Used car prices are up 75% since 2010. Meanwhile, new car prices have risen only 25%. Is the advice to buy used as valid as it used to be?

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> Used car prices are up 75% since 2010 **Where “used car” is defined as being 10 years old.** The great recession was happening 10 years ago, and new vehicle sales plummeted by about 6 million units. That also means 6 million used cars weren’t “made” that year. Sales didn’t recover until about 2015. It shouldn’t surprise anyone that used car prices are high right now. > Is the advice to buy used as valid as it used to be? Yes. Most cars still depreciate precipitously in the first year of ownership. But it may be smarter to buy a “less used” car versus a nearly worn out 10 year old example. *As always, the value in buying used will vary by model. Some depreciate more than others, and sometimes manufacturers crank up the incentives on new vehicles.*

Starkeshia

Yes. Buying used still makes sense since you’re avoiding some of the steepest depreciation in the cars lifecycle. However, what it does mean is that this sub’s fascination with buying a reliable $5k car is becoming a pipe dream.

dirty_cuban

No car is an “investment”. They all depreciate. The questions is what is going to give you the best value and what your priorities are. If you value a full vehicle warranty for many years, knowing you will have years without any major repair bills, and value being the first/only owner, then a new vehicle may make more sense. It’s not “wrong” to buy a new car. If you look at it purely from a financial standpoint, then a slightly used car is a better value, but that’s assuming you’re only looking at it from the standpoint of what’s going to cost me the least amount of money overall. If you can afford something, and you value it, then buy it. I’ve never bought the “people who buy new cars are stupid” line.

swalsh411

I know this won’t be a popular statement in this sub, but I always argue the fact that your new vehicle does not plummet in value as soon as you drive off the dealer’s lot. What you actually experience is the difference in selling power between a dealer and private party (arbitrage), which dealer’s take advantage of when buying and selling used vehicles. Taking a look at late model dealer prices for used vehicles will give you a clearer picture of depreciation, whether you buy new or used you are still going to experience the difference between dealer and private party selling power. This being said, certified pre-owned will often be the best value and sometimes comes with a better warranty than new!

moto_gp_fan

If you buy direct from a seller, it can still make a lot of sense. Buying from a dealer, I don’t think so. At least, that’s been my experience. Dealers seem to price used cars far too aggressively imo. We’ve only had one new car; for us, I think it was a great investment – we ran it for more than 300K miles. Right now, we have a car we bought 10 years old, about 90K miles – Honda Civic. We’ve had it for four years, runs great – but the seller had every single receipt for every thing ever done to the car, and he was really diligent about maintenance. I knew as soon as I saw him whip out that giant binder, we were in business.

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