While the depreciation on a BMW or Mercedes is great, the cost to fix one doesn’t change. A used M3 with 35,000 might sound like a good deal at $32,000, if there is something even slightly wrong with it, you could be out several thousand dollars.

You also need to take into account finance charges and if there is a subsidised lease on the car. Many Cadillac leases are susidised by GMAC that turns $40,000 car into a no money down, $300 a month deal. Math will tell you that you paid $10,800 over 3 years for the use of a new $40,000 car. That’s cheaper than what its depreciation would be. If you run it through a business, you may be able to write off the payment as well.

There is more to car buying than just stating absolutes that used cars are always the better deal. A friend who recently purchased a 3 year old BMW 525 for $30,000, is finding out the hard way that the new Camry he was considering may have been the better deal

I also agree with the poster who said that used Tauruses are great deals. I bought a used 2002 Taurus in 2003 that was previously a rental car with 23K miles. It now has 108K miles on it and I never had to fix anything on it. The seats are the most comfortable seats I ever sat in. And don’t think that I only sit in “crappy” cars: I am an actuary, so most of my colleagues drive luxury brands and I have sat in a lot of them.

And I thought I did good with a ‘91 Eclipse GS turbo I bought a few years ago for $2,500. Drove it for 2.5 years, 25K miles, and sold it for $3,000. Man, those deals are hard to come by but sure are gratifying when you can find them.

I occasionally get asked about looking at a new car, what car someone should buy, etc. When it’s one of my friends that do not earn that much money, I usually recommend:

1. Small car? Dodge Neon. I’ve seen 1 year old models with very low miles go for 4 to 5k. I’ve seen a few 3 year old models for go for $1500. Mercury Cougar is a good buy too. My dad has had his for 2 years and book value is still higher than what he paid.

2. For those that need bigger transportation, the Taurus makes a good choice. 2 year old models with 35k miles routinely go for pennies on the dollar.

3. For those that have kids and need something bigger, the Mercury Villager (or it’s Nissan sister) sells for almost nothing. Not the best minivan, but it’s better than spending 29k for new Honda or Toyota.

Grant it, all of these cars are not the best, nor are they the most exciting cars on the road, but when your getting a 2005 Taurus for 3k versus it’s 22,000 MSRP, it’s hard to lose.

Unfortunately, some people are just stupid and want to buy the most expensive model possible or one that doesn’t suit their needs. One of my friends with 3 kids, two bankruptcies and driving a Plymouth Sundance wanted a new car — I recommend those above, he bought a 2006 Suburban. It’s now repoed and he’s back to the POS Sundance

A Ford Crown Victoria Police Interceptor that has seen non-police duty (owned and driven by city officials) can often be an excellent deal. I’ve been through three of them myself.

The Scions are going to hit depreciation a bit harder this year. The Xa is/was unpopular, the Tc will probably outperform all sports coupes except the Acura, the Xb will get hit but has the best chance of becoming a cult classic. The Xb is actually one of the few enduring vehicles that Toyota has produced in recent memory. Toyota hasn’t built what I would term a ‘classic’ since the last generation Supra.

Car collector auctions are very unique creatures. Virtually all the norms of dealer and certain public auctions are reversed. Keep in mind that with any of these auctions you are not under the obligation to buy just because you put your hand up. The auctioneer is not a judge even though the gavel may give you other ideas.

I often find the book numbers a bit unbelievable, and for cars less than 2 years the methods they use to determine values are challenged.

However, your example shows only what someone with excellent market knowledge will do. Often, used car buyers do not compare to new, and the deal is done. The net has reduced this practice, but over a decade ago, you could easily find used cars marked higher than new ones on the next lot.

Bonus is they are owned by old people, who never go over 50 mph, or park them outside, etc.
You buy a 2 year old one with 30,000 miles at half of MSRP, and you are good to go for another 150,000 miles.

So if a used one was parked next to a new one, what would the difference have to be before you’d buy the used one? At $600, I’d pick the new one every time. This is where the ‘market’ determines the real transaction price, not the book value. Books don’t buy cars.

I myself drove cars through dealer auctions in 1992 and ‘93, so I got an interesting insight into these auctions. Yes, titles were sometimes wiped even at these auctions – until “60 Minutes” did a piece on how cars that had been stolen or wrecked or both had their histories obscured and then stolen. That led to auctioneers making announcements of “salvage title.”

In fact, “salvage title” cars are some of the best bargains going, since it might simply mean the car was stolen for a joyride, and later found by the police, relatively unscathed.

Certain collector car auctions, around the county are essentially dealer auctions. Silver Auctions held a collector car auction in Portland, Oregon on March 31, where a 1975 AMC Pacer DL was bought by Monte Shelton, a collector himself and a Jaguar dealer, for just $3550.

Two weeks later, he entered it in the Portland swap meet and was asking $8,900, after putting in some seat inserts and a new windshield. Last I heard, he had dropped the price by $500 and was still looking for a buyer.

Sure, I respectfully submit the example of Overstock.com. Overstock.com was selling NEW Crossfire’s for 21-23k last year; albeit, not optioned out. Nor SRT6 versions.

So, one year ago, you could buy a new vehicle made 85% by mercedes with that beautiful 3.2 liter engine in it.

I bought a 2005 Saab 9-2x Aero for 18,600. 5-spd, heated seats. No other options. I traded it in…not even private party…after 9 months and 9000 miles and got 20,500 for my trade-in. And in PA you do not pay taxes on the purchase of a vehicle for the amount you trade-in.

There are sometimes good reasons to buy new; there are sometimes good reasons to lease. And there are sometimes good reasons to buy used. All based upon what you are looking for, and what your situation is…

Joe O.

People (jokingly/chokingly) say that about their marriage…You made the better decision.

Agreed. Never buy a Vette as a mid-life crisis car. Nothing good can come of it. Not even whats-her-name.

i have an older vehicle with 166K on the clock. it still runs just fine, but little stuff keeps breaking and it’s somewhat of a pain. it’s loud, slow, and unsafe by modern standards. going by it’s true life expectancy, it’s probably only half used up–but going by it’s annoyance life expectancy, it’s about 90% gone.

That is not necessarily true. The Caddy CTS-V may not be a class leader, but is hardly second tier, IMHO. Audis in general have had relatively high depreciation rates. You can get a great deal on Porsche Cayennes and Boxsters. Expensive cars tend to have high depreciation rates, whether first or second tier.

2006 Cobalt with 30K miles: half price/50% life left (just because it’s still running doesn’t mean it’s worth keeping).
Three year old WRX: 30% off, 30% used up.

A Cobalt has a life expectancy of only 60,000 miles? I’ve never driven a Cobalt, nor know anyone that owns one, but that seems low, doesn’t it?. But if it is true, GM is in worse trouble than I thought.

Not waiting until you’re having a midlife crisis was a good idea.

All of the Corvette owners I know are 45 or older and are afraid to get it wet, scratched, or over 75mph. I hope you’re enjoying yours!

I’ll do something foolish before too long…

If you drive less than the average person and can tolerate the second tier brands and models, there are definate advantages to buying used.

The point is that I don’t expect to receive the same overly aggressive ‘cash on the hood’ incentives on a Vette as I would if I were buying a Cobalt. Which makes me think that buying a 2006 for 20% under MSRP was a good idea

Funny because I have a convertible Corvette reserved from Hertz in Orlando this summer. It replaced the Cadillac XLRs they use to have.