Sell or Hold Used Car and Buy New?
Sell or Hold Used Car and Buy New?
My spouse and I have an eight year old Civic with around 115,000 miles that we purchased used about five years ago. It was purchased with around 30,000 miles on it. It is generally in good condition as we have kept it up at a local mechanic. I was looking at what we would get if we sold the car and it looks like, on cursory glance, we would get about $2,500 less than what we paid for it, in all likelihood due to Covid driving the costs up. That got us thinking, should we sell it and buy a new vehicle? New vehicles seem to have more or less stayed stable, at least ones we are looking at.
The big concern is the cost and if this overall makes sense. We paid cash for this car and we would probably want a loan for a new car as we are saving up for a house. This is our only car and we were expecting to keep it until roughly sometime in 2024. The vehicles we are looking at are in the $30,000 range. Income is around $160,000. All-in expenses are around $7,000 per month.
What would you do? Please let me know if more information is needed.
The big concern is the cost and if this overall makes sense. We paid cash for this car and we would probably want a loan for a new car as we are saving up for a house. This is our only car and we were expecting to keep it until roughly sometime in 2024. The vehicles we are looking at are in the $30,000 range. Income is around $160,000. All-in expenses are around $7,000 per month.
What would you do? Please let me know if more information is needed.
Re: Sell or Hold Used Car and Buy New?
If you need a new car, buy one. If you do not need one, you have better places for your money.
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Re: Sell or Hold Used Car and Buy New?
The only vehicle I regretted selling was my 08 Civic. There was nothing wrong with it and the maintenance was up to date. Thanks for reminding me.
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Re: Sell or Hold Used Car and Buy New?
If you have something specific in mind to buy new, I would advise doing it now. Auto makers are finding that they can't get all the electronics and plastics they need and some manufacturers are starting to shut down assembly lines due to lack of these parts. There's good inventory at dealers now but that's not going to continue.
Bogle: Smart Beta is stupid
Re: Sell or Hold Used Car and Buy New?
A good, well maintained Honda/Toyota that you know the history on will easily last another five years, which would cost you way more than $2500. No way I'd sell it.
Re: Sell or Hold Used Car and Buy New?
I'm going to say my standard buy a Prius Prime schpeal. If you live in a region, or are willing to buy from one (west coast or NE) that is currently offering $5k Toyota rebate/cash on a Prime, buy one. Aim for a $3k dealer discount. You also get $4502 Federal Tax Credit and potentially more state/local/utility rebates.
You will immediately own a vehicle that is worth MORE than you paid for it. It gets amazing mpg, very reliable, great standard safety features and tech, and 2yr/25k free service.
Review the recent posts https://priuschat.com/threads/prius-pri ... 3/page-227 for prices paid and where.
Apparently the Honda Clarity is similar for deals/offers, but we prefer the Prius; but either way if you need a new, reliable and economical vehicle, you actually cannot go wrong by purchasing one.
You will immediately own a vehicle that is worth MORE than you paid for it. It gets amazing mpg, very reliable, great standard safety features and tech, and 2yr/25k free service.
Review the recent posts https://priuschat.com/threads/prius-pri ... 3/page-227 for prices paid and where.
Apparently the Honda Clarity is similar for deals/offers, but we prefer the Prius; but either way if you need a new, reliable and economical vehicle, you actually cannot go wrong by purchasing one.
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Re: Sell or Hold Used Car and Buy New?
You do realize that depreciation follows an exponential decay trajectory? The last ten years of life, my 23 year old Civic depreciated probably less than a $500 compared to the first 13 where it depreciated more than 95% of it's value. So essentially you are eating the higher depreciation years and passing it onto someone else to enjoy the lower depreciation years. Losing only $2500 in five years is pretty good, a testament to buying a Honda, but you will lose less and less in depreciation the longer you keep it compared to what you will lose in depreciation by buying a newer vehicle.
Financially worth it... no. Do you need a new car... only you can answer that question.
Re: Sell or Hold Used Car and Buy New?
I do, but it wouldn't be the end of the world to wait a year or more to dive in and buy a new car. I would hope that down the line the issues would be fixed. I hope.Jack FFR1846 wrote: ↑Tue Apr 20, 2021 4:31 pm If you have something specific in mind to buy new, I would advise doing it now. Auto makers are finding that they can't get all the electronics and plastics they need and some manufacturers are starting to shut down assembly lines due to lack of these parts. There's good inventory at dealers now but that's not going to continue.
Definitely a consideration. The insurance rates on it are also dirt cheap. It is also freeing not caring if it gets dented in the parking lot.
I do, but having driven it around 80,000 miles and the car being several years older would have led me to believe it would have lost more value than that. I believe at least part of it is the pandemic, but still. I know the person who leased it ate the big amount of the depreciation. This new car is definitely not a need and I had originally planned to keep it for at least another three years if at all possible.lthenderson wrote: ↑Tue Apr 20, 2021 5:31 pmYou do realize that depreciation follows an exponential decay trajectory? The last ten years of life, my 23 year old Civic depreciated probably less than a $500 compared to the first 13 where it depreciated more than 95% of it's value. So essentially you are eating the higher depreciation years and passing it onto someone else to enjoy the lower depreciation years. Losing only $2500 in five years is pretty good, a testament to buying a Honda, but you will lose less and less in depreciation the longer you keep it compared to what you will lose in depreciation by buying a newer vehicle.
Financially worth it... no. Do you need a new car... only you can answer that question.
Seems like the majority believe it is best to keep the car (or get a Prius Prime).
Re: Sell or Hold Used Car and Buy New?
If you have a reason to upgrade and you already have a vehicle picked out that you have confirmed inventory is available, sell. If you are just bored and keeping up with the Jones', keep.
Take your car to Carmax and they will give you a free offer that is good for 7 days.
Take your car to Carmax and they will give you a free offer that is good for 7 days.
Re: Sell or Hold Used Car and Buy New?
Do not sell your car before you buy a new one . the demand is through the roof and dealers are asking a lot of money .BeneIRA wrote: ↑Tue Apr 20, 2021 4:27 pm My spouse and I have an eight year old Civic with around 115,000 miles that we purchased used about five years ago. It was purchased with around 30,000 miles on it. It is generally in good condition as we have kept it up at a local mechanic. I was looking at what we would get if we sold the car and it looks like, on cursory glance, we would get about $2,500 less than what we paid for it, in all likelihood due to Covid driving the costs up. That got us thinking, should we sell it and buy a new vehicle? New vehicles seem to have more or less stayed stable, at least ones we are looking at.
The big concern is the cost and if this overall makes sense. We paid cash for this car and we would probably want a loan for a new car as we are saving up for a house. This is our only car and we were expecting to keep it until roughly sometime in 2024. The vehicles we are looking at are in the $30,000 range. Income is around $160,000. All-in expenses are around $7,000 per month.
What would you do? Please let me know if more information is needed.
Thanks!
Re: Sell or Hold Used Car and Buy New?
To me upgrading to new car with more of the advanced safety features would be an easy choice since it looks like you can easily afford it.
My situation is a bit different since I am retired and I kind of wanted a larger car for things like camping and road trips since I will not be able to travel internationally anytime soon.
Just today I replaced a three year old Corolla which is a good car and has pretty good advanced safety features. I replaced it with a new Subaru Forester that is a higher trim level with even more safety features. With the crazy used car market I even got an offer to sell my Corolla to CarMax for more than I paid for it(excluding tax and license) when it was new. There taxes make the details a lot more complicated but I basically got to drive the Corolla for three years for very little other than the operating costs.
I was still able to get an OK price for the Forester for just a bit over invoice(not MSRP). In normal times I could have done better than that but I also took a 0% financing offer even though I could have paid cash so overall it was a decent enough deal. I have heard that some new cars that are in short supply are selling for more than MSRP if you can find them.
There are lots and lots of posts and websites about car safety and advanced safety features that you can research but one thing that surprised me when I was planning to replaced the Corolla was that I called my insurance company to ask how much it would cost to insure the Forester.
Much to my surprise it will cost significantly less to insure the Forester than the Corolla, even though the Forester is worth about twice what the Corolla is worth.
I will not know the exact figures until I call the insurance company back with all the details tomorrow. The Forester is a little bit heavier than the Corolla but not by a lot since it is considered a compact SUV. I would assume that it is the advanced safety features that make it cost the insurance company less in claims and lawsuits.
Re: Sell or Hold Used Car and Buy New?
I lean toward keeping the Civic. It's paid for, in good shape, not that old, and you know what you have. If expensive repairs start coming in fast and furious, you can always call an audible.
I'll add that I'm not real big on worrying about demand/pricing fluctuations in the car market. I view making big purchasing decisions like this as something that should be done at my own pace. When I'm ready, I'll sell/buy.
My target/goal might be to keep the car another 5 years, taking it to 13 years old with 200K miles (you're averaging about 17K miles/year). In the meantime, keep socking away money for either a house or a new car or both (or something else entirely).
I'll add that I'm not real big on worrying about demand/pricing fluctuations in the car market. I view making big purchasing decisions like this as something that should be done at my own pace. When I'm ready, I'll sell/buy.
My target/goal might be to keep the car another 5 years, taking it to 13 years old with 200K miles (you're averaging about 17K miles/year). In the meantime, keep socking away money for either a house or a new car or both (or something else entirely).
Re: Sell or Hold Used Car and Buy New?
Since you drive a good amount and it's your only car, how inconvenient would it be to have it in the shop for a day or two getting repaired? Your chances of experiencing that are going to be higher over the next 5 years than they were over the last 5.
Just something to think about. It's still a Civic though, which will probably be very reliable.
Just something to think about. It's still a Civic though, which will probably be very reliable.
Re: Sell or Hold Used Car and Buy New?
I keep hearing safety features repeated over and over about new cars. Is there quantifiable and objective data they they do something? i.e. which specific features do something. "Modern cars are safer" vs "ABS, airbags, and crumple zones each make a car 33% more safe based on 5 years of accidents." A brand new 2022 safety feature lacks the years of data to make a claim about safety improvement.Watty wrote: ↑Tue Apr 20, 2021 5:54 pm To me upgrading to new car with more of the advanced safety features...
Just today I replaced a three year old Corolla which is a good car and has pretty good advanced safety features. I replaced it with a new Subaru Forester that is a higher trim level with even more safety features. ...
There are lots and lots of posts and websites about car safety and advanced safety features...
I would assume that it is the advanced safety features that make it cost the insurance company less in claims and lawsuits.
AFAIK, subaru outback and forester have always been cheap to insure:
https://wallethub.com/edu/ci/cheapest-c ... sure/65580
https://www.nerdwallet.com/blog/insuran ... nce-rates/
Re: Sell or Hold Used Car and Buy New?
Here you go.
https://injuryfacts.nsc.org/motor-vehic ... e-systems/
Of course different manufactures may have better or worse systems.
Systems are also improving over time and in addition to incremental improvements there are also new generations of advanced safety systems and some current systems are much better than ones that were on the road five years ago.
Re: Sell or Hold Used Car and Buy New?
Taking out a car loan for a new car and saving for are home down payment are competing priorities.
I would keep driving the Civic. Best to have some saved money for the next car purchase.
I would keep driving the Civic. Best to have some saved money for the next car purchase.
Re: Sell or Hold Used Car and Buy New?
So it's just these five things? There are way more than five advanced safety features: https://mycardoeswhat.org/safety-features/Watty wrote: ↑Wed Apr 21, 2021 12:38 pmHere you go.
https://injuryfacts.nsc.org/motor-vehic ... e-systems/
Of course different manufactures may have better or worse systems.
Systems are also improving over time and in addition to incremental improvements there are also new generations of advanced safety systems and some current systems are much better than ones that were on the road five years ago.
I guess what I am asking is if these five features are a checkbox i.e. forward collision prevention provides the same benefit regardless of manufacturer. You seem to imply that say Ford could actually have a worse forward collision prevention system vs say Honda.
https://injuryfacts.nsc.org/motor-vehic ... a-details/
Group 1 and Group 2 seem to provide the majority of safety based on data available in 2021. It seems a 2016/2017 used vehicle that has G1/G2 would be as safe as a brand new 2021 with G1/G2.
Re: Sell or Hold Used Car and Buy New?
Getting rid of an 8 year old car for safety reasons is getting a little carried away imo.
Re: Sell or Hold Used Car and Buy New?
Agreed on the over-insistence about "safety features". I agree that on average newer cars are safer than older ones, but it depends on the specific vehicle. Stability control is one of the features that has had a significant impact in injuries/accidents. Toyota did not make it standard until the end of 2009. My 1998 European luxury sedan has stability control and many of the features that weren't standard on the Toyota Corolla until 11 years later.ballons wrote: ↑Wed Apr 21, 2021 10:51 amI keep hearing safety features repeated over and over about new cars. Is there quantifiable and objective data they they do something? i.e. which specific features do something. "Modern cars are safer" vs "ABS, airbags, and crumple zones each make a car 33% more safe based on 5 years of accidents." A brand new 2022 safety feature lacks the years of data to make a claim about safety improvement.Watty wrote: ↑Tue Apr 20, 2021 5:54 pm To me upgrading to new car with more of the advanced safety features...
Just today I replaced a three year old Corolla which is a good car and has pretty good advanced safety features. I replaced it with a new Subaru Forester that is a higher trim level with even more safety features. ...
There are lots and lots of posts and websites about car safety and advanced safety features...
I would assume that it is the advanced safety features that make it cost the insurance company less in claims and lawsuits.
AFAIK, subaru outback and forester have always been cheap to insure:
https://wallethub.com/edu/ci/cheapest-c ... sure/65580
https://www.nerdwallet.com/blog/insuran ... nce-rates/
Now if your car is a 23 year old corolla, yeah it probably won't be very safe, but a 23 year old European luxury sedan will fare much better, although still not on the same level as most modern cars.
Personally I'd rather be in 2011 Mercedes S class in an accident than a 2021 Toyota Corolla even if the Corolla has blind spot monitoring or lane keep assist and the older Mercedes did not.
Re: Sell or Hold Used Car and Buy New?
It's not about safety, at least primarily. It's market timing. If what I understand is that OP can sell the used car for more than it's usually worth, but still buy a new car for market price, the gap between new and used is smaller than usual. Folks that bought electric vehicles are also in a similar situation, pretty much driving free cars for a couple of years.
What's different about cars is that they wear out and prices eventually depreciate. With the market the conventional wisdom is that it goes up eventually, at least we all hope it does.
OP, how much are you looking to fetch? (I've been considering a 2013 Civic, but they're holding good residual value, so not a great value purchase for me) You should be able to get enough for a one pay lease (or leave cash in bank and cover all expenses thru 2024), and you probably still have some left over for you next vehicle.
A new car is going to cost more, but figure out the amount and decide if you want to pay it. If the average monthly cost is $300 vs $100, it might be an easier decision to save some cash, but if it's more like $225 vs $150, you might decide it's worth spending more for newer or better.
https://forum.leasehackr.com/t/april-21 ... t/133520/4
swapping honda odyssey to a new one
viewtopic.php?p=5955037#p5955037
Re: Sell or Hold Used Car and Buy New?
My comment was in response to the discussion/debate above about the improved safety of newer cars.inbox788 wrote: ↑Wed Apr 21, 2021 5:40 pmIt's not about safety, at least primarily. It's market timing. If what I understand is that OP can sell the used car for more than it's usually worth, but still buy a new car for market price, the gap between new and used is smaller than usual. Folks that bought electric vehicles are also in a similar situation, pretty much driving free cars for a couple of years.
What's different about cars is that they wear out and prices eventually depreciate. With the market the conventional wisdom is that it goes up eventually, at least we all hope it does.
OP, how much are you looking to fetch? (I've been considering a 2013 Civic, but they're holding good residual value, so not a great value purchase for me) You should be able to get enough for a one pay lease (or leave cash in bank and cover all expenses thru 2024), and you probably still have some left over for you next vehicle.
A new car is going to cost more, but figure out the amount and decide if you want to pay it. If the average monthly cost is $300 vs $100, it might be an easier decision to save some cash, but if it's more like $225 vs $150, you might decide it's worth spending more for newer or better.
https://forum.leasehackr.com/t/april-21 ... t/133520/4
swapping honda odyssey to a new one
viewtopic.php?p=5955037#p5955037
With regards to market timing and/or car churning...we should also consider all of the time spent on it (researching, shopping, buying and selling). Some people like it and treat it as a hobby. Others don't and see it as a black hole time suck.
Re: Sell or Hold Used Car and Buy New?
I like the Prius Prime info above but also consider a lease if you want something new and only care about the monthly cost.
I leased a Kia Forte gt-line in November (turned in another Kia lease that cost more). $220 a month with $2700 due at signing. Insurance is $100 a month. Has all the safety features. Check out leasehkr site for ideas.
Good luck.
I leased a Kia Forte gt-line in November (turned in another Kia lease that cost more). $220 a month with $2700 due at signing. Insurance is $100 a month. Has all the safety features. Check out leasehkr site for ideas.
Good luck.
Re: Sell or Hold Used Car and Buy New?
Safety features aren't very high on my list. Inbox probably got to the heart of the matter that I am probably market timing. I don't think my car is worth what people are willing to pay for it (on sites I have seen, at least) by probably $2,000. I know Civics keep their value, but selling this car for somewhere in the $8,000 range seems a bit high when years ago one with 30,000 miles cost a bit over $10,000. It's older and has over three times the mileage and yet it only lost a couple thousand dollars of value? Leasing doesn't interest me. I would rather buy and keep at least ten years. I leased once and I regretted it pretty quickly afterwards.
Re: Sell or Hold Used Car and Buy New?
I'll keep it for another 3 years and buy in 2024. I'll let the down payment/monthly payment money grow for these 3 years. Honda/Toyota tend to hold value well.BeneIRA wrote: ↑Tue Apr 20, 2021 4:27 pm My spouse and I have an eight year old Civic with around 115,000 miles that we purchased used about five years ago. It was purchased with around 30,000 miles on it. It is generally in good condition as we have kept it up at a local mechanic. I was looking at what we would get if we sold the car and it looks like, on cursory glance, we would get about $2,500 less than what we paid for it, in all likelihood due to Covid driving the costs up. That got us thinking, should we sell it and buy a new vehicle? New vehicles seem to have more or less stayed stable, at least ones we are looking at.
The big concern is the cost and if this overall makes sense. We paid cash for this car and we would probably want a loan for a new car as we are saving up for a house. This is our only car and we were expecting to keep it until roughly sometime in 2024. The vehicles we are looking at are in the $30,000 range. Income is around $160,000. All-in expenses are around $7,000 per month.
What would you do? Please let me know if more information is needed.
"Know what you own, and know why you own it." — Peter Lynch
Re: Sell or Hold Used Car and Buy New?
Keep it, that thing is gonna last a while. New cars are always nice, but you could easily invest that money on other things. Both my cars are 10+ years old and I've saved a ridiculous amount of money not having a car payment all those years.