The following post is from Melissa Batai
Buying a car is likely the second largest expense you’ll have after your house. Many financial gurus recommend buying a used car for good reasons—you’ll save on depreciation cost and you’ll have a smaller loan to pay (or you’ll be able to pay cash because it will cost you less).
These are important considerations and can certainly save you money upfront, but in my experience, buying a new car is the better financial choice over buying a used car.
Unexpected Repair Costs with a Used Car
If you buy a used car, you don’t know how the previous owner took care of the car or whether the owner sold the car because it was problematic. We’ve bought two used cars, and we’ve had significant problems with both of them.
My first car was a used Ford Escort. Unbeknownst to me, the college student who had it before me didn’t add oil to it frequently. I had that car for less than two years before it died with less than 70,000 miles on it.
A year and a half ago, my husband and I finally became a two-car family. We bought a certified Subaru Outback that had only 40,000 miles on it. Just to be sure, though, we also bought the warranty, even though it added more than $1,000 to our purchase cost.
At first, everything was fine, but after about six months of ownership, the car started burning oil. The dealership did an oil consumption test and said it was not burning oil. However, every 3,000 miles or less, we had to add oil. I complained to the salesman and the manager of the service department, and finally, the manager ran the oil consumption test again and acknowledged that we have an oil burner. He replaced the engine, which, thankfully, was covered on our warranty. This car does not yet have 60,000 miles on it.
No One Cares for a Car Like You
If you buy a new car, you alone determine how well it’s cared for and maintained. If you follow the recommended maintenance schedule, you’ll often have no problems with the car. That has certainly been my experience.
My first brand-new car was a Toyota Tercel. That car was unbelievably reliable and lasted nearly 200,000 miles. I only had to pay for routine maintenance.
Fourteen years ago, my husband and I bought a brand-new Toyota Sienna. That car is now almost 14 years old and has 192,000 miles on it. Sure, some things have broken like the automatic slide passenger door (we just don’t use that door now), but mostly, we’ve just had to pay routine maintenance costs. The car has never left me stranded, and I’m hoping it will go strong for several more years. Since we paid that car loan off in 3.5 years, we’ve been driving that car, with no costs except maintenance, for 10.5 years. Sweet!
Buy New and Keep the Car Until It Dies
In my experience, used cars don’t last as long as their new counterparts. After our latest experience with the Subaru, I’ve decided to only buy new and to keep the car until it dies. Sure, I’ll eat the depreciation cost when I drive it off the lot, but because I’ll keep the car for 14 years or more, that really doesn’t matter. What matters to me is that I’m the sole owner and take care of it properly so that it will last for years and years. In this situation, to me, buying a new car makes the most sense.
If you have a teen driver, or you only want to keep a car for a few years before buying a replacement, buying a used car may make more sense.
My Question for You
Do you prefer to buy a new or a used car? Why?