buying and selling used cars

[LivingAlmostLarge]

Do you think that buying say a 3 year old used car and then selling it after 3 more years is a bad idea? Are you still losing a lot of money buying and say selling used cars if you keep changing it like a person who changes a new car?

Would you buy a 9 year old used car and keep it for a 1-2 year and then sell it? Is it worth investing more in a used car and getting a new one?

Do most people who buy used cars buy 1-2 year old used and keep them or are they going for older used cars and dumping them after a couple of years? Do you save any money doing it that way? Just less out of pocket?

[97guns]

I'm looking to buy a cheap running 1-2 year old used car later this year, I see compact economy cars with less than 10k miles going for as little as 11-12k. I'm also seeing a lot of low mile cars with salvaged titles and I might consider one, doesnt take too much for the insurance company to total a vehicle especially an economy car that's cheap to begin with. Whatever i settle on i would be driving it into the ground and wouldn't be worried about reselling

[Nutria]

You can figure that out using Kelly Blue Book or Edmunds used car prices.

[disneysteve]

Do you think that buying say a 3 year old used car and then selling it after 3 more years is a bad idea?

Would you buy a 9 year old used car and keep it for a 1-2 year and then sell it?

Do most people who buy used cars buy 1-2 year old used and keep them or are they going for older used cars and dumping them after a couple of years?

I hate buying cars and have no desire to sell them myself, so I look for a good quality lightly used car and keep it for the duration. I bought my last car 1 year old and kept it for 14 years. My current car was unusual. It was 6 years old but super low mileage (26K). I don't usually buy that old. I've had it for going on 4 years and will probably have it for 5-6 more.

I used to have a friend who would buy old cars, keep them for 6-12 months, and resell them. He was a car guy and would clean them up while he had them. He usually sold them for the same or even more than he had paid. I don't have that skill set so I stick with the 2-3 year old ones and then drive them for 150,000 miles.

[QuarterMillionMan]

To me buying and/or selling a used/new car is a pain in the butt. Once I buy a car I intend to keep it until I can get the most use of it and hopefully sell it if it still has some life left in it later at some point, usually at a price no where near what I paid for it. In 2007 I bought my Dodge Dakota brand new for $13,999. This is the actual sales advertisement (5 at that price, they had 4 left when I got there).

[snafu]

I too find buying and selling a vehicle a royal pain. I go a little overboard researching what vehicle meets our needs [highway, commute, teams, work, haul stuff] at different life stages as a 'best buy' make and model. I think we mostly sell the existing vehicle privately as I've bought cars privately, at auction and at dealerships.

I try for 2-3 y/o with transferrable warranty, and ask for maintenance papers. DH is terrific at price negotiations and we always established our highest price figure before he begins any dickering. We avoid any emotional involvement until we get papers from DMV. If the cost is higher than our established limit we walk away, leaving our card if the seller/sales person decides our offer is acceptable. We do our best to keep it all very amiable.

It's a lot of work but it's the second most expensive thing we buy and we work too hard for our money to waste it on a car that makes life frustrating.

[tripods68]

I enjoy selling and buying used cars online, craigslist, and going to dealers. I usually keep used cars for 3-4 years and resale close to what I've paid for, if not with small $$. I guess i'm just the opposite here.

[disneysteve]

I enjoy selling and buying used cars online, craigslist, and going to dealers. I usually keep used cars for 3-4 years and resale close to what I've paid for, if not with small $$. I guess i'm just the opposite here.

I think this makes the absolute most financial sense if you are so inclined.

Depreciation is rapid early in a car's life. From brand new to 3 years old, the value drops dramatically. However, from perhaps 6 years old to 9 years old, the decrease in value is much more modest. If you can take advantage of that fact, you can drive for very little average cost over time.

[ua_guy]

I've bought and sold quite a few cars, new and used.

In general, and the short answer is, it really depends on the car, and what's going on in the market, and you need to do what will meet your needs and constraints.

New cars are a great deal if you get them at a steep discount. What you're looking for there is dealer-advertised "1-at" vehicles with piles of manufacturer rebates and dealer cash on the hood which can be enough to significantly change the depreciation schedule and make buying new favorable to buying used. This usually requires a bit of flexibility on the buyer's behalf-- maybe buying last year's model, still new. Or with an undesirable configuration (base model, manual trans, esoteric color combinations, etc).

The key here is not to be miserable though. Don't buy something just because it's a deal, if it means you're going to hate driving it.

New cars are not a good deal when you pay anywhere near MSRP, especially vehicles or vehicle classes that perform very poorly in the resale market. A great example of this is a $60k Chevrolet Suburban, brand new, which also sells in the fleet market, they can be had 1-2 years later for about $20k less. And, at the end of the day, it's a Suburban--don't get me wrong, I absolutely LOVE Suburbans, but they're a pleather-and-chromed permutation of a Chevy truck platform-- the capability, build quality, and power, can be had in an actual truck for $30k less, brand new, (but 3 fewer seats).

USED cars are a great deal if you're buying vehicles with poor resale. If midsize sedans are your thing, I question why a Toyota Camry or Honda Accord is a better choice than any other midsize sedan on the market right now, especially those costing significantly less. Especially in American brands, features (things like remote start, OnStar, more advanced radio interfaces, etc) have usurped those of most foreign brands, and quality has come way up. But they still sell for steep discounts in the used market because of perception, and also heavy fleet sales. The used market is continually flooded with midsize American sedans. But you can pick up cars like the Malibu and Impala, Taurus, Charger, Fusion, for relatively cheap.

Beware of ex-rental vehicles here. And ridiculously overpriced used cars--any that you see within spitting distance of the same model, brand new. The deal on used cars can be sweetened with manufacturer "pre-owned" certification that add years and mileage on to the vehicle's remaining factory warranty.

OLD used cars are a crap shoot. Here, you're looking for stuff that's in the flat real-estate of the depreciation curve. Anything goes, because at this point, mileage and maintenance really determine the attractiveness and value.

A car's value is something you should watch, and can be a determining factor if/when you want to dump it. If you're going to keep a car until the wheels fall off, great. If not, it's value and usefulness to you will come to a point where it will make sense for you to get rid of it. A lot of people decide to dump cars when they reach the end of a manufacturer powertrain warranty, for example (often 50-60k miles, or more). Some folks still see 100k miles as being the death of a car (and its value), so they dump them at say, 98k miles.

If you ever want to know how much a car will be worth down the road, just look back at the same model year or similar vehicles in its class. So many cars have had a model history running 10,20,30,50 or more years at this point, it's pretty easy to judge. Look at vehicles like the Cadillac Escalade, Jaguar (any model), modern Land Rovers (any model) or long wheelbase versions of large Audi's and BMW's--and weep for the people that bought them new (lol).

What I've learned over the years is that people have different strategies for buying cars, for different reasons. Not all strategies and reasons are alike and the usual factors weigh in, like income, intended use, preference, financial strategy, etc. Buy a car and use a strategy that makes sense for YOU, not because someone said it's a good idea. Getting rid of a car mid-plan because you hate it or it's not working for you can be an expensive mistake-- often as costly as just buying what you wanted, in the first place.

[bjl584]

It depends on the car.

Generally 4 wheel drives will hold their value better.

Most depreciation takes place the first few years then again after about 10 years.

In most cases, you can probably buy a 4 or 5 year old car, drive it for 4 or 5 years, and sell it without taking too much of a hit.

[Weird Tolkienish Figure]

I'm a fan of capitalism in general but for the life of me I just do not understand why buying and selling cars has to be such a hassle and involve as much... scumbaggery as it does.

Just my $.02.

[disneysteve]

I'm a fan of capitalism in general but for the life of me I just do not understand why buying and selling cars has to be such a hassle and involve as much... scumbaggery as it does.

I've never understood why cars aren't priced as a flat amount. Just set a price and go with it. Saturn did that during their existence. I don't know how successful that sales model was though. Same for used cars. Set a price and that's it. Carmax does that today. They're the largest used-car retailer in the country and a Fortune 500 company, so it seems to be working for them.

Mind you, I'm not talking about private sellers. I understand haggling there. But for professional dealerships, fixed pricing should be the norm. I'd be much more likely to buy a car that way. The whole shopping ordeal is part of what drives me to keep my car so long so I don't have to deal with that process.

[QuarterMillionMan]

Next time I go looking to buy a car, I would like to bring ua_guy with me. He could write a book about it.

[ua_guy]

I've never understood why cars aren't priced as a flat amount. Just set a price and go with it. Saturn did that during their existence. I don't know how successful that sales model was though. Same for used cars. Set a price and that's it. Carmax does that today. They're the largest used-car retailer in the country and a Fortune 500 company, so it seems to be working for them.

Mind you, I'm not talking about private sellers. I understand haggling there. But for professional dealerships, fixed pricing should be the norm. I'd be much more likely to buy a car that way. The whole shopping ordeal is part of what drives me to keep my car so long so I don't have to deal with that process.

The tradition of buying a horse (that's where it all started) is alive in the car industry because most people are poor negotiators under pressure, and dealers know it. Simple interest financing is also beyond most folks' mental math capabilities, so dealers try to sell cars not on a negotiated or fixed sales price, but on a negotiated payment. There's no impetus to change, because negotiating is profitable for the dealer.

Some new car dealers still use flat pricing, like Saturn did back in the day. They have a loyal following of buyers who would rather buy a car at a fixed price, even if it means they pay just a little more for the car, versus dealing with a cutthroat dealer.

I like Tesla's model. Buyers order a car through the manufacturer and then they are scheduled for delivery where the customer goes to a delivery center to sign final paperwork and pick up the vehicle. But, there are ongoing political battles over that model...the dealer association insists they sell through dealers in some states, because they want their cut!

Next time I go looking to buy a car, I would like to bring ua_guy with me. He could write a book about it.

I only have some knowledge here...and a LOT of time on my hands right now But I have helped a lot of people buy cars!

[Spiffster]

Im sorry but I prefer to negotiate... the fixed price nonsense just means you pay the price they want you to pay. Its a joke. They pull the same crap as any other dealer, but there is no flexibility for the buyer, only the dealership. I have seen these crooks try to sell above MSRP with a monroney sticker addendum that states some nonsense like "market adjustment: $5000".

To clarify, by "negotiate" what I mean is, I do the research online and I tell the dealership what I will pay, take it or leave it, not the other way around. No real negotiation going on.