Are there any reasons why I shouldn't buy a NEW car?

Question

Since Hondas hold their value so well, it's only a few thousand more, with no miles (and no problems) to buy a brand new one. Plus my interest rate is better.

But I've always heard "Don't buy a brand new car"...and I'm not exactly sure why.

Are there any reasons whyI shouldn't?? THANKS!!

Answer 1

The biggest reason against buying a new car is depreciation. Any car, even a Honda, will depreciate a lot when you drive it off the lot. The instant you take possession it goes from a new car, to a used car. So if you are planning to sell the car anytime soon, you will lose several thousand dollars right off the top.

However, if you are planning to keep the car for a long period of time, then the extra cost isn't as much of an impact. You're still never going to get your money back but those extra thousands for the peace of mind of having a brand new, unabused car can be worth it to some people.

If you're considering a lease instead, read all the fine print. Make sure you're not going to get stuck buying the thing later because of damge, or excessive mileage.

Answer 2

The reason everyone says that is because you lose half the value of the car (on average) once you drive the car off the lot. But, true, being a HOnda, does make a difference.

With a brand new car, you have a completely brand new warranty, which can be for up to 3 yrs or so. That can be a great advantage, if you need work done. But with even a couple years old car, a dealer's warranty might only be 30-60 days, maybe one year if you're dang lucky. But you'd also be spending a lot less to purchase that car.

It's kind of "6 of one; half dozen of the other" type thing.
Is full warranty and brand new car worth the higher price you'd pay for it?

But since the interest is much better for brand new, then enjoy the fun of owning a very ultimately brand new car!!!!!

(The interest rate is probably better, so that you WANT to get the new car, because if they have to repo it, then they can get more of their money out of a new car, rather than a used car!!)

Answer 3

You want the best bang for your buck.

They will both depreciate the same per mile driven so don't worry about that aspect.

What you want to look at is the fact that if you buy the new car TODAY and sell it TOMORROW you already lost 10% ( rough estimate off the top of my head) of the value of the car. So the new car will cost you that 10% plus what you "lose" from depreciation, so the school of thought is to let someone else take that new car 10% blow and buy used with a decent warranty!

Answer 4

Well, as soon as you drive off the lot, you've lost an enormous amount of money, as the car automatically loses a huge chunk of its initial value. Hondas hold their value better than almost all other cars (for good reason), so if you are going to buy a new vehicle, a Honda is probably the best way to go. In general, however, buying new cars is a waste of money.

Answer 5

Here's one. The minute you drive your beautiful new car off the lot, it becomes a used car, and you lose 15%-20% of the value of the vehicle, right there. So, let's say you pay $20,000 for a new car, you drive it and it is now worth $15,000-$17,000 if you had to sell it. Your loan is for $20,000. If you plan on keeping the car for the duration of the loan, it's no problem. But let's say you can't afford the car in the future and need to sell it, by then it's depreciated even more and you can't sell it for what you owe on the loan. Even a slightly used car is a better deal from a financial point of view because the initial depreciation has already been taken.

Answer 6

You shouldn't buy a new car because of the depreciation on them are very high / fast. They loose value faster than a bride on a wedding night.

Let's do some numbers: If you were to buy a car for $30K and in five years the resale value is $15K, that car lost $15K of value. So that $3k per year. That means you are losing about $250 in value every month. Imagine if you had to pay that much in repair bills every month (year in and year out).

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If you were to buy a slightly used car, the biggest lost in value is already done in the first 2 years. The first 2 years that same car could already have lost resale "value" by as much as $10K. Then the next 3 years may only lose another $5k to $6K. So that comes out to much less than $100 per month (if you bought a slightly used car).

But don't buy a used car from a dealer. Recently MSNBC did a report about buying used car story. They say that (a) used car dealers are the worst place to buy used cars. They are the absolute master at hiding faults. (b) car auctions are often places that even used car dealers are dumping cars that they can not sell (c) private sellers are the best because what you see is what you get. Most private sellers do NOT know how to hide problems. So if you know how to look it will all be there to be found (like oil leaking, weak vacuum hose, etc.)

I have to add probably another place is the national car rental chains. They are bound by corporate policy to sell their cars at certain mileage no matter what. I had a co-worker rent a car (unlimited mileage) and went on a road trip (NYC to Florida, to Texas, to LA, to Oregon to Chicago to back to NYC). In 2 months he clocked something like 10K miles (on the highway). Anybody who bought that used car got a good deal.

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Good Luck.
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Answer 7

The depreciation factor the first year is as high as 28% from what you paid out the door, for a better understanding the cons and pros buying used VS new, study this website http://www.usedcartips.org/index.html

Answer 8

Many people say it is because they lose a good amount of value the minute you drive them off the lot, and yes they do, but I like the idea of everything is covered under warranty, so I always buy new.

Answer 9

Yes, the reason people say don't buy a new car is because of the instant depreciation. But you do have a better warranty.
So, if you have your heart set on a Honda, please look at the following site for all their recalls:

http://www.internetautoguide.com/auto-recalls/01-int/honda/index.html