! we have to spend it somewhere!

Are you telling me I should not talk about buying a new car while people are losing their job? I wonder what is worst:
#1 I keep my money for myself, and see people losing their job or:
#2 I spend my money and contribute to the economy and make people work (for a very small part but still, if people (that have a good financial situation) keep buying, we will get out of the recession much faster).

By: tom

tom — Fri, 24 Apr 2009 16:39:13 +0000

So you are paying interesting on a depreciating asset, how worse can it get?
On top of that people are losing jobs and trying to keep the roof over their head.

Don’t expect all used cars to be perfect, they are used for a reason. And really if you are not willing to take the time to do your due diligence and check the car or get a mechanic to check for you then please don’t say you can’t trust the person selling, because their task is to sell it and the buyers is to inspect the car.

By: VG

VG — Fri, 24 Apr 2009 14:25:24 +0000

Another thing that factored into my descision to buy a new car instead of a used on 2 years ago was that I don’t trust the person who only keeps their car for a year or two to have kept it in good shape. After all, it only has to look decent and last until they get their next one, right? They may have driven it really hard. With a new car, you know exactly how it’s been treated from day one.

When I coupled this with the price of a 3-5 year old car compared to new (used cars were in high demand in Alberta at this time in 2007), it just wasn’t worth the $3000 to deal with the headaches of a used car.