# Vehicle Purchase-avoiding initial depreciation



## Madpiper (Jan 29, 2014)

We are looking to buy a newer truck. What is the "sweet spot" as far as age & km are concerned; in order to get the best value for our purchase. How long are people keeping a vehicle prior to seeking or trading in?


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## wendi1 (Oct 2, 2013)

Phil Edmunston writes a series called "Lemon-aide" in which he discusses this at some length. You can find it in the library, if you don't want to pony up the price of the book.

I don't drive a truck, but for mid-sized sedans he recommends a lease return 3-5 years old with less than 20K km a year, which is what I bought. I currently drive a 1998 Escort, and I think it might have a couple more years left in it... they will have to tow this puppy away.


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## fraser (May 15, 2010)

A few years ago we shopped for a second car. We wanted a high end Japanese label.

We found that four years old with some warranty left on the clock was the sweet spot for what we wanted. 21K vs 38K-40K new. Four years old, 48K on the clock. We spent $800. on tires and another $ 200. on brakes in the first six months.

It took us 3 months to find what we wanted (fussy). We tried to buy three others. Despite claims to the opposite, we ran reports and found that the first three that we picked had been in accidents (one was at a dealer). We always run our own report but this sometimes not accurate. Rental agencies sometimes repair cars on their own dime and the accident does not go in the system (or so our Toyota mechanic advised us). Finding a good one, with the options and mileage that you want is not as easy as it sounds. It takes time and patience.

We will keep the car for 15 years, barring any unforeseen incidents. It may not make a difference in the long term, but we certainly put the money difference between new and used to good use. We had some good vacations.

Our annual insurance premiums are also about $100. cheaper with the used ride over a new one.


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## Eclectic12 (Oct 20, 2010)

I bought two of my three as a year old demos (6K Km or less on them), one from a third party and one from the dealer.

The first one I kept for nine years and the only reason I replaced it was the body work that was needed. I put something over 180K KM on it.
The second I kept for fourteen years then gave it to my brother before a DUI totaled it two years later. When I gave it up, there was something like 340K Km on it.

This last one I took advantage of the 0% offer but since they wanted to move it and my only requirements were a manual shift plus AC - I insisted they remove the add-on charges or find me another car, so the sun roof, stereo and a couple of other items were removed as well as discounting the price (plus the $1K discount for being a Costco member).

I'd have to see if I still have notes for how much the first two were discounted from what was in the Lemon-Aid book at the time.


Cheers


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## RBull (Jan 20, 2013)

There is no one sweet spot or easy answer to your question. 

It will depend on many factors- supply and demand in market-#of leases signed over a number of years-make and model you are looking at-current incentives of manufacturers on same model-age of model being looked at vs. age of current redesigned model-motivation of seller-mileage of vehicle you're looking at-condition vs others -warranty remaining-reports on reliability etc. Talk to many people and so called experts and you'll get lots of different opinions. Similar to investing. 

Basically you need to determine what is important to you, do your own research, calculate depreciation, factor in the variables and then search for what makes sense for you.


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## Taraz (Nov 24, 2013)

I don't know about trucks, specifically, but when buying new, you can sometimes get better deals on old models because they're trying to clear them out. I bought my 2007 Pontiac Wave new in Feb 2008 and paid approx $10,500 (including taxes, etc.). I believe the 2008 equivalent was selling for upwards of $15k at that point, and even many used 2007 versions were selling for more. 

Realize that they generally screw you with financing and try to upsell you on useless "coatings", so just say no and pay cash.

The less picky you are, the more options you have when looking for deals. (I shopped between all the dealerships, with zero brand loyalty.)

Also, research prices (there are several online services that help you do this), and email all the local dealerships to see if they can beat any price that you're quoted.


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## peterk (May 16, 2010)

Taraz said:


> Realize that they generally screw you with financing and try to upsell you on useless "coatings", so just say no and pay cash.


Also that once used, those upgrades resell for pennies on the dollar. Good if you're the used car buyer, bad if you're the used car seller.


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## Taraz (Nov 24, 2013)

Not only that, the "anti-rust" coatings actually make your car more likely to rust. "Coatings" are a total scam.


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## MoreMiles (Apr 20, 2011)

You guys are talking about all these as everything is in your control. 

The reality is, if someone rear ends your car or backs up into your car door at the parking lot, your car just becomes worthless despite good subsequent repairs and replaced pannels. You can be a perfect driver but someone can still drive bad, especially in Toronto. If you are banking on having a certain dollar amount of residual value at trade-in, don't count on it. 

Insurance only covers repair cost but not loss in trade in value. Everyone pulls a carfax or car-proof report before buying your used vehicle so there is no way to hide unless your repair it off the records yourself.


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## RBull (Jan 20, 2013)

^yes because in Canada we don't have diminished value insurance coverage like they do in the US. It should be available to Canadian auto insurance offerings. 

I don't think you mean to say a vehicle becomes "worthless" after having an accident that has been repaired. It loses some of it's value which will vary based on type/extent of accident, vehicle etc. Sometimes it loses almost nothing. Like you eluded to many repairs are done and paid without making an insurance claim. Carfax or |Carproof only captures some of the repaired cars out there.


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## Taraz (Nov 24, 2013)

Modern vehicles are already coated with anti-corrosion undercoatings, and any type of dealer add-on undercoating has the potential to plug the drainage paths (which traps water and makes rusting worse). 

I remember they told me that my car's color (blue) would fade if I didn't get their paint protection coat. I didn't. It's been 6+ years and it stilll looks like new. 

A few other ripoffs, according to consumer reports:

http://www.consumerreports.org/cro/2012/12/watch-for-these-sales-pitches/index.htm


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## Oldroe (Sep 18, 2009)

I drive vehicles 350-400k nobody will give 1 exacter dime if it's undercoated. I just keep that $100/year in my pocket and sell the vehicle for what I can get.


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## Rusty O'Toole (Feb 1, 2012)

My brother went through this a few years ago. He wanted a late model, 1 or 2 year old, 4 wheel drive pickup truck. Every one he saw at a dealer was either beat to death, high miles, or practically the price of a new one (within a few thousand $$$).

In the end he bought a new truck. It was cheaper than buying used. The dealer offered much lower interest on a new vehicle than the credit union did on a used one. There was some kind of cash back or 0 interest incentive. When he worked it all out the new truck cost a few dollars less per month than a used one.


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## RBull (Jan 20, 2013)

Taraz said:


> Modern vehicles are already coated with anti-corrosion undercoatings, and any type of dealer add-on undercoating has the potential to plug the drainage paths (which traps water and makes rusting worse).
> 
> I remember they told me that my car's color (blue) would fade if I didn't get their paint protection coat. I didn't. It's been 6+ years and it stilll looks like new.
> 
> ...


Almost no modern vehicles have "coatings of undercoatings from the factory". The metal itself may be of a type that has properties that resist rust, like more copper etc and this is dipped into a primer that has anti corrosion properties before doing the final painting. All manufacturers body metal and corrosion protection varies which is part of the reason some rust more quickly all other things being equal. 

With most aftermarket undercoating it is virtually a non issue with regards to blocking drainage holes, due to the hole drain size and the amount of undercoating used. The consumer themselves can do a visual check on these spots in the doors, truck, hood etc. to ensure it is not blocked. 

Aftermarket undercoating can be a good choice if you want to help preserve the condition and resale value in salt or moisture prone areas of the country. In some areas it may not be necessary and/or it may not be overly helpful if you choose the wrong product or it is poorly applied. 

Some people don't want to spend $500 over the 10 year life of their car whether it gets them that money back in the end or not, or prevents other rust related repairs.


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## DayTek (Sep 26, 2013)

My husband and I owned several used cars; Ages ranged from 2 - 10 years old upon purchase. They all varied in models: '94 Chevy Cavalier Station Wagon, '92 Ford Tarus, 2000 VW Beetle, 2000 Kia Sportage. Every one of them had problems during ownership. Master cylinder crack, leaking gas tank, rear suspension busted...I could go on. After the timing belt busted in the Kia, we decided to buy new...

We bought a 2008 Honda Civic Hybrid for $30K. Got the government incentive hybrid tax refunds after, which dropped the price down to about $26K. Paid it off last year. We get regular oil changes when due, and they inspect the car at the same time. Besides a bit of bad luck with nails in the tires, we've had *0* problems. It's at 160,000kms and we just had to replace a set of brakes...Obviously a standard maintenance thing, not an issue with the car. A little rusting around the one wheel well, but it's seen 6 winters, so it's not surprising. It's the longest we've ever owned a car and it's been the least problematic. It's been a fantastic car, but we know we've contributed to it's longevity by regular maintenance. After owning this car, we can't see ourselves ever buying used again. We like knowing how the car has been treated. Might not buy one as expensive next time, but definitely buying new. 

Maybe that doesn't help with your question, but I think buying new has it's advantages, even with the initial "driven off the lot" depreciation. And remember, the sticker price doesn't always have to be what you pay...Heckling is a craft, my friend!


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## Taraz (Nov 24, 2013)

From the article "Consumer Reports’ Annual Auto Surveys show that rust problems have almost vanished in modern vehicles." 

Why would you waste the money, for something that isn't a problem? I bet you buy the extended warranties too. :rolleyes2:


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## Eclectic12 (Oct 20, 2010)

DayTek said:


> ... After owning this car, we can't see ourselves ever buying used again. We like knowing how the car has been treated. Might not buy one as expensive next time, but definitely buying new ...


While it's good to know how the car has been treated ... not knowing for the three I've bought (though they were a year or less old) wasn't a problem. 

The only items that weren't wear was the electronic ignition module (but that applied to all of that year's model) and a rusted out gas tank ... for twenty-eight + years of driving.


Cheers


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