Comments on: Don’t Buy An Old Car

By: Hussain

Hussain — Thu, 30 Apr 2009 08:30:53 +0000

One question what is the oldest model car you can buy if you take advantage of the £2000 scrapage deal, if its all the latest e.g 2008/2009 models the £2000 is nothing no one will want 2 take finance out or loans as the credit crunch has effected alot. I like your self have a bmw e36 compact model a 1995 plated we have had it in the family for almost 8 years.

By: Brad

Brad — Mon, 16 Mar 2009 20:35:06 +0000

The best advice I can give you as a former new/used car salesman and finance manager is to take a look at your situation first. To purchase a decent car 3-5 years old your looking at paying $10,000-$20,000 depending on your tastes. Now…we are going to say you bought a 2007 Chevy Impala for $13,000. ADD sales tax…lets say 6%….now your up to $13,780 plus tag fees your now at $14,000. 95% of purchases are financed…anywhere from 4% – 21% interest depending on your credit history. If you take a 5 year loan at say around 12% you will actually pay close to $18,000 for the vehicle you originally only paid $13,000 for. Also the older the car the higher the interest…my local credit union cuts off their 4.9% financing @ 60 months on models 2004 and up, if older the rate is 7.9%.

Did you buy an extended warranty for $1500? (also offered is GAP insurance, Tire, Etch, Etc. ALL ADD UP!)…if you did you will pay close to $2200 for the warranty over 5 years. So great…you don’t have to worry about paying for a major expense covered by the warranty. I bought a 2002 BMW 325i in August of 2007 and paid $700 so far in repairs (now remember i have a BMW not a Chevy, my warranty was $3000 not $1500)

OK I’m covered! I have a 2007 car with a 3 yr/36,000 mile warranty and my payment is $350/mo for 5 years. I just paid a total of $20,000 for this vehicle and if I get sick of it in a week, a dealership will only give me $10,000 (or even less!) because they made $3,000 over what they traded it for (not profit they may have put brakes, etc.)

I paid $8,000 cash for my previous vehicle, drove it for 6 years and put maybe $1000 in repairs (It was an Acura). If I want to trade it in a week I’ll probably get at least $6,000 for it.

In my situation, I’m 25 years old and wanted to buy a flashy car like the BMW…if I was conservative I would have purchased a vehicle around the same year, but probably would have bought a Honda, Toyota, or Nissan for around $10,000.

By: Usedfan

Usedfan — Mon, 29 Sep 2008 15:25:38 +0000

It is a fault to think that a new vehicle is a perfect mint machine. I know for a fact (family member in the industry) that a major US manufacture of cars has to repair 25% of vehicles before they are sold due to poor line work. Do you want to end up with a clunker that smells brand new. There are no gurantees even with brand new. Of course you probably can get the repairs done under warranty but it still sucks to have a new car and be taking it in all the time when you are paying through the nose for what you thought would be problem free.

By: james

james — Mon, 24 Jul 2006 23:00:47 +0000

buying new vs used is a subject that needs a lot of research and can’t be answered in a couple of paragraphs. A used Japanese car thats a few years old will stay reliable for years.
In general, Honda, Toyota, Nissan are fine to buy used.
A used Euro or American can may need more costly work. The only time its really economically better to buy another car is when the cost of repairs averaged out over a year exceed the value of the car. Thats seldom the case when you combine new car payment, insurance and reg costs and subtract depreciation. A car is completly depreciated after 10 years. leasing is almost always a losing situation economically.
My advice, stay away from any VW’s.

By: mbhunter

mbhunter — Thu, 27 Apr 2006 13:18:17 +0000

I bought a 12-year-old car after I totaled one in an accident. It was a 1989 Honda Accord with 151k miles. I sold it a couple of years later with 171k.

I was in a bit of a pinch but the guy let me use it for almost a week rather than rent a car. That was worth a couple hundred right there, so I paid him very close to what he was asking for it when I bought it.

By: kurt

kurt — Wed, 26 Apr 2006 18:35:21 +0000

Never buy a car from someone you know. Stuff breaks, and even if it is completely random, as it always is, the temptation to blame the seller can only strain your relationship.

By: Nico

Nico — Wed, 26 Apr 2006 15:03:27 +0000

I’ll chip in my 2c for an alternative where buying new *might* make sense. I think it all depends on how long you own your vehicles.

I’m still driving a Toyota that I purchased new in 1998. I have religiously maintained this vehicle, and to date it has had zero major repairs. Shortly before the orginal warranty was going to expire I took it into the dealer to have a handful of minor things fixed, other than that it has only had to have routine maintainance.

I think that there might be a case for buying new if you knew you would be driving the car for many years, and if you weren’t paying an excessive premium for being the first owner (most luxury cars). I think I am being rewarded today with a reliable vehicle that I know the complete history of.

Just one view…

By: Debt Hater

Debt Hater — Wed, 26 Apr 2006 13:57:37 +0000

Thanks for the post. My 2003 Altima is a great car, bought it new, but it’s got 59K on it already (drove cross country twice among other things) but it’s starting to act up already. The problems are minor and I planned to drive it until the wheels fall off (I hoped that had been later rather than sooner… but now I wonder). I pledged to only buy used after this because this would be the second time I can out upside down on my loan. But after reading this and everyone’s comments, I’m not so sure. I reall feel like a sucker when I buy new, but I don’t know enough about cards thoroughly inspect old cars. I’m thinking of sticking to certified used cars no older than 3 years. What do you think?

By: frugal mama

frugal mama — Wed, 26 Apr 2006 11:24:04 +0000

My car is a 1998 Mercedes Benz station wagon. I’ve only owned it for three years having purchased it from a gentleman who had a stable of Benzes and this was just one too many for him. It had 30,000 miles on it when I purchased it. In the three years I’ve owned it, I have changed the oil. Nothing else. I will need tires soon but the car is solid, comfortable, great hauling capability (you can actually put a recliner in the back without lowering the back seats), and it looks and drives amazing, too. The biggest feature is safety though. I am a stay at home mom and this car is so safe that if I get hit by a giant SUV whose driver is on the phone, drinking coffee, putting on lipstick and oh yea, driving too, my kids will be protected. I get 23 mpg which isn’t awesome but I can’t get much better without sacrificing the room I need. There are many people who cringe when they hear what I drive…ohh… you must be loaded. Must be nice not to worry about money. Wrong. We squeeze our pennies and live frugally. I’m going to drive this car into the ground and given the longevity of many M-Bs, it could last me another 20 years. I say this because a man living near me has an M-B wagon from 1980. It still has the original engine and transmission – and has 423,000 miles on it. We’ve had old beater M-B’s and have taken them up to 250k before selling them. Sometimes, paying extra for quality is a really good idea long term. Buyer beware of course, because all cars age irregardless of brand, and not all owners take care of them.
~FM

By: Matt

Matt — Wed, 26 Apr 2006 06:15:00 +0000

The very first car I ever owned was a 1987 Dodge Aries that I bought in 1995 for $800. It lasted me a year and a half, and did me the best favor a car can ever do for its owner…it died all at once, conclusively, in a fashion which made it abundantly clear that any attempt to repair it was stupid. My little Aries definitely earned her way into Car Heaven.

I spent most of the following 10 years being tortured by used cars that died one lousy stinking part at a time. Until last year, when I bought my 2000 Hyundai Elantra. Which has given me no trouble at all, until it recently started to have transmission issues. I’m hoping this is a fluke, and not the opening round of yet another game of diminishing returns.

My fiancee just bought a new Chevy Cobalt last week. Must be nice to have a pile of cash to spend.

By: Inchoate Random Abstractions

Inchoate Random Abstractions — Wed, 26 Apr 2006 04:22:10 +0000

I bought a 1999 BMW 323i from Carmax in April of 2003, with approx. 60k miles on it. My mechanic checked it out for me, but because BMWs are expensive to maintain, he encouraged me to buy an extended warranty. Thus far, the car has been trouble free. No major repairs, other than replacing a sensor 2 days after I bought it (under the free 30 day warranty) and a tire. Admittedly, I only drive 6k miles a year. So, that probably has a lot to do with it. And I’m what you call a ‘gentle’ driver. No jack rabbit starts or stops. My dad, on the other hand, drives as if he’s flying (used to be a fighter pilot). So, not surprisingly, he’s constantly replacing his tires and brakes. Anyway, I think Carmax does a decent job of refurbishing gently used cars. If you can stomach the price differential, I definitely think it’s worth taking a look at their ValueMax cars (usually older and with higher mileage), which is what mine was.

By: Martha

Martha — Wed, 26 Apr 2006 00:25:19 +0000

I bought my Uncle’s 1990 Toyota Celica with ~55k miles in 2003. It was a perfect car for me because i could pay for it in cash and not worry about car payments while in college. The only downside was that after 30k miles and 1.5yrs I cracked a head gasket That plus a cracked radiator, the need for new brakes and a clutch made me decide to replace my baby instead of fixing it. However I did donate my old car and got a (whopping) $1200 deduction for my taxes!

By: Terry

Terry — Wed, 26 Apr 2006 00:05:14 +0000

You get lucky, sometimes, and get a deal. I’m driving a 1989 Buick Century that now has 177,000-plus miles on it, and it’s a dream. I bought the car from my boss’s father for $1200. I knew the car was regularly serviced and generally well cared for. The body was perfect when I bought it, and the interior had very little wear. Unfortunately, my son backed into the right fender, busting out the turn signal and generally crunching the entire area, and it’s just too old to fix. As long as it runs, though, I’ll drive it the 75-plus miles or so a day I’ve been driving for the past three years I’ve had it.

By: MyFinancialJourney

MyFinancialJourney — Tue, 25 Apr 2006 20:26:57 +0000

I’m on the other end of the spectrum, I love buying old beaters. Granted I’ve probably been lucky because I know nothing about cars and do nothing in terms of maintenance, even oil changes are rare for me and I’ve had very good luck with my car not breaking down on me and not having to spend any money on maintenance. I think if you do your homework and don’t mind driving a beater it makes much more financial sense to buy beaters. I’ve seen a couple posts lately on this subject and pretty soon I’ll get off my lazy butt and finish my post about why beaters are the best….err well at least some advantages to buying a beater

By: LAMoneyGuy

LAMoneyGuy — Tue, 25 Apr 2006 19:07:42 +0000

In 2000, I bought a 1994 BMW with 51,000 miles. The mileage was low, and the car was in good condition, but the fact remained that it was a six year old car. I began to have recurring problems last year, and was forced to replace it. I drive quite a bit, and had over 160k miles on it when I sold it. I was hoping for another couple of years, and to reach 200k.