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new car vs. used


The_buster

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Just curious if there is a benefit, other than 1st owner brand new warranty, more towards credit building. The wife wants a kia sorento. Used 2011's with 50-60k are around 15k. New ones start around 22 to 25ish I believe. Will the new car that cost more build more credit? Also which would be a better choice? For around 8 grand more we could potentially get a new one, and not have to worry about possible tires, timing belt, or any other mechanical things that could pop up.
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I'm all about owning cars outright now. That's comes with a few years of building my credit with leasing. So, maybe consider leasing the new one, then buy a used one when the lease is up and your credit is built over the next few years. It's really nice not making payments on shit that depreciates so fast.
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Just curious if there is a benefit, other than 1st owner brand new warranty, more towards credit building. The wife wants a kia sorento. Used 2011's with 50-60k are around 15k. New ones start around 22 to 25ish I believe. Will the new car that cost more build more credit? Also which would be a better choice? For around 8 grand more we could potentially get a new one, and not have to worry about possible tires, timing belt, or any other mechanical things that could pop up.

 

One benefit (to you at least) would be usually with good credit you can get stupid low payments new, sometimes 0.x% APR. This will barely make up for the hit in depreciation you take in however long it takes to drive it off the lot. No, the expense of a vehicle will not hurt or help credit. Research how credit scores work and you'll see what they usually look at is payment history, credit utilization and credit history length. In most situations it would be best to get a payment you know you can afford no matter what and not stretch yourself thin just to get it paid off quick. A missed payment or two can drop you quite a few points unless you are already in the shitter.

 

At least this is what I've learned from my research and what I've been told over the few years I've worried about credit scores.

 

Also, don't let Kia/Hyundai's warranty length fool you. That is only for the first owner (10yr/100k). The second owner gets a more typical 5 years or 60,000 miles of powertrain coverage. I'd just say to buy a used 2011-2013 that came off lease, someone would have (hopefully) taken good care of it, you are getting it for around half of MSRP and you still have a good chunk of warranty left.

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CPO is the way to go imho.

My wifes Sonata came with the remainder of the 10yr/100,000 mile warranty.

walked off the lot with a fresh off lease car, paying 10k less than new.

obviously paying cash is awesome, but most off us don't have 15-20k laying around to buy a car outright.

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Paying cash and own outright is the best, I would never have a loan of any type on a car unless trying to build credit

 

On a sub 10k dollar car yes this makes sense. With how cheap it is to finance cars and borrow money these days it makes no sense to use cash. You can make money using your cash over however long the term of the lease is versus just spending it all.

 

I used to be hardcore cash buyer for everything small and large purchases. In fact up until two years ago I didn't have a single credit line. I have learned how hard I made life by not using credit.

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Not all cars follow this chart exactly... but more often than not this is the case:

 

http://media.ed.edmunds-media.com/non-make/carbuying/carbuying_274_600.jpg

 

I personally try to buy my personal cars toward the beginning of the "blue box" (ie. one year old) and sell them before the next big drop (ie, when the car is 3-4 years old)

 

 

To me, it's not how much I initially pay for a car... it's how much I spent IN RELATION to what I can get out of it when I am done.

 

I can't tell you how many "high dollar" vehicles, I have owned for less out of pocket money than some people spend on a owning brand new shit bag car like a Suzuki or something for a couple years.

Edited by 2highpsi
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Maybe I'm reading the graph wrong, or it's made incorrectly. Shouldn't it be buy at 2 years and sell at 4-5?

 

That chart was the first thing I found on google images within 10 seconds. While it wasn't entirely accurate, I thought it atleast did a decent job in illustrating my point. In my experience the box should start at 1 year and end at 3-4 year.

 

Again, individual makes or models will shift the box slightly one way or another.

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