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Thread: Save money - Say no to new!

  1. #1
    Vulture of The Western World Eric's Avatar
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    Save money - Say no to new!

    Say no to new
    By Eric Peters
    for immediate release

    I wouldn't buy a new car. If you're smart (about money, anyhow) neither will you. And I write this is a guy who writes about new cars for a living. They're mostly very nice. But if you think you're making an "investment" when you purchase one, well, think on it some more.

    It's been said that, adjusted for income, today's cars don't cost any more (or significantly more) than the cars of the "good old days" -- back in the '60s and '70s. Maybe. Among other things that could be said here in opposition to this, there was no analog back in the '60s to $45,000 SUVs -- which are today fixtures of the "family car" market. Maybe a compact car like the Honda Civic costs about what a typical family car cost back in the '60s -- but it's also lot smaller and has a lot less character than, say, a '70 Olds Vista Cruiser.

    But the larger point -- the one that's beyond debate -- is that peripheral costs of new car ownership are obnoxiously high today. In particular, in states where there are personal property taxes on motor vehicles (here in Virginia, it's informally known as the "car tax"). Buy new -- and you'll get screwed. Not by the dealer (necessarily, anyhow). But by the state -- fully, completely, absolutely. And for years on end -- until the car has depreciated in value to the point where the tax -- which is based on assessed value -- has dropped to a mere couple hundred bucks or so annually.

    In Virginia -- and the other states that have taxes of this kind -- a $45,000 SUV or luxury car can end up costing you $1,000 or more per year in personal property taxes. Over the typical five-year new car loan period, that's five grand -- just for the personal property tax. With that sum, you might have bought a perfectly serviceable used economy car (something like a 5-6 year-old Toyota Corolla, let's say) and paid a fraction of the taxes -- and a fraction of the new car purchase price. Plus, the used economy car won't lose half its value during the first year you own it.

    These property taxes are very much a part of the true cost of any new car, whether they're listed on the MSRP "sticker" or not. Trouble is, many people do not take them into account when they go shopping. It's only afterward that they realize -- oops! -- they may have gotten in too deep.

    Insurance is like that, too. Many people forget that they will have to find and pay for a full coverage policy (assuming they took out a loan for the car) and that the cost to insure a brand-new car vs. what they were driving before could be double, triple -- even more. It will be more, in any case -- regardless of your driving record -- for the simple reason that the premium is based in part on the higher repair/replacement cost of the new vs. the old car. Like property taxes, it, too, must be factored into the total cost equation. Buy something a few years older and you insurance costs will be lower -- especially if it's a paid-for older car and you can skip comprehensive coverage in favor of a basic policy that can be significantly cheaper.

    The final thing about new cars that can rise from the depths to bite you on the toochas is repair/maintenance costs. While it's absolutely true that modern cars are (overall) much better-built and far more reliable than the cars of the '60s and '70s, it's also true that when something does go wrong, it can be a lot more expensive. A couple of catalytic converters, for example, can be $500 or more. That used to buy you a whole exhaust system. And minor parts like headlamp assemblies have prices that will absolutely floor you. Night-time illumination is probably 100 percent improved, now vs. then -- but the price of progress isn't low.

    The one saving grace here is the new car will be under warranty -- so whatever breaks will be someone else's problem (at least insofar as the money is concerned). But the warranty only lasts so long -- even today, it's frequently not more than 3-4 years on popular models. When time's up, you're the one holding the bag. Buy a used car and all that money you saved up front and on property taxes/insurance will be on hand to cover whatever falls apart of just quits working. You'll still come out way ahead. Trust me on this.

    There's a reason why so many guys who make their living writing about new cars only drive used cars themselves. It's not that we're poor. It's that we're wise to the game.

    You can be, too.

    END

  2. #2
    jillsuncle
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    Re: Save money - Say no to new!

    I say NO to any ride that is not masterminded by ME! I never buy used or rental cars. We only live once as far as I know. Those who can't afford to drive probably should buy a bitchin' moto cycle - that's rich! ;D

  3. #3
    jillsuncle
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    Re: Save money - Say no to new!

    Great used car:

    1972 2 door Fleetwood Cadillac. I'll take on in Black with tan leather seats and a genuine 472 under the hood. Now that is a Pimp wagon!
    8)

  4. #4
    Vulture of The Western World Eric's Avatar
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    Re: Save money - Say no to new!

    Quote Originally Posted by jillsuncle
    I say NO to any ride that is not masterminded by ME! I never buy used or rental cars. We only live once as far as I know. Those who can't afford to drive probably should buy a bitchin' moto cycle - that's rich! ;D
    That's what I do! (I think you'll dig my Kz900.. looking forward to showing it to you... also the ZRX1200.)

  5. #5
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    Re: Save money - Say no to new!

    I have to disagree with you here and you touched on the reason. Warranty. Although I understand a lot about what is going on with my car, I'm also partially disabled, so fixing it isn't in the picture. When I bought my new Sonata on Saturday, I sprang for the extended warranty. It will cover pretty much EVERYTHING for 10 years or 100,000 miles. That means I won't be buying new tires or brakes or belts or any of that stuff for pretty much the life of the car. If GM had had a similar extended warranty when I'd bought my Buick a few years back, I wouldn't have had to buy all the stupid window regulators I've had to buy (GM still owes me for one and I've got another one that's gone bad). I'm one who does take care of my car and make sure it gets its scheduled maintenance, etc. I know that it depreciates considerably when I drove it off the lot. I know I'll have to pay tax on it (prorated until next April). I've never regretted buying a new car. Ever.

  6. #6
    JohnB
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    Re: Save money - Say no to new!

    Dunno Eric:

    There are some cars that you can't buy "used". Before I bought the new G/M I looked for a low mileage 2-3 YO Crown Vikie or G/M.... They are just NOT avaialble, at least not at a decent price. Everyone that comes in for trade goes into the livery service, period.

    I got a pretty good deal once you consider that I got the color and packages I wanted without having to special order.

    BTW, I computed the fuel mileage that I got during this last trip to SFO, including the running around we did in town for 4 days and it came up to 24.6 MPG. I think that it's just begining to get "broken in", the odo just turned over 7,000.

    Not bad for that size barge with my lead foot!

  7. #7
    D_E_Davis
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    Re: Save money - Say no to new!

    Quote Originally Posted by JohnB

    There are some cars that you can't buy "used". Before I bought the new G/M I looked for a low mileage 2-3 YO Crown Vikie or G/M.... They are just NOT avaialble, at least not at a decent price. Everyone that comes in for trade goes into the livery service, period.
    Around here at least half the taxis on the street are the "Police Interceptor" model of the CV, so there must be some available and not really thrashed, either.


  8. #8
    Vulture of The Western World Eric's Avatar
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    Re: Save money - Say no to new!

    Quote Originally Posted by D_E_Davis
    Quote Originally Posted by JohnB

    There are some cars that you can't buy "used". Before I bought the new G/M I looked for a low mileage 2-3 YO Crown Vikie or G/M.... They are just NOT avaialble, at least not at a decent price. Everyone that comes in for trade goes into the livery service, period.
    Around here at least half the taxis on the street are the "Police Interceptor" model of the CV, so there must be some available and not really thrashed, either.

    We seem to have a decent supply; the local store (an independent dealer) has at least two...

  9. #9
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    Re: Save money - Say no to new!

    I'll add that expensive options (like Xenon headlamps) are really expensive to fix, as is DSTC, and turbos.

  10. #10
    D_E_Davis
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    Re: Save money - Say no to new!

    Quote Originally Posted by dBrong
    I'll add that expensive options (like Xenon headlamps) are really expensive to fix, as is DSTC, and turbos.
    DSTC?


  11. #11
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    Re: Save money - Say no to new!

    DSTC - dynamic stability and traction control (Vovlo's achronym)

  12. #12
    D_E_Davis
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    Re: Save money - Say no to new!

    OK, and tnx.

  13. #13
    JohnB
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    Re: Save money - Say no to new!

    Quote Originally Posted by D_E_Davis
    Quote Originally Posted by JohnB

    There are some cars that you can't buy "used". Before I bought the new G/M I looked for a low mileage 2-3 YO Crown Vikie or G/M.... They are just NOT avaialble, at least not at a decent price. Everyone that comes in for trade goes into the livery service, period.
    Around here at least half the taxis on the street are the "Police Interceptor" model of the CV, so there must be some available and not really thrashed, either.

    Most PDs recycle their cars at set mileage points. LAPD does. The cars get impecable maintenance though. I wouldn't hesitate to buy an old LAPD car, specially a "plain wrap" or a "slick top" (Regular B&W but without the light bars)

    Also, you can buy a "Police Interceptor" if you're buying fleet quantities or don't mind paying full price without any discounts.

  14. #14
    D_E_Davis
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    Re: Save money - Say no to new!

    Quote Originally Posted by JohnB

    Most PDs recycle their cars at set mileage points. LAPD does. The cars get impecable maintenance though. I wouldn't hesitate to buy an old LAPD car, specially a "plain wrap" or a "slick top" (Regular B&W but without the light bars)

    Also, you can buy a "Police Interceptor" if you're buying fleet quantities or don't mind paying full price without any discounts.
    These taxis are bought used - the spotlights and the front push bars are signs of prior police service.


  15. #15
    JohnB
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    Re: Save money - Say no to new!

    Quote Originally Posted by D_E_Davis
    Quote Originally Posted by JohnB

    Most PDs recycle their cars at set mileage points. LAPD does. The cars get impecable maintenance though. I wouldn't hesitate to buy an old LAPD car, specially a "plain wrap" or a "slick top" (Regular B&W but without the light bars)

    Also, you can buy a "Police Interceptor" if you're buying fleet quantities or don't mind paying full price without any discounts.
    These taxis are bought used - the spotlights and the front push bars are signs of prior police service.

    That's a good testimonial to the overall build of the cars. They can endure 7/24 operation on police patrol and then go on to a second life in the livery service...

    I have seen brand new Yellow Taxis in LA that are PI models. All the Police Interceptor have that the run of the mill C/V doesn't is larger brakes, stiffer suspension, a bit taller rear end, silicone rubber hoses in the cooling system, a door reinforcing bar, vinyl seat covers and rubber mats. Also less chrome and steel rims instead of aluminum ones. There's no longer a different "tuning" of the engine but there's an outboard trans cooler and an engine filter cover with fins for heat disipation. I think, but not sure, that they also have a larger alternator.

  16. #16
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    Re: Save money - Say no to new!

    I think they have a larger alternator too, and may have a 2nd battery.

    Have you seen the replacements for the rear seats that allow handcuffed suspects to ride more comfortably?
    Like the fiberglass seats at McDonalds (easy to clean!), but with depressions molded in for their arms, etc.

    Chip H.

    Former owner: 2012 Honda Civic LX, 2006 Honda Ridgeline RTL, 2000 Honda CR-V EX, 2003 MINI Cooper S, 1992 Honda Accord LX, 1999 Mercedes ML-320, 1995 VW Jetta GLX, 1991 Mercury Capri XR2, 1981 Mercury Zephyr, 1975 Chevrolet Impala

  17. #17
    JohnB
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    Re: Save money - Say no to new!

    Quote Originally Posted by chiph
    I think they have a larger alternator too, and may have a 2nd battery.

    Have you seen the replacements for the rear seats that allow handcuffed suspects to ride more comfortably?
    Like the fiberglass seats at McDonalds (easy to clean!), but with depressions molded in for their arms, etc.

    Chip H.
    Not only seen them, rode in them ... no, not what you think, I used to work for LAPD and we often took a B&W when going out to lunch or on an errand.

  18. #18
    Rocketmann
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    Re: Save money - Say no to new!

    Eric,

    I have to disagree with you on several points.

    <<Insurance is like that, too. Many people forget that they will have to find and pay for a full coverage policy (assuming they took out a loan for the car) and that the cost to insure a brand-new car vs. what they were driving before could be double, triple -- even more.>>

    I have never seen that in my entire life's experience. And even if insurance went up a little, it was barely noticeable. Certainly not double or triple.

    << It will be more, in any case -- regardless of your driving record -- for the simple reason that the premium is based in part on the higher repair/replacement cost of the new vs. the old car.>>

    Replacement, yes. Repair, no. And since cars get into accidents far more often than they are stolen, there too I have never seen premiums increase more than slightly, if at all. It costs the same thing to replace a quarter panel on a 2001 BMW as it does on a 2007 BMW, or any make/model for that matter. Certainly you'd agree that the labor rate is the same for new or 10 yr old. The only possible difference could be parts, and I'd challenge you to demonstrate that Part X for a 5 yr old car is significantly cheaper than that same Part X for a brand new car. In a lot of cases it's the same part.

    << . . . especially if it's a paid-for older car and you can skip comprehensive coverage in favor of a basic policy that can be significantly cheaper.>>

    That's conventional wisdom, but often not true in reality. Most people are not willing to drop comp/coll on a 5 yr old car that might be worth $5-10k, especially comp. Comp & collision cost maybe 3-5% of a car's FMV. That's not a lot of money to protect what's a significant asset for most people.

    <<The final thing about new cars that can rise from the depths to bite you on the toochas is repair/maintenance costs. While it's absolutely true that modern cars are (overall) much better-built and far more reliable than the cars of the '60s and '70s, it's also true that when something does go wrong, it can be a lot more expensive.>>

    There too, an a/c compressor on a 5 yr old car is going to cost pretty much the same as one on a new car, and it might even be the same part. Ditto for 99% of the parts on a car.

    * * * * * * * * * * * *

    My personal view is that you get your most bang for the buck buying a car 6-18 months old with 5-15k miles on it and then keeping it until about a year after the warranty runs out. From a pure financial standpoint, you might come out ahead keeping a car for 25 years, but who the heck wants to be driving around a 1983 Oldsmobile. The combination of repair/maint and depn costs on a 5-8 yr old car come pretty close to the carrying cost (lease pmt or financing cost) on a new car. Not the same, but close.

    Anyone who's thinking about buying a car should analyze total cost over their projected holding period, including what they'll sell it or trade it in for at the end. This methodology accurately counts depn, the biggest cost of ownership, which most people ignore when shopping for a new car.

  19. #19
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    Re: Save money - Say no to new!

    Quote Originally Posted by Rocketmann

    My personal view is that you get your most bang for the buck buying a car 6-18 months old with 5-15k miles on it and then keeping it until about a year after the warranty runs out. From a pure financial standpoint, you might come out ahead keeping a car for 25 years, but who the heck wants to be driving around a 1983 Oldsmobile. The combination of repair/maint and depn costs on a 5-8 yr old car come pretty close to the carrying cost (lease pmt or financing cost) on a new car. Not the same, but close.

    Anyone who's thinking about buying a car should analyze total cost over their projected holding period, including what they'll sell it or trade it in for at the end. This methodology accurately counts depn, the biggest cost of ownership, which most people ignore when shopping for a new car.
    I agree with most of what you are saying. The trick is to ditch the car before you are repairing it more than say twice a year. Of course, if you own a domestic make, you are more likely to be dumping money into it throughout, or at least after the warranty expires.

    My direct experience with my 2001 Saturn L100 is as follows:

    2002 - Clutch slave cyl $250.00 - 39,000 miles
    - Turn Signal Switch - $133.00
    - Tires $400
    2003 - Intermediate shaft $175 (steering)
    2004 - Turn signal lights $300
    - A/C Repair $200.00
    - Tires $400
    -Stabalizer Bar links - $100 (repair done by me)

    2005 - Struts and Clutch Repalcement - $1900
    - Tires - $400

    2006 - FI Cleaning x2 (bad gas) - $200
    - Turn Signal Switch $465

    I'm not counting routine maintenance in this list, just major wear items and repairs. The latest one with the switch is ridiculous.

    Overall, I'd say that it is still cheaper to maintian this car versus doing the car payment thing. If I start to have years like 2004 and 2005 again, I'll be looking to replace this vehicle. Until then, I'm okay with things as they are, although I miss the new car smell. That is why I use the hell out of air freshener to keep this vanilla sled on the road.




  20. #20
    Rocketmann
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    Re: Save money - Say no to new!

    <<Of course, if you own a domestic make, you are more likely to be dumping money into it throughout>>

    So if you know that (and I agree with you), why do you own a Saturn? 999 times in a thousand, you'd never have those problems with a Toyota or Honda.

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