# Opinions? Best way to drive a car



## faline (Feb 10, 2011)

I'm at the end of a 4 year lease with Honda. Nice to be able to give it back because it had an accident, but man oh man, leases are a PAIN and expensive! 

What's your opinion on the a financially friendly, best way to drive a car?

-Lease?
-0% Finance a brand new car (so you're assured of how it's been driven from the start)
-Buy a +-2 year old car privately?
-Buy a +-2 year old car through used car dealer? 
-Buy an 8 year old cheap beater and hope it lasts a few years.


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## andrewf (Mar 1, 2010)

I would say buy a ~2-3 year old car through a dealer, but for full disclosure, I bought a new car most recently. Mostly because used prices were very close to the prorated cost of new (a car with 25% of useful life gone was only perhaps 70-75% of new cost--I needed a bigger discount to take on the risk of buying used). I plan to drive this car for many years, though and thus will take good care of it and hopefully the average annual cost is reasonable.


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## faline (Feb 10, 2011)

Thanks for your throughts. 
I've found the (private) used car prices to be higher than I expected.
But I did find a 2010 Mazda3 with 48k kms on it for $13k. Seems pretty good so I think I'll jump on it. 
My other consideration is for $23k, a brand new Honda FIT. But for 2.5 years worth of wear I'm saving $10k. Plus (though I'm unsure of this) I believe the Mazda3 is a better car.


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## the-royal-mail (Dec 11, 2009)

Better not jump on anything. As with everything else due diligence should be the prime motivator. There will always be lots of cars for you to choose from. Don't rush and don't fixate on a particular car early on. Cars that are super cheap might have problems, liens or other issues that are not obvious right now.

There are some used car dealers that will stand by their product. But you will be paying the price for it. It's nice to buy a car from them from the POV that they have the paperwork organized, can safety the car etc. Most private individuals don't really know what they're doing and the only reason many people sell privately is because they are not happy with the price offered to them by a dealer in trade. So they're trying to get a better price by selling privately.

I'm not a fan of brand new cars due to the cost. 0% financing helps but they don't always have that deal on the popular models. There is also quite a bit of sales pressure involved and there are tons of add-on fees the dealers add.

Forget about an 8 year old car unless you can't afford a newer one. That's the era of repairs and other such things and they will get increasingly costly over the coming years.


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## faline (Feb 10, 2011)

Excellent points - thanks, much appreciated.


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## Barwelle (Feb 23, 2011)

If you're buying used, check out Phil Edmonston's Lemonade books. He rates most of the cars out there for reliability and such. More useful if you're buying older than 2 years, since it can take a little while for the bugs to show in vehicles, but still good for reference.

If it were me, I'd buy privately, but only for a car that has not been in an accident and is known to be reliable. But you really should get a CarProof Report (not Carfax because apparently Carfax is American and won't show as many records on Canadian registered cars.)

Another thing to keep in mind... avoid buying a car in the model year in which it has had a major overhaul. Newly redesigned models come with oopsies that are usually ironed out in later models. For example, I bought a 2005 Civic. I specifically did not buy an 06 or 07 because it was redesigned for the 2006 model year. (And anything newer was out of my price range.)


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## Jungle (Feb 17, 2010)

One of our worst financial mistakes was buying new from the dealer. Depreciation is so high during the first couple of years. 

On the other end, I don't like buying and old car plagued with costly repairs and poor reliability. 

So I like your option two, buy a car two years old privately.


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## marina628 (Dec 14, 2010)

We bought a demo last year and saved $16,000 it had only 17,000km on it but came with all the warranties etc.


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## Oldroe (Sep 18, 2009)

I them new and keep them for 10-12 years. The wife's is 6 years old so she will get a new one 3-4 years.


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## Sherlock (Apr 18, 2010)

Buying slightly used (2-4 yrs old) and paying with cash is the way to go.


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## Russ (Mar 15, 2010)

I buy older cars with low kilometres, sometimes privately, sometimes from a used car dealer. I have had very good luck over many years. 

My recent winner: In July 2007 I bought a 1999 Malibu with 114,000 km for $5,700 all in. I drove it 88,000 km. until December, 2011. It had some minor repairs during that time, but nothing serious. I was thinking of getting rid of it because it had some rust and was soon going to look a bit ugly. I do some of my own maintenence and have an excellent, very reasonable mechanic who does the rest.

In December the car was stolen from my driveway. Don't ask - I have no clue why anyone would want to steal a 12-year-old car with over 200,000 km, but it still has not been found. The insurance company settled with me for $3,700.

According to my math the cost of this car plus abnormal repairs (not including tires, batteries and other normal wear items) came out to about 2.6 cents per km.

I don't usually get off this easy, but 5 cents per km is not hard to do. If I were to pay $15,000 for a newer vehicle, I would have to drive it 300,000 km with no major repairs to match 5 cents per km. Maybe possible, but I think that is a riskier strategy.

I certainly can afford to drive a newer car, but I'm really frugal with cars and I enjoy the challenge of keeping an older car running and saving money.

YMMV.


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## dcaron (Jul 23, 2009)

Russ said:


> I enjoy the challenge of keeping an older car running and saving money.


I drink to that. I have a 10 year-old, 2002 BMW 330xi with 157,000Kms. I bought this car w/142,000Kms privately over 1.5 years ago for $10,500. It came with eight tires, OEM bike rack, and brand new brakes. Its original price tag was $59,000 in 2002. It is solid, handles like a new car, has plenty of power, luxury, and safety features. The car is still in really good shape, with no surface rust, and no signs of excessive wear.

Since this is an enthusiast car, there are plenty of great forums out there with detailed DIY's, including pictures and even videos occasionally. I do most repairs and maintenance myself with basic tools, and Im not a mechanic. 

My second car is an eight year old 2004 Mazda 3 GX, with 155,000Kms. I bought this car w/91,000Kms from a used car dealer, 4 years ago for $9,200. It drives great and is very reliable due to limited electronics and minimalist options on the car. All Ive changed in 4 years is two burn-out headlight bulbs. Unfortunately, the body has started to rust in know vulnerable areas, such as around the wheel wells.

I initially bought new and pre-owned "certified" cars that I did not research that much or know much about. I relied on their warranties for unplanned repairs. For my last 5 cars, Ive taken a little more risk by buying older cars, after doing my research, and getting the cars pre-purchase inspected. I take care of the ongoing maintainenance myself for the most part. 

I will never buy brand new cars again. The ones that interest me are simply out of my price range, depreciate too quickly, and I just hate getting stuck with monthly payments for years.


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## King Tut (May 3, 2009)

*Liability insurance only!*

Russ, that is a great way to save money. After all, as long as it is safe to drive and takes you from point A to point B, that's excellent.
One Idea that you may want to consider is to have a one way insurance (liability only). I understand that you got $3,700 back for the stolen car, but how much did you pay for the extra insurance along the years? I think more than the $3,700.


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## jcgd (Oct 30, 2011)

I prefer 2-4 years old, paying with cash from a dealership. I like to get in before the warranty runs out. I also find used cars of this age generally overpriced. People like to get whatever is remaining on the loan and they tend to forget the initial drop in worth when you drive off the lot.


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## hystat (Jun 18, 2010)

old cars are great for local driving and shorter commutes, but you can't take them on a long trip.... trust me, when a transmission dies on the New Jersey turnpike, it will offset any savings. 
But, with some planning, renting can handle the cross border trips.... kind of a hassle if you are used to impulse road trips. 

But I'm on board with the 2 year old car thing.... I look for at least 18 months of factory warranty remaining. 

4yo is getting a bit long in the tooth for me, but definitely 1-3 year old units are cost effective. 
My last 2 purchases were both 2 year old former daily rentals and they have been good cars. Each had around 30,000km and the one (2004 Kia) is now 8 years old with 180,000km and no major issues at all. Each were purchased for around 55% of what the same unit new would cost at the time as I recall.

The problem with the buy new and keep 10 year philosophy is finding a vehicle so versatile it will suit your needs today and your needs in the year 2022.Do people really know what they'll want to be driving in 2022? I don't


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## lb71 (Apr 3, 2009)

andrewf said:


> I would say buy a ~2-3 year old car through a dealer, but for full disclosure, I bought a new car most recently. Mostly because used prices were very close to the prorated cost of new (a car with 25% of useful life gone was only perhaps 70-75% of new cost--I needed a bigger discount to take on the risk of buying used). I plan to drive this car for many years, though and thus will take good care of it and hopefully the average annual cost is reasonable.


I found the same thing when shopping for a vehicle recently. I did not find the price of 1-3 year old cars offered enough of a discount over new.


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## LondonHomes (Dec 29, 2010)

Everytime I've gone car shopping in the last few years I've started off looking at used but found that a new car just wasn't that much more expensive. So I ended up buying new.

If you are planning of keeping a car for most of it's life then buying new isn't that bad of an option. It's when you churn your car every 2 to 3 years that when the early depreciation really kills you. I'm trying to keep a car for 8 to 10 years, getting a new reliable one every 4 to 5 years and trading in the oldest car.

Mind you, I never get all bells and whistle on a car and I'm looking for about as basic option wise as you can get it. This really helps to keep the cost down.


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## crazyjackcsa (Aug 8, 2010)

I agree with Londonhomes, but I push it a little further. 
I try to get 15 years or 300k, whichever come second. I don't drive as much as my wife, so I aim for the 300k. She aims for the 15years.My wife's car is 12 years old, mine is 18. By the time we're done with them, the value is strictly scrap.
The trouble I always run into is finding a base model. It's hard to do.


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## Young&Ambitious (Aug 11, 2010)

My preference is to buy 2-4 years used privately, carfax report + car inspection and ta da, savings! 

ps. I vote for the Mazda 3, I have one and I looove it. It's been good for road trips, can fit 5 people and 2 dogs, and helps enormously on moving day with the hatchback space. Not to mention it's fun to drive. 

Happy shopping


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## Russ (Mar 15, 2010)

I don't mean to hijack the thread, but King Tut had an interesting thought on the insurance.

I pay $100 per year for comprehensive ($100 deductible) and $212 per year for collision ($300 deductible). There was no deductible on the theft.

Would I be better off dropping one or both of these coverages? For some reason I always feel uncomfortable when I consider dropping them.


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## Cal (Jun 17, 2009)

My preference is for a 1-2 year old car. Then you still get a few years under warranty too, and don't pay top dollar.

(Hyundai, Mitsubishi and Kia are all currently offering 5 year warranty, so if you buy a 1 year old car, you would still get 4 years of bumper to bumper coverage, short of wear and tear)


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## The_Mechanic (Jan 6, 2012)

I'm biased because I'm a mechanic so fixing my car costs me very little, but I always buy 7-8 year old cars with very high mileage. I lose almost nothing on depreciation since they've already lost most of it by this age, and I'll even sell for a profit every once in a while. I maintain my cars in tip top condition and never pay more than 10k for a car. 

I always pay cash because to me paying interest on something that loses value = major no-no. 

Older cars also cost much less insurance and you dont mind a scratch or a ding quite as much.


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## londoncalling (Sep 17, 2011)

Lots of good points from different camps here. It basically comes down to a few things.

Are you mechanically inclined? If so then nothing wrong with buying a used car after doing your DD. You'd do the same for an investment and a car is an investment with no gain so minimize your losses.

How much does your peace of mind cost? If it's alot then new car with max deductible is the way to go. However, with 0% or near 0% financing it may be fine on a per km basis. Depends on your insurance costs. Single male under 25 with a red 2 door in Alberta? Run! 

Buying brand new can be financially great. Especially if your gonna drive it into the ground. Both my spouse and I bought used and owned them a long time. My current vehicle is an 86 GMC Sierra with only 160k and have owned it for almost 6 years. Sadly, it got hit not too long ago so I am dealing with an insurance adjustor. So far, it is going ok. Our last purchase was done over a year ago. We ended up buying new(first new vehicle for either me or my spouse) because it was cheaper than used because of interest rates. We also bought just before year end, on the previous year model,with excellent credit and knew the dealer cost going in. The stars aligned perfectly. We also plan to have it paid off in 3 years at .9% with 5 year warranty so going used was not an option for us. We plan to drive it at least 12-15 years if possible. Will purchase new again after 6-7 years depending on price and interest rates.

You dump your car more often than Lindsay Lohan goes to court or rehab? A new car is throwing away cash. a slightly used car may not be a bad choice. If you don't put on lots of kms leasing may not be the worst choice either.

No matter what you choose, you need to do your research to get the best deal possible or as close to it as you can.

I remember working in the Alberta about 8-10 years ago. guys would be trading in vehicles every year or two. They often wondered how I didn't get caught up in the game. Often they would want me to buy their wheels so we could save on trade in costs. I told them that "my 10 year old half ton got me to work 15 mins before them and it's been paid since day 1. Parts can be found in any vehicle bone yard and repairs can be done with a wrench instead of computer diagnostics. How long till the dealership or bank no longer owns yours?" That was often followed by silence till someone would say "he's got you there."

If you want to own the best and fanciest of vehicles that's fine by me. Just make sure you realize you know what it costs when everything is said and done. Not that most of us here don't already know all of this.


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## MrMatt (Dec 21, 2011)

Cal said:


> My preference is for a 1-2 year old car. Then you still get a few years under warranty too, and don't pay top dollar.
> 
> (Hyundai, Mitsubishi and Kia are all currently offering 5 year warranty, so if you buy a 1 year old car, you would still get 4 years of bumper to bumper coverage, short of wear and tear)


I bought my new car during that momentary inflection where some new cars could be had for less than a 1-2yr old car.

When you consider incentives, and cash purchase discounts (vs 0% financing) you might find that that 1st or 2nd year of car ownership can be VERY cheap.


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## mind_business (Sep 24, 2011)

My car history has been:

16 yrs old - Parents bought a used '64 beetle for my sister and I to drive.

17 yrs old - Parents bought a used '72 Honda Civic for me, after my sister totalled off the beetle.

19 yrs old - Parents bought a slightly used '82 VW Rabbit for me. Loved this car!!! Very reliable.

27 yrs old - Parents swapped their '81 Dodge Challenger for my Rabbit (I think I lost out on this deal  )

31 yrs old - Wife and I bought a 1 year old buy-back '97 Mercury Sable (POS).

38 yrs old - Wife and I bought our current '05 Toyotal Matrix. Bought it new. Hasn't been too bad. Recently spent around $4 grand on repairs ugh.

Long story short, Going forward I think we'll always buy new or almost new. I like the idea of having a mechanically reliable vehicle for the first 5 years or so. We do regular long driving trips back west to visit our families, and I'd hate to do that in an older vehicle, which I don't know it's maintenance history. As you can tell from my vehicle history, we don't believe in owning expensive vehicles. We are a one car family, and won't likely spend more than $25 grand on our next one.


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