Why by a newer used car?

So I have been looking at newer used cars for my wife (and not as recently with a friend) and after looking, I am wondering why anyone would buy a newer used car.

I was looking at Jeep JKs for example and I most of what I saw where $4-$8k cheaper then a new one but had 30-100k miles on them. Why would I buy a car that was previously owned by some who may or may not have maintained it properly and already has a number of miles on it (effective shortening the time that I would own it)? I saw the same thing with a number of cars like the Fit. Also it seems the financing options aren't as good on a used car as a new one. I don't see the value at all.

CPO cars frequently offer a warranty that exceeds what they had new. Otherwise I don't see the point in a newer used car.

It's because in a lot of cases the value isn't there.

Jeeps and Fits are bad cars to buy as newer used cars, because they hold onto their value very well.

It becomes a value deal when the car depreciates a huge chunk of its value in 5 years, like BMWs, etc.

I asked a dealer this and they told me its honestly because some people literally can not get financing for the difference. They may get approved for 12k @ 8.0% for a used fit but they will not get approved for 16k for a new one. For many people they will take the trade off of $20/mo savings on a used car vs new.

CPO + a massive depreciation curve makes it pretty compelling in some cases. The BMW example Brett gave is just about perfect. You save ~10k off new car, but still get a fat warranty and assurance it is like new.

In other cases, like the Fit, it makes far less sense. Actually, Fits don't make much sense to me at all, since they're priced so close to a Civic. But that's just me.

Because a new Audi S4 optioned the way I want is over $60k, whereas the '11 Audi S4 I recently bought was only a little more than 50% of that. Car still has a bit of warranty left on it too and has 37k miles on it.

I'm more than happy to save almost $30k in order to drive a car with 37k miles on it.

I also know people who "always buy a three year old car because that's the best value" without actually running the numbers.
Toyotas are always reliable. Ford makes junk. Three year old cars are the best. It's easier to not think for a lot of people.

When we bought our Outback I had the same question. We paid under $24k before taxes, and used ones with 30k miles were asking $22k. Doesn't make any sense.

docwyte wrote: Because a new Audi S4 optioned the way I want is over $60k, whereas the '11 Audi S4 I recently bought was only a little more than 50% of that. Car still has a bit of warranty left on it too and has 37k miles on it. I'm more than happy to save almost $30k in order to drive a car with 37k miles on it.

That makes sense.

I haven't been looking at higher priced cars (BMW, Jag, Audi, etc) so I can see why buying used there makes sense but it seems on more normal starting price cars that it doesn't make sense.

mazdeuce wrote: I also know people who "always buy a three year old car because that's the best value" without actually running the numbers. Toyotas are always reliable. Ford makes junk. Three year old cars are the best. It's easier to not think for a lot of people.

If you are going to oversimplify things like that, the "3 year old" thing isn't a bad rule to go by.

I'm in the "it depends" club. Some cars depreciate enough to make it worthwhile, some don't. When I worked at Ford, I looked seriously at used Freestyles (this was in early 2008). But with my employee discount, it made more sense to buy a new Taurus X. Which we still have, 6 years later. But without the discount, it might have been a different story.

I read somewhere that 2-year is the magic number. At that point the previous owner took something like 50% or 60% of the depreciation but only used up a few percent of the cars life. Now, that only applies if you plan on keeping the car till it's dead.

docwyte wrote: Because a new Audi S4 optioned the way I want is over $60k, whereas the '11 Audi S4 I recently bought was only a little more than 50% of that. Car still has a bit of warranty left on it too and has 37k miles on it. I'm more than happy to save almost $30k in order to drive a car with 37k miles on it.

Exactly. Plus, the '11 S4 is one hell of a car.
You have to find the super nice cars that lost 40-50% of their value after 4 years and 60,000 miles.
Maybe its just my area, where I can get a 65,000 mile Escallade that is 4 years old for about $35,000. They were about $75,000 new.
OP is correct, if you are only going to save $3-4k and almost be out of warranty its best to just buy the new car and be done with it.

PeterAK wrote: When we bought our Outback I had the same question. We paid under $24k before taxes, and used ones with 30k miles were asking $22k. Doesn't make any sense.

I remember back in the weird old post-C4C economageddon days of 2008-2009, I saw several examples of used cars priced above identical new counterparts. Some even at the same dealership!

I'm in the "it depends" camp.

Currently, you can get a stripped 2014 Accent hatchback for $10k in Canada.

A running, non-rusty car up here that doesn't require emergency repairs is worth $3k with 140K+ miles.

Makes sense to by the Accent new. I've been trying to justify buying a new truck, but trucks are trucks, the new ones don't do anything better EXCEPT fuel mileage. But $40k for a truck vs $2k for my current one buys a lot of fuel.

93EXCivic wrote: So I have been looking at newer used cars for my wife (and not as recently with a friend) and after looking, I am wondering why anyone would buy a newer used car. I was looking at Jeep JKs for example and I most of what I saw where $4-$8k cheaper then a new one but had 30-100k miles on them. Why would I buy a car that was previously owned by some who may or may not have maintained it properly and already has a number of miles on it (effective shortening the time that I would own it)? I saw the same thing with a number of cars like the Fit. Also it seems the financing options aren't as good on a used car as a new one. I don't see the value at all.

Clearly its because she needs a MINI! In particular a red one...say an '06 S.

Some are good and some are bad. Right now, Mustangs are bad. I can go and get a new one for cheaper than most 2011+ used ones are selling for. Focus/Fiesta ST is the same story. Mark VI GTI are a similar story.

Europeans are usually a different story as mentioned. we got a 2008 BMW convertible with a 5 year/60K warranty and only 16.7K miles for 25.6k recently.

Smart shopping and knowing what the new cars cost before going used car shopping just makes sense.

When i was shopping new used Honda fits seem to depreciate about 15$ per year. But on like chevy cruzes and ford focuses (foci) you could save some coin and get more warranty if certified

In all seriousness, unlike my answer above, the more expensive the car, the more depreciation it is likely to experience. Not always true however, but if you wanted a luxury car (BMW / Mercedes) for instance, it would show a significant decline compared to say a CRV. Percentage wise they may be similar, but actual dollars not so much.

I just bought a newer used car. I wanted a Honda CR-Z. New was around $22k. Used cars were between $12k and $20k. I was on the fence until I managed to find a 2013 CPO with 16k for $15.5k.

I see it as saving about $6k for negligible wear. The worst of it is the "air freshener" the dealer added that took a week to go away, and getting only one key. Everything looks new otherwise.

People buy used cars because 99% of the time its cheaper. The exemption are newer models or cars in higher demand. Example the frisbee twins were selling used more than a new one, because no one could get there hands on a new one, and the new ones out there had 3-4K "dealer fees"

If your looking at stuff thats like a year or two old, yah alot of times new is better because of particular sales, rebates, or special financing options.

I have a friend who loves mercedes, specifically S class 500 and up. He buys them about 3 years old, and keeps them until they are practically worthless. He just got a new one to replace his 264K S500, its a few years old has about 60K on it, but he paid a fraction of the 100K MSRP. He gets to stay in a relatively new mercedes flagships without suffering the huge first couple year's depreciation.

DrBoost wrote: I read somewhere that 2-year is the magic number. At that point the previous owner took something like 50% or 60% of the depreciation but only used up a few percent of the cars life. Now, that only applies if you plan on keeping the car till it's dead.

I doubt it.

We paid $19,000 OTD for my wife's 2010 Mazda 3 in June of 2010. We sold it last month with 70k miles for $11k.

It's much more car/condition based than any timeline.

Brett_Murphy wrote: Jeeps and Fits are bad cars to buy as newer used cars, because they hold onto their value very well. It becomes a value deal when the car depreciates a huge chunk of its value in 5 years, like BMWs, etc.

and big trucks. my 13.5k avalanche was 46k not that long ago.

My last 3 purchases for vehicles for SWMBO were less than 2 years old with 20k or less miles. All were considerably less than similarly optioned new units, 30-50%, one was a CPO with double what a new warranty would have been. You do need to do your homework to confirm it makes sense. The bride typically finds something she loves and hangs onto it until it is old and tired so we get our money's worth out of them. She is also pretty good at choosing vehicles with a poor resale value so that helps. The biggest hassle we see over buying new is you have to widen your search area if you have very specific option and color preferences otherwise I don't see the need to buy brand new. The other advantages are insurance, sales tax and excise tax is substantially less.

Depends on what you find. The wife and I bought an 07 Accord LX for about 13k. I know.. Wow THAT much? Ex models were about 16k to 18k. But the car we bought had less than 13k miles... I still feel like I paid too much. But my Wife is happy with the car.