When did used cars get so expensive? (1 Viewer)

[eoMMan]

I'm looking for a smaller, reliable car (think Honda Civic or Toyota Corolla) that's only a couple of years old and has less than 30,000 miles on it. What do I find? Well, most of these used cars are only a couple grand less than a brand spankin' new one! IMO, it really makes no sense to buy the used car unless you are extremely strapped for money. The new car is the better value. You will get more reliable miles out of it and have a later yeared car when you go to resale it at some point.

FWIW, this car isn't for me.

:rantover:

 

[The_Man]

I went through this same experience a couple of years ago. I'm not sure who is paying that kind of money for a used car, especially when you can get very low interest rates on a new car, but not so low for used.

I also found that there are some fantastic no money down lease deals out there. I know leasing doesn't always make a ton of sense, but if you can find a lease deal that's $100 per month cheaper than buying with no money down, it might makes sense for you.

 

[Evilgrin 72]

I always thought that "as soon as you drive it off the lot" that there was a massive depreciation. I'm just not seeing it, at least not at the prices some dealers are listing pre-owned.

 

[Dr. Awesome]

I went through this same experience a couple of years ago. I'm not sure who is paying that kind of money for a used car, especially when you can get very low interest rates on a new car, but not so low for used.I also found that there are some fantastic no money down lease deals out there. I know leasing doesn't always make a ton of sense, but if you can find a lease deal that's $100 per month cheaper than buying with no money down, it might makes sense for you.

http://swapalease.com/Some good deals here if that's the route you want to go.

 

[belljr]

My last 3 vehicles have been brand new. My last 2 have been 0% financing.

The difference for me is I tend to keep my vehicles for 9+ years so to me buying new is worth it, imo. I'd rather pay the money on the new car than the used

I have 2 more years to go of payments on my newest vehicle and then I should be able to go 2 to 3 years and get rid of my other car that will be approaching 10 years. Works for me

 

[Andy Dufresne]

Right after Cash For Clunkers.

 

[Arizona Ron]

Always get new cars leased. I have a brand new car every three years and never worry about maintenance. Lease deals are great now, just got a new Lexus for what it would cost to own a lower tier model. Sure I’ll never “own” it, but who wants to drive an old premium car when you can drive a brand new one?

 

[Ignoramus]

Is it a regional thing? Just a quick AutoTrader search for vehicles near me found a 2010 Corolla S listed for $17k, while a 2011 at the same dealership is listed for $21k.

I remember seeing something on the news recently about now being a good time if you were looking to sell your used car (smaller ones, especially). Given the rising price of gas those cars are in higher demand.

 

[shader]

If I wanted a car under 30k miles, I'd buy new for sure.

 

[Insein]

Right after Cash For Clunkers.

Cash for clunkers drives up used car prices.

 

[Juxtatarot]

Prices are up on small, gas-efficient vehicles right now. Conversely, if you are in the market for a used SUV, it's a good time to buy. Same thing happened in 2008 when gas prices were high. Supply and demand.

 

[Raiderfan32904]

I went through this same experience a couple of years ago. I'm not sure who is paying that kind of money for a used car, especially when you can get very low interest rates on a new car, but not so low for used.

I also found that there are some fantastic no money down lease deals out there. I know leasing doesn't always make a ton of sense, but if you can find a lease deal that's $100 per month cheaper than buying with no money down, it might makes sense for you.

No money down lease is what I recently did. It made a lot more sense than shopping for new or used. I got a new civic and an accord for a combined $460/month on a 35 month lease (no money down), with plenty of maintenance coupons thrown in, so I'll probably never pay for the oil changes or regular maintenance. Buying a car is stressful and selling it for what you think it's worth is even more stressful. I got a trade-in check for $10,500 for my 2 old gas guzzlers that were out of warranty and costing lots of money for maintenance. Cost of ownership for 2 cars over 3 yrs is $16K + the cost of gas + insurance. I like the predictability of knowing what my car is costing. In '09 and '10, I had consecutive years of unexpected $1,500+ repair bills of taking old cars to the dealer for ticky tack repairs. I had had it with all of that.

 

[Evilgrin 72]

Always get new cars leased. I have a brand new car every three years and never worry about maintenance. Lease deals are great now, just got a new Lexus for what it would cost to own a lower tier model. Sure I’ll never “own” it, but who wants to drive an old premium car when you can drive a brand new one?

I followed this logic for years (and may again), but I can tell you it is nice to not have a car payment every month. Frees up a lot of money to save or put towards entertainment.

 

[Juxtatarot]

Right after Cash For Clunkers.

Cash for clunkers drives up used car prices.

That was short-lived and never had an impact on the type of car the OP is interested in.

 

[gmbacm]

Is it a regional thing? Just a quick AutoTrader search for vehicles near me found a 2010 Corolla S listed for $17k, while a 2011 at the same dealership is listed for $21k.

I remember seeing something on the news recently about now being a good time if you were looking to sell your used car (smaller ones, especially). Given the rising price of gas those cars are in higher demand.

In my experience it is easier to negotiate price of a new car if you know the dealers costs. I recently bought a new vehicle. A couple years old same model was $6000 less then new list price and I would have gone used at that price, but I got over 4K knocked off new price to make the difference less then 2K.

 

[Raiderfan32904]

Always get new cars leased. I have a brand new car every three years and never worry about maintenance. Lease deals are great now, just got a new Lexus for what it would cost to own a lower tier model. Sure I’ll never “own” it, but who wants to drive an old premium car when you can drive a brand new one?

I followed this logic for years (and may again), but I can tell you it is nice to not have a car payment every month. Frees up a lot of money to save or put towards entertainment.

It is nice to have no payment, but if you have the means to buy a new car, why not invest your money instead of pouring it into a car that depreciates faster than any alternative investment? A good car will hold its value to about the end of the warranty period, then it falls off a cliff. A lease is like having a "fresh by date" sticker. When it's time, you move on to a nice shiny new model. Cars are disposable.

 

[Andy Dufresne]

Right after Cash For Clunkers.

Cash for clunkers drives up used car prices.

That was short-lived and never had an impact on the type of car the OP is interested in.

Wrong x 2

 

[flufhed]

My last 3 vehicles have been brand new. My last 2 have been 0% financing.The difference for me is I tend to keep my vehicles for 9+ years so to me buying new is worth it, imo. I'd rather pay the money on the new car than the used I have 2 more years to go of payments on my newest vehicle and then I should be able to go 2 to 3 years and get rid of my other car that will be approaching 10 years. Works for me

This is kind of my way of doing things, at least with the last two cars.Mine I am driving now is 9 years old, and will be looking to trade in in a year, as soon as my wife's car is paid off. We are trying to get it so that we each keep our cars about 10 years, with about 5 year payment terms, staggered such that are only paying for one car at any time.I am looking to get a pickup for my next vehicle, and looking at used prices it defintely does not seem to make sense to get a used pickup.

 

[flufhed]

Always get new cars leased. I have a brand new car every three years and never worry about maintenance. Lease deals are great now, just got a new Lexus for what it would cost to own a lower tier model. Sure I’ll never “own” it, but who wants to drive an old premium car when you can drive a brand new one?

I followed this logic for years (and may again), but I can tell you it is nice to not have a car payment every month. Frees up a lot of money to save or put towards entertainment.

It is nice to have no payment, but if you have the means to buy a new car, why not invest your money instead of pouring it into a car that depreciates faster than any alternative investment? A good car will hold its value to about the end of the warranty period, then it falls off a cliff. A lease is like having a "fresh by date" sticker. When it's time, you move on to a nice shiny new model. Cars are disposable.

Who is "pouring money" into a car? There are very few repairs you could possibly need to a used car that would constitute one month's lease payment, let alone two or three.I understand liking to have a new ride, but financially your plan vs. mine is not even close. My vehiclehas been paid off for years. I had to replace the clutch, which was expensive, but still was only 3 payments on a new vehicle. And that was 2 1/2 years ago. Since then it's been oil changes and a set of new tires.

 

[Slapdash]

I'm looking for a smaller, reliable car (think Honda Civic or Toyota Corolla) that's only a couple of years old and has less than 30,000 miles on it. What do I find? Well, most of these used cars are only a couple grand less than a brand spankin' new one! IMO, it really makes no sense to buy the used car unless you are extremely strapped for money. The new car is the better value. You will get more reliable miles out of it and have a later yeared car when you go to resale it at some point.FWIW, this car isn't for me.:rantover:

It has been this way for Hondas and Toyotas for many years.

 

[Andy Dufresne]

I'm looking for a smaller, reliable car (think Honda Civic or Toyota Corolla) that's only a couple of years old and has less than 30,000 miles on it. What do I find? Well, most of these used cars are only a couple grand less than a brand spankin' new one! IMO, it really makes no sense to buy the used car unless you are extremely strapped for money. The new car is the better value. You will get more reliable miles out of it and have a later yeared car when you go to resale it at some point.FWIW, this car isn't for me.:rantover:

It has been this way for Hondas and Toyotas for many years.

This is true too. Those brands really hold their value, and in addition to the Nissan/Infiniti brands are some of the best used cars you can buy, IMO.

 

[Arizona Ron]

Owning a car beyond its payment years is a better decision if I only used to car for going to/from work, driving around etc.

My car, however, is part of my job. I meet clients and often take them to lunch with my car. My car is part of my appearance.

I purposely choose Lexus because it’s in the "nice car" range; it says that I'm not cheap but not throwing money away on a 80k+ car.

 

[eoMMan]

Owning a car beyond its payment years is a better decision if I only used to car for going to/from work, driving around etc.

My car, however, is part of my job. I meet clients and often take them to lunch with my car. My car is part of my appearance.

I purposely choose Lexus because it’s in the "nice car" range; it says that I'm not cheap but not throwing money away on a 80k+ car.

Yes, if you are dealing with clients and the "look at me" factor is there, you need a newer car.FACT

 

[FUBAR]

Always get new cars leased. I have a brand new car every three years and never worry about maintenance. Lease deals are great now, just got a new Lexus for what it would cost to own a lower tier model. Sure I'll never "own" it, but who wants to drive an old premium car when you can drive a brand new one?

LOOK AT ME, I'M MADE OF MONEY!!!11For those of us who don't like throwing money down the drain and don't feel the need to have a new car every few years, buying a new car makes a lot more sense.

I can buy that in some fields, driving a nice car can help your business. More people buy new cars because they want to than truly benefit from it.

I bought my last two cars with cash, a new mini-van and a 2 year used SUV. Got good deals on both and I get to enjoy the extra $700 a month that would otherwise go into leases for these vehicles. Sure, I'm driving a 2008 SUV while my wife drives a 2005 mini-van, but that suits us fine. No maintenance issues yet (knock on wood).

 

[flufhed]

My car, however, is part of my job. I meet clients and often take them to lunch with my car.

Agreed - that's a totaly different matter.Although I don't know that anyone has ever turned their nose up at someone who drove a 5 year old Toyota Avalon.

 

[FUBAR]

Owning a car beyond its payment years is a better decision if I only used to car for going to/from work, driving around etc.

My car, however, is part of my job. I meet clients and often take them to lunch with my car. My car is part of my appearance.

I purposely choose Lexus because it's in the "nice car" range; it says that I'm not cheap but not throwing money away on a 80k+ car.

If it's for your job, does your company pay for it? Mine doesn't do that (well, sort of, but I'm not driving it home).

 

[FUBAR]

My car, however, is part of my job. I meet clients and often take them to lunch with my car.

Agreed - that's a totaly different matter.Although I don't know that anyone has ever turned their nose up at someone who drove a 5 year old Toyota Avalon.

People probably aren't turning up their nose at a 1957 Chevy either.

 

[Jayrod]

I bought my 2000 Mitsubishi Galant brand new in early 2000. Paid for it for 5 years (probably ended up paying over 40K with interest). I've had one major repair in over 11 years and that was under the extended warranty, so I didn't pay a dime. There have been two fender benders in there, but my insurance covered that.

It has over 220K miles on it now and still gets me to and from work every day. Having that thing paid off was one of the reasons we were able to survive while I was unemployed/underemployed for over a year. The car doesn't look great anymore and if I had the money I'd get something else, but has been a life saver to this point not having to get something else.

 

[Cavalier]

I'm looking for a smaller, reliable car (think Honda Civic or Toyota Corolla) that's only a couple of years old and has less than 30,000 miles on it. What do I find? Well, most of these used cars are only a couple grand less than a brand spankin' new one! IMO, it really makes no sense to buy the used car unless you are extremely strapped for money. The new car is the better value. You will get more reliable miles out of it and have a later yeared car when you go to resale it at some point.FWIW, this car isn't for me.:rantover:

They up the prices for tax refund time. Best time to buy is at the end of the year.

 

[Doug B]

Right after Cash For Clunkers.

Cash for clunkers drives up used car prices.

Haven't read through the entire thread, but:Cash for Clunkers has had a big impact in recent years. Another thing is that over the last 20 years, it became "common knowledge" that buying a gently-used 2- or 3-year-old car made a lot of financial sense. Lots of self-help financial books and TV programs of the time helped popularize the idea.

This was really true around the late-80s/early-90s. Back then, you could get a 1987 model with, say, 25,000 miles for about 50-60% of that it cost for a new 1990 model. Once shoppers started snapping up the older vehicles, the demand for gently-used vehicles went through the roof.

 

[Raiderfan32904]

Who is "pouring money" into a car? There are very few repairs you could possibly need to a used car that would constitute one month's lease payment, let alone two or three.I understand liking to have a new ride, but financially your plan vs. mine is not even close. My vehiclehas been paid off for years. I had to replace the clutch, which was expensive, but still was only 3 payments on a new vehicle. And that was 2 1/2 years ago. Since then it's been oil changes and a set of new tires.

I "poured" money into my last new vehicle, back in 2003 bought a new Lincoln SUV. Paid about $32K cash. It was a great car to own during the warranty period. But as soon as the warranty was up, had several small items cost big money. For instance, a bad strut ended up costing $1500. A stuck shifter cost $1,350. New tires cost $1250. Add to that it was getting 15 MPH city when I bought it, and went down to about 9 or 10 MPH when I traded it in for $8K. And we only put 42K miles on the car. So to me anyway, it felt like pouring money into it.

 

[Insein]

Right after Cash For Clunkers.

Cash for clunkers drives up used car prices.

Haven't read through the entire thread, but:Cash for Clunkers has had a big impact in recent years. Another thing is that over the last 20 years, it became "common knowledge" that buying a gently-used 2- or 3-year-old car made a lot of financial sense. Lots of self-help financial books and TV programs of the time helped popularize the idea.

This was really true around the late-80s/early-90s. Back then, you could get a 1987 model with, say, 25,000 miles for about 50-60% of that it cost for a new 1990 model. Once shoppers started snapping up the older vehicles, the demand for gently-used vehicles went through the roof.

And then if you artificially eliminate the older vehicles, it drives them up even further.

 

[Man in the yellow hat]

I also found that there are some fantastic no money down lease deals out there. I know leasing doesn't always make a ton of sense, but if you can find a lease deal that's $100 per month cheaper than buying with no money down, it might makes sense for you.

Yes indeed. I just picked up a 2011 Subaru Legacy on a sign and drive lease. No money down. 10k miles per year. $219/month. I did bump the miles up, which raised the monthly payment. I paid $99 to have my plate's transferred and walked out with a safe, AWD car that gets good gas mileage. I looked to buy first, but couldn't pass up this lease.

 

[Juxtatarot]

Right after Cash For Clunkers.

Cash for clunkers drives up used car prices.

That was short-lived and never had an impact on the type of car the OP is interested in.

Wrong x 2

Right! We're doomed from Cash for Clunkers forever!!! Damn that government!!

 

[Arizona Ron]

Owning a car beyond its payment years is a better decision if I only used to car for going to/from work, driving around etc.

My car, however, is part of my job. I meet clients and often take them to lunch with my car. My car is part of my appearance.

I purposely choose Lexus because it's in the "nice car" range; it says that I'm not cheap but not throwing money away on a 80k+ car.

If it's for your job, does your company pay for it? Mine doesn't do that (well, sort of, but I'm not driving it home).

Consulting work, a portion of the lease is a tax write off.

 

[Arizona Ron]

Owning a car beyond its payment years is a better decision if I only used to car for going to/from work, driving around etc.

My car, however, is part of my job. I meet clients and often take them to lunch with my car. My car is part of my appearance.

I purposely choose Lexus because it’s in the "nice car" range; it says that I'm not cheap but not throwing money away on a 80k+ car.

Yes, if you are dealing with clients and the "look at me" factor is there, you need a newer car.FACT

schtick thief!

 

[zed2283]

I went through the same thing about 3.5 years ago. Bought a new car. I had always bought used cars up til then, but hadn't bought one since '96 so I can't say exactly when things changed.

 

[newteech]

Judge Smails had a great thread on saving money buying a used car awhile ago

link

 

[Man in the yellow hat]

Always get new cars leased. I have a brand new car every three years and never worry about maintenance. Lease deals are great now, just got a new Lexus for what it would cost to own a lower tier model. Sure I'll never "own" it, but who wants to drive an old premium car when you can drive a brand new one?

LOOK AT ME, I'M MADE OF MONEY!!!11For those of us who don't like throwing money down the drain and don't feel the need to have a new car every few years, buying a new car makes a lot more sense.

I don't want to get into a huge lease vs. buy debate. But, the flip side here is your new car just lost a significant chunk of its value when you drove it off the lot. So you did throw money down the drain on the purchase, just in a different way.There are pros and cons to both, and it really depends on your situation.

I was always a buy a car guy, and I drove my last car for over 10 years and put 160,000 miles on it. But the lease deal I found was too good to pass up for me.

 

[eoMMan]

Owning a car beyond its payment years is a better decision if I only used to car for going to/from work, driving around etc.

My car, however, is part of my job. I meet clients and often take them to lunch with my car. My car is part of my appearance.

I purposely choose Lexus because it’s in the "nice car" range; it says that I'm not cheap but not throwing money away on a 80k+ car.

Yes, if you are dealing with clients and the "look at me" factor is there, you need a newer car.FACT

schtick thief!

Trying to help you and give that schtick some legs....

 

[Andy Dufresne]

Right after Cash For Clunkers.

Cash for clunkers drives up used car prices.

That was short-lived and never had an impact on the type of car the OP is interested in.

Wrong x 2

Right! We're doomed from Cash for Clunkers forever!!! Damn that government!!

I didn't say that either.

 

[Jaysus]

Owning a car beyond its payment years is a better decision if I only used to car for going to/from work, driving around etc. My car, however, is part of my job. I meet clients and often take them to lunch with my car. My car is part of my appearance.I purposely choose Lexus because it’s in the "nice car" range; it says that I'm not cheap but not throwing money away on a 80k+ car.

It also says that you are a commie. Get a Cadillac next time.

 

[eoMMan]

Who is "pouring money" into a car? There are very few repairs you could possibly need to a used car that would constitute one month's lease payment, let alone two or three.I understand liking to have a new ride, but financially your plan vs. mine is not even close. My vehiclehas been paid off for years. I had to replace the clutch, which was expensive, but still was only 3 payments on a new vehicle. And that was 2 1/2 years ago. Since then it's been oil changes and a set of new tires.

I "poured" money into my last new vehicle, back in 2003 bought a new Lincoln SUV. Paid about $32K cash. It was a great car to own during the warranty period. But as soon as the warranty was up, had several small items cost big money. For instance, a bad strut ended up costing $1500. A stuck shifter cost $1,350. New tires cost $1250. Add to that it was getting 15 MPH city when I bought it, and went down to about 9 or 10 MPH when I traded it in for $8K. And we only put 42K miles on the car. So to me anyway, it felt like pouring money into it.

Most cars shouldn't have many repairs before 42k miles.

 

[Buckna]

I'm looking for a smaller, reliable car (think Honda Civic or Toyota Corolla) that's only a couple of years old and has less than 30,000 miles on it. What do I find? Well, most of these used cars are only a couple grand less than a brand spankin' new one! IMO, it really makes no sense to buy the used car unless you are extremely strapped for money. The new car is the better value. You will get more reliable miles out of it and have a later yeared car when you go to resale it at some point.FWIW, this car isn't for me.:rantover:

It has been this way for Hondas and Toyotas for many years.

This is true too. Those brands really hold their value, and in addition to the Nissan/Infiniti brands are some of the best used cars you can buy, IMO.

Was going to say the same. Those two brands hold more value because of their name and a long earned reputation for quality. However, the quality of other brands has improved greatly in the last decade which the public is slow to pick up on. The result is that there are much better buys out there if you are going used. You are going to pay a premium for the Toyota/Honda name while you may only be getting a marginally better car.

 

[eoMMan]

Owning a car beyond its payment years is a better decision if I only used to car for going to/from work, driving around etc. My car, however, is part of my job. I meet clients and often take them to lunch with my car. My car is part of my appearance.I purposely choose Lexus because it’s in the "nice car" range; it says that I'm not cheap but not throwing money away on a 80k+ car.

It also says that you are a commie. Get a Cadillac next time.

Please see above where the Lincoln couldn't make it to 42k.

 

[[icon]]

Always get new cars leased. I have a brand new car every three years and never worry about maintenance. Lease deals are great now, just got a new Lexus for what it would cost to own a lower tier model. Sure I’ll never “own” it, but who wants to drive an old premium car when you can drive a brand new one?

I followed this logic for years (and may again), but I can tell you it is nice to not have a car payment every month. Frees up a lot of money to save or put towards entertainment.

Haven't had a car payment in well over a year. Don't plan on having one for years to come.

 

[Nugget]

Supply for new cars is extremely tight right now. Production delays due to the quake in Japan has taken 500,000+ cars out of production. Transportation companies are putting the extorting car manufacturers for more more money. There are capacity constraints through out the industy as suppliers down sized to far.

Used car prices, especially if the vehicle is fuel efficient, are going to continue to go up. Rebates on new cars are going to drop short term. We'll see what gas does this summer and how quickly more new vehicles can reach dealer lots.

 

[NCCommish]

Right after Cash For Clunkers.

Yep

 

[[icon]]

But as soon as the warranty was up, had several small items cost big money. For instance, a bad strut ended up costing $1500. A stuck shifter cost $1,350. New tires cost $1250. =

Jesus christ you guys were getting jobbed by the shop. Next time don't send your wife in to get the repairs made. Shops always screw over women with inflated auto-work.

 

[Sinn Fein]

There are two things in play right now - the aforementioned cash-for clunkers, but also the extreme drop in new car sales in late 2008 into 2009.

Cash for clunkers took a lot of cars off the road, but even without that the reduced sales of new cars would have a big impact on the supply of used vehicles. Typically, the best selling model years is 3 years back - so now we would be seeing a spike in sales of 2008 model year cars - except we went from 16 million new cars in 2007 to about 11 million new cars in 2008 - that is a 50% reduction in supply that is hitting right now.

The other issue is that dealers are getting smarter about inventory choices - there are several tools now available to dealers that help them identify the best selling/most in demand vehicles in their market. As more dealers turn to these tools, they are left "fighting" for the same vehicles - driving the cost of the vehicle up at auction, which in turn drives the price up for consumers.

The good news for everyone is that this will actually spur new car sales - the difference in price between new and late-model used will become so compressed that it will make more sense for the consumers to shift buying habits back to new cars. When that happens, the price difference will again expand making used cars a value proposition.

As someone in the auto industry, I am not particular to what people buy, as long as they buy something