New Or Used: Keep Fit Or Blow It?

Sajeev Mehta and Steve Lang
by Sajeev Mehta and Steve Lang
new or used keep fit or blow it

Anonymous writes:

Last year my Ranger blew up on me and all I had to my name was about $500 and a motorcycle. I’d gone through a string of bad cars and decided to go the new route, trading in the motorcycle (it was impossible to sell, no bites) and getting a 2011 Honda Fit. It’s a great car, and as it’s brand new, has needed no maintenance. I’m now making a loan payment of $230, with an extra $60 in insurance.

One of the reasons I didn’t get a loan for a used car was that the used car market here in Oregon is particularly awful. It seems that the cheap, well-maintained $3000 Honda Civics and Toyota Corollas with 110k on them from five years ago are all gone (or not up for sale).

Indeed, even as prices for used cars go up into the $8k range (and beyond), it seems the cars just get later in model year, but not higher in actual quality with attention to proper care and so forth. For the most part, my experience has been that the used car market here has dried up. You have a choice of cars, all with 140k on them and in various states of disrepair, your only choice is how expensive and what year you want. I kid you not, there was a local craigslist ad here in town for a 1987 Toyota Camry Wagon that said $5200 FIRM on it. Oh, goodness.

I’ve put the Fit online, and have some bites but I have no idea if I want to sell it or not. The idea is to come out with around $5000 in cash, spend $4000 on a car and keep $1000, plus the added benefit of around $300 in savings each month. I have a couple of questions for you.

First, how difficult is it to sell a car you still don’t own (the Fit)? Is it a total pain?

Second, is the used car market starting to come down a bit in exorbitant pricing? I’m starting to see a *few* cars online that might be worth the trouble but I’m still leery.

Should I make the move to my comfort zone, a used car and no payment, or should I keep the stability of my new car?

Steve Says:

It sounds like you have commitment issues, not car issues.

There is nothing wrong with paying off a loan and enjoying 10+ years of no payments. Throw in 30+ mpg’s, minimal maintenance for a lot of that long haul, and a past track record for exceptional reliability, and it looks like you have finally found yourself a keeper.

I realize that it’s tough to read an enthusiast site and buy nothing for 10 years plus. On the other hand, the Fit fills in a nice niche that was partially occupied by the Mazda Protege 5 back in 2002.

Sporty, fun to drive, cheap to own.

I would argue that the Protege is a competitive vehicle in today’s world, and that a decade from now the Fit will settle in that same square hole.

Keep the Fit, and invest in your long-term sanity.

Sajeev says:

Steve nailed it: you need to focus on your sanity. Reselling a car for your “payoff+profit” asking price isn’t gonna work smoothly. I guess if you wait long enough, the right buyer will come along…but that’s not a healthy outlook.

I’ve heard that the sky-high, 2-5 year old used car market is letting up a little bit in some urban areas, but will it last? I have too much uncertainty in the economy, political elections or not. And if the economy gets worse, used cars are a better option. Combined with the, um, automotive density of Oregon (relative to my Houston habitat) and that you want an inflated(?) asking price/profit margin for your Fit, I can’t give you the answers you wanna hear for questions 1 and 2.

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3 of 47 comments
  • Cutchemist42 Cutchemist42 on Aug 27, 2012

    Ugh, I hate my Protege5. How someone never got a good class-action lawsuit going against Mazda is beyond me. They MUST have known about the rust issues.

    • Kevin Jaeger Kevin Jaeger on Aug 27, 2012

      The small Mazdas are fine cars but I've certainly seen a disturbing number of prematurely rusted Proteges and 3s up here in Canada. I hope Mazda has solved this problem by now and some seem to have held up fine. But the ones that rusted look like the earlier rust buckets from the malaise era.

  • SunnyvaleCA SunnyvaleCA on Aug 27, 2012

    It sounds like you aren't enjoying your payment+insurance. If you were going to keep the insurance coverage anyway, maybe it makes sense to refinance the car. My credit union is offering 2.25% interest on used car loans. That would reduce your payment in two ways: lower interest rate and re-setting the 5 year term. Having no loan and only liability insurance might save money, but you'll be adding risk. What if the $4k car you purchase needs repairs? What if you're saving lots of money by canceling your comprehensive and collision insurance but then you have a collision? Since your car is already 2 years old, you've taken the worst part of the depreciation hit. There isn't much sense switching out now after most of the financial damage has been done.

  • Probert Sorry to disappoint: any list. of articles with a 1 second google search. It's a tough world out there - but you can do it!!!!!!
  • ToolGuy "We're marking the anniversary of the time Robert Farago started the GM death watch and called for the company to die."• No, we aren't. Robert Farago wrote that in April 2005. It was reposted in 2009 on the eve of the actual bankruptcy filing.The byline dates are sometimes strange/off with the site revisions (and the 'this is a repost' note got lost), but the date string in the link is correct (...2005/04...). Posting about GM bankruptcy in 2005 was a slightly more difficult call than doing it in 2009.-- The Truth About Calendars
  • Kat Laneaux Agree with Michael500, we wasted all that money just to bail out GM and they are developing these cars in China and other countries. What the heck. I understand the cheap labor but that is just another foothold the government has on their citizens and they already treat them like crap. That is pretty disgusting to go forward to put other peoples health and mental stability on a crazy crazed, control freak, leader, who is in bed with Russia. Thought about getting a buick but that just shot that one out of the park. All of this for the greed. They get what they lay in bed with. Disgusting.
  • Michael500 Good thing Obama used $50 billion of taxpayer money to bail them out and give unions a big stake. GM is headed to BK again with their Hail Mary hope of EVs. Hopefully a Republican in office will let them go BK the next time, and it's coming. The US economy is not related/dependent on GM and their Chinese made Buicks.
  • MaintenanceCosts "Rural areas hardly noticed COVID at all."I very much doubt that is true in places like the Navajo Nation or the Kenai Peninsula in Alaska, some of which lost 2% or more of their population to COVID.No city had a death rate in the same order of magnitude.Low-density living is a very modern invention. Before cars, people, even in agricultural areas, needed to live densely to survive.