Cheapest Way To Buy A Used Car
Remember, your goal is to get a reliable used car not a pimp-mobile. So, decide from the outset to rid yourself of trivial preferences that inflate the perceived value of cars like paint color, seating material, power windows, and what-have-you.
cheapest way to buy a used car
A reliable used car is not like a regular car. It has been meticulously taken care of and that fact has to be teased out by using very specific and subtle keywords associated with a well-maintained vehicle.
One more point to drive home the costs associated with owning a car later on in its lifespan: Think about the total cost of ownership for the unlucky person who owns a car at the very end of its life (not shown on the graph). Not only were they probably dealing with fairly high repair costs, but then, when their car finally required a repair that cost more than the worth of the car, they had to junk it. So, they also took a serious hit in depreciation that year (because its value instantly dropped from maybe around $2,000 to $0). This is something we extra want to avoid. The owner would have done a lot better financially by selling that old faithful car and buying a relatively new used car instead. (Ahem, like I would have done had I known that driving a 2003 Chrysler Town & Country with over 200,000 miles on it could have a transmission go out at any moment.)
To make each graph, I searched all used vehicles of a specific make, model, year, and trim on cars.com and then plotted every single one of them according to its miles and price. You can click on the images below to make them bigger.
A physician needs to own a new or lightly used car as you suggested. The cost of one day missed work due to car trouble is too high. If you trade cars every 3 years also the maintenance cost and the maintenance risk is $0 due to the warranty and not needing to replace the tires before 50k miles.
I would submit that perhaps it was not so linear until the last few years. Prior to COVID, my recollection is depreciation was much more frontloaded, but now that cars are appreciating (or at least minimally depreciating) things are a little different. The question then becomes, is this a new normal, or is this a short term anomaly that no one should use to make a life long decision about the cheapest way to buy a car?
awesome analysis dude! I wish I had read this before I bought my 2 used cars!!! My analysis of reading other material on buying the most financially optimized used car would be to buy a 3 year old used car (because depreciation is exponentially worse in the first 3 years of car ownership) with the least amount of miles (to minimize mileage depreciation), and drive it into the ground. The brand should be Toyota or Honda because those brands tend to maximize fuel efficiency, minimize repair costs, and tend to last forever. How do you think my conclusions jive with your analysis?
I think this is a pretty interesting analysis, challenging the old advice from frugal parents that we should drive a used car into the ground to get the best value. I appreciate the insight into that.
After reading the article, I went back to see what the author did for a living. I was sure he must be an engineer or CPA. I had always assumed the correct answer was buy used and keep it forever. Thanks for writing it.
At CARFAX, we collect events from the lives of millions of used cars from 20 European countries, as well as the USA and Canada. We can then create a vehicle history for every car in our database and make it available to you.The information helps you to check sales data, avoid expensive follow-up costs and negotiate a fair purchase price.
"We're actually living in a golden age of used cars," says Reed. "I mean, the reliability of used cars is remarkable these days." Reed says there is an endless river of cars coming off three-year leases that are in very good shape. And even cars that are older than that, he says, are definitely worth considering. "You know, people are buying good used cars at a hundred-thousand miles and driving them for another hundred-thousand miles," says Reed. "So I'm a big fan of buying a used car as a way to save money."
Even if you buy a slightly newer used car than the Raekers', the couple raises a great point. What else could you be spending that car payment money on? And if you can cut in half what you might otherwise spend, that's a lot of extra money for your retirement account, your kids' college fund or whatever else you'd rather be doing with that money.
Furthermore, if you're looking at a used Renault Zoe or an early Nissan Leaf model, it might be subject to a battery lease agreement, which was originally offered to lower the initial purchase price of the car.
Our latest research* into used electric cars, based on more than a thousand electric car owners, has shown there is a very slight but noticeable decline in usable battery range for older electric cars:
Regardless of the sticker price, purchasing a car is a costly endeavor. Average vehicle costs continue to grow across the country, and several states have increasingly expensive costs, such as sales tax and additional vehicle fees. Regardless of how good of a negotiator you think you are, all states can differ on the price, availability, and taxes involved in a vehicle purchase. There are details below for each, but in general, the cheapest states to buy used cars are:
The CoPilot car shopping app is the smartest way to buy a car. Get a curated list of the best cars for sale in your area, as well as notifications if a similar vehicle is listed nearby at a lower price. CoPilot is the smartest way to shop for used cars.
Florida is the second-best overall place to purchase a used vehicle in the United States. Although registration fees and sales tax are slightly more than in other states, the overall savings are higher. Because of their large population, they can provide many alternatives.
When considering geographical advantages, consider that roughly 20% of Floridians are above 65. This will lead to more people selling seldom used vehicles in good condition. We know people typically drive less as they age, and having one of the older populations in the country leads to better options for used buyers.
On another side of geographical benefits for Florida, most of the vehicles sold have seen little snow or none. Because the frames and underbody components are rarely exposed to salt used to melt snow, they are frequently in great shape.
It depends on your definition of worst, but generally speaking, the more rural states have fewer options and higher shipping costs, and states with significant cities typically have higher taxes. According to iSeeCars.com, here are ten states that pay more for used cars:
When you shop for a new or used car, CoPilot helps you know more. We search every car at every dealer so you don't have to, we give you data and insights you won't find anywhere else, and we rank every car so it's easy to find the best car at the best price.
Between sources drying up and the temporary shutdowns last year, KAR Global sold 3,062,000 used vehicles in 2020, down 19% from 2019, the company said in its annual report. In the first quarter of 2021, KAR reported on May 5 its ADESA auto auctions sold 753,000 vehicles, down 13% from a year ago.
The average monthly payment for each city was calculated using the average interest rate of a prime borrower (5.38 percent) and a 60-month term. Income statistics were retrieved from the U.S. Department of Justice. And average used car prices by city are from a study of sales conducted in 2021 by iSeeCars. While the exact amount you pay will be up to negotiation, you will at least have an edge when it comes to what to expect on the car lot.
Columbus and Cleveland are almost neck-and-neck when it comes to average car prices. Since there has been a slight shortage on used car lots, the difference in price is up to negotiation at the dealership. Plus, Ohio is the least expensive state to own a car.
When you buy from a car dealership, the buying process is mostly on the lot. Buying a used rental is much different. Most of the buying process is done online, and you may only need to go to the rental office for test drives or paperwork.
Above Average Mileage. Used rentals tend to have more mileage than other cars of the same age. A two-year-old former rental typically will have about 51,000 miles on it, compared to the average used car at the same age, or 24,000 miles.
Another potential reason to consider an out-of-state car purchase revolves around the fact that some vehicles are popular in one market while they are less popular in another. This means you might be able to buy a model with four-wheel drive (4WD) in the Sunbelt cheaper than you could buy it in the Rockies. And this potential opportunity, unlike the first, applies equally to used vehicles. You might discover with an Internet search that a particular five-year-old sports car you crave is much cheaper in another state than it is in your local area. You might also believe that buying a car out of state is a way to steer around state and local taxes, which could potentially save you some money, but as you'll see, that is unlikely.
Scams are also a complication of buying a car long-distance. Fraud involving vehicle sales is a significant and growing problem. If a classified listing for a used car appears to offer the vehicle at an unbelievable bargain price, you are well-advised to believe the listing might be the front for a scam. You send money with the expectation that the car will be delivered to you, and you never hear from the seller/scam artist again.
UK is not the cheapest market to buy a vehicle in. What you spend in pounds, you also spend in Euros on the other side of the channel. Meaning you get more bang for buck in the Netherlands or Germany. Lastly, most of the cars on sale in the UK will naturally be a left hand drive, while the rest of Europe is right hand drive only. This can be annoying and even dangerous some times. 041b061a72