new vs. used car?

[Robertslowpoke]

good morning! I got great advice here on taking care of my 2008 Cadillac DTS.

I hope to drive it longer, has 71,000 miles.

simple question:

next car, new or used?

for used, I would look at a 3 year old, certified pre owned Caddy from a dealer. keep 3 years, trade in, and get another. would like any and all advice. I would hope to avoid large depreciation, yet still get rid of it a 6 years old.

THANK YOU SO MUCH! always great info here.
bob

 

[CT8]

A used car that has been maintained and not abused can be quite the value. A new car kept for most of its life can also be quite the value.

 

[Quattro Pete]

If you're only planning to keep it 3 years, then I would say buy used.

If you're planning to keep it for 10+ years, then I would say new.

 

[supton]

This is as a spare driver, or a daily driver for someone in the family, or ___? Is this to get prepared for the eventual replacement of this current Caddy?

If you're buying domestic, rule of thumb is to buy as you plan, used, with good records of upkeep. Someone else paid for the initial depreciation. Plus if there are any trouble spots they are likely found.

 

[Robertslowpoke]

thank you all! Supton: this would replace my 2008 DTS, and would be my daily driver to work. I drive 9000 miles per year. I would insist on certified pre owned from a dealer, not a used car dealer. thank you bob

 

[901Memphis]

Lease

 

[Virtus_Probi]

Originally Posted By: Robertslowpoke
thank you all! Supton: this would replace my 2008 DTS, and would be my daily driver to work. I drive 9000 miles per year. I would insist on certified pre owned from a dealer, not a used car dealer. thank you bob

Sounds like you might be a good candidate for a lease with your low mileage and the thought that you will be picking up another car in 3 years.
I'd say an outright purchase of a new car you plan to replace in 3 years probably is not a good idea.
I aim to keep my cars for at least 8 years and rack up about 20kmiles a year, feel like buying new makes sense for me.

 

[supton]

Originally Posted By: Virtus_Probi
Originally Posted By: Robertslowpoke
thank you all! Supton: this would replace my 2008 DTS, and would be my daily driver to work. I drive 9000 miles per year. I would insist on certified pre owned from a dealer, not a used car dealer. thank you bob

Sounds like you might be a good candidate for a lease with your low mileage and the thought that you will be picking up another car in 3 years.
I'd say an outright purchase of a new car you plan to replace in 3 years probably is not a good idea.
I aim to keep my cars for at least 8 years and rack up about 20kmiles a year, feel like buying new makes sense for me.


At 9k/year a lease might work--TCO and/or cost per mile might be close enough. Worth running some numbers.

At 20k/year I can agree: buy new, get the options you want, and any cost bump is divided into a small yearly cost. Depending upon residual value it may or may not be a good deal: some cars lose value like rocks, others hold it. After 8 years and >150k though much of the value is gone, so the end result tends to the same value--different story if a shorter timeframe is used.

 

[Rolla07]

Originally Posted By: 901Memphis
Lease


+1

Crunch the numbers, might let you get in a new one for as much as buying a used one and selling it again...

Personally, I wouldn't buy a used luxury car...

 

[RooflessVW]

If you KNOW you're going to buy a new car every 3 years, the a lease is the only way to go. It'll cost about the same and you'll always be in the latest and greatest.

 

[Pop_Rivit]

A 2008 DTS should have a lot of years left in it. However, a luxury car that is around 3 years old can be an extremely good value, especially and off-lease vehicle. Someone else has paid for the first 3 years of depreciation with nothing to show for it. For example, a 2013 CTS was around $40,000 when new, and is now around half that amount. We recently purchased a 2 year old vehicle for my wife, and I was surprised at what a reasonable bargain they were compared to new. There's really no reason to dump a perfectly good vehicle after just 3 years, even a 6 year old vehicle. It has a lot of miles left in it and you might as well take advantage of it.

Leasing (in my opinion) is financially stupid, and best left to those who don't know any better or feel the need to live beyond their means. Once the lease is up you've made payments for 3 or more years with nothing to show for it. It's good for automakers and dealerships, which is why they push leases so hard.

 

[69GTX]

I'd take your current car to about the 10 year point (2018-2020) and then move up to another nice used car with 20K-35K miles....say a 2013-2015 that will be largely depreciated by then. The Caddy's/Lincoln's and other luxo's depreciate pretty fast. Plan to pay cash. It shouldn't be over $10K. New car doesn't make sense unless you're going to 10 yrs or longer with it. And even then it's hard to swallow that first 3-4 year hit of depreciation. Best bang for the buck is typically ownership from 5 yrs old to 10/12 years old.

 

[RooflessVW]

Originally Posted By: Pop_Rivit
A 2008 DTS should have a lot of years left in it. However, a luxury car that is around 3 years old can be an extremely good value, especially and off-lease vehicle. Someone else has paid for the first 3 years of depreciation with nothing to show for it. For example, a 2013 CTS was around $40,000 when new, and is now around half that amount. We recently purchased a 2 year old vehicle for my wife, and I was surprised at what a reasonable bargain they were compared to new. There's really no reason to dump a perfectly good vehicle after just 3 years, even a 6 year old vehicle. It has a lot of miles left in it and you might as well take advantage of it.

Leasing (in my opinion) is financially stupid, and best left to those who don't know any better or feel the need to live beyond their means. Once the lease is up you've made payments for 3 or more years with nothing to show for it. It's good for automakers and dealerships, which is why they push leases so hard.


If you make payments for 3 years on a depreciating asset, what do you have to show for it?

Maybe some negative equity. Only buy a car if you plan to keep it long-term, period. Otherwise it is a losing proposition.

 

[BrocLuno]

Wow, you'all that live back east and think in these terms still surprise me. I buy a car or truck to go through at least one engine and maybe two... That's a couple hundred thousand miles at least.

Always used. Bought one new car in my life and it did not live through the payments before I sold it. Also one leased vehicle. Got out of that ASAP. The payments make me cringe every month. Takes all the fun out of the vehicle. Pay cash and drive away.

Fly out to LA (or Phoenix, etc.) and buy whatever you want. Zero rust. Dealer certified if need be ... Drive it home. Any make, any year, any model

 

[Wolf359]

Originally Posted By: Pop_Rivit
A 2008 DTS should have a lot of years left in it. However, a luxury car that is around 3 years old can be an extremely good value, especially and off-lease vehicle. Someone else has paid for the first 3 years of depreciation with nothing to show for it. For example, a 2013 CTS was around $40,000 when new, and is now around half that amount. We recently purchased a 2 year old vehicle for my wife, and I was surprised at what a reasonable bargain they were compared to new. There's really no reason to dump a perfectly good vehicle after just 3 years, even a 6 year old vehicle. It has a lot of miles left in it and you might as well take advantage of it.

Leasing (in my opinion) is financially stupid, and best left to those who don't know any better or feel the need to live beyond their means. Once the lease is up you've made payments for 3 or more years with nothing to show for it. It's good for automakers and dealerships, which is why they push leases so hard.


I don't think you really understand leasing. While your blanket statement used to be true, it's no longer true now and it depends on the deal the automaker is offering. Check out leasehackr.com for the latest lease deals. On some leases, the monthly payment is so low, that it's worth it over buying. Part of the reason is due to manufacturer incentives that you can apply to the lease payment. If they're offering a 5k rebate, you apply that to the monthly payment which can be 2-3 years. A 5k rebate on a purchase is a lower percentage discount. You just have to do the math on each deal instead of just saying that they're all bad. And if you're buying a luxury car and tying up 40-50k in the car, it may make sense to lease for $400-$500 a month instead, especially if the market returns an average of 8% a year although the market has been pretty weak the last couple of years.

But the math for leasing vs buying a used car is different. You can usually get an extended warranty with a used car which will cover at least 3 years. A used 3 year old luxury car is probably in the 20-30k range and will probably still be worth at least 10-15k in another 3 years if not more. So that's 10-15k depreciation over 3 years instead of 20k+ on a new one so it's still cheaper to buy used instead of buying/leasing new.

 

[Robertslowpoke]

great discussion! just what I was looking for. I found one web site claiming in the first 3 years, a car depreciates 47%, and 17% in the next 3.

OK, my plan was to BUY (cash) a 3 yr old, certified, LOW miles caddy from a dealer with warranty. DRIVE 3 years, trade in, BUY for cash, another 3 yr old one.
Broc Luno- I DO agree, in general, used cars are cheaper to own, long term

Wolf- 2 friends ONLY lease cars, never have to fix them, BUT they argue VIGOROUSLY over the down payment and the terms. I will check out lease hacker.

I respect the opinions of EVERYONE!

I live in Massachusetts, the rust here is incredible. getting a southern/western car may be smart! 3 people here did! bob

 

[supton]

Originally Posted By: BrocLuno
Wow, you'all that live back east and think in these terms still surprise me. I buy a car or truck to go through at least one engine and maybe two... That's a couple hundred thousand miles at least.

Always used. Bought one new car in my life and it did not live through the payments before I sold it. Also one leased vehicle. Got out of that ASAP. The payments make me cringe every month. Takes all the fun out of the vehicle. Pay cash and drive away.

Fly out to LA (or Phoenix, etc.) and buy whatever you want. Zero rust. Dealer certified if need be ... Drive it home. Any make, any year, any model

Doesn't matter how rust free it is--it'll rot away. Probably before it needs an engine. After 10 years and 200k of New England, many a vehicle is in dire need of a good overhaul--except everything is rusted together. Might as well defer most maintenance and then sell the heap. At that point it would make sense to fly south and keep repeating--but I wouldn't expect indefinite life out of any given example.

Couple that with today's ever increasing amount of electronics and emissions equipment. Not saying it's "impossible to work on the new stuff", just that, when you couple the increased issues with repairs with the nominal rust, wear and tear... it's a bit different up here.

 

[demarpaint]

Originally Posted By: Quattro Pete
If you're only planning to keep it 3 years, then I would say buy used.

If you're planning to keep it for 10+ years, then I would say new.



+1

 

[CKN]

Originally Posted By: Pop_Rivit
A 2008 DTS should have a lot of years left in it. However, a luxury car that is around 3 years old can be an extremely good value, especially and off-lease vehicle. Someone else has paid for the first 3 years of depreciation with nothing to show for it. For example, a 2013 CTS was around $40,000 when new, and is now around half that amount. We recently purchased a 2 year old vehicle for my wife, and I was surprised at what a reasonable bargain they were compared to new. There's really no reason to dump a perfectly good vehicle after just 3 years, even a 6 year old vehicle. It has a lot of miles left in it and you might as well take advantage of it.

Leasing (in my opinion) is financially stupid, and best left to those who don't know any better or feel the need to live beyond their means. Once the lease is up you've made payments for 3 or more years with nothing to show for it. It's good for automakers and dealerships, which is why they push leases so hard.



The OP is a great candidate for a lease. Anti leasing is a BITOGism. Congrats for bringing it up.

 

[dishdude]

A luxury car is one of the few segments where leasing and buying CPO used makes sense to me. There are typically huge incentives to lease, and since many buyers lease them there are a ton that hit the market at the 2-3 year mark. CPO typically gives you a bumper to bumper warranty for another few years. I'd explore both options, but if the goal is to trade out cars every 2-3 years and you don't drive a ton, leasing might be a better value.

OP's car has a ton of life left in it, but you only live once and if he wants to ride around in a new car and can afford one, I say go for it. You can't take it with you!