Comments on: Cost vs. value: Why I bought a new car

By: Manish

Manish — Wed, 29 Jul 2009 12:41:31 +0000

This goes well with understanding the difference of value and Price .

I bought a mobile phone at Rs 800 ($16) for my home , just to use it for days use . The value it provided my was much more than $50 i would say .

This is a nice read on the topic : http://jagoinvestor.com/2008/10/price-vs-value.html

Manish

By: Casinospt

Casinospt — Wed, 29 Jul 2009 11:07:35 +0000

You are so “human” that it makes me sick.

By: Ken

Ken — Wed, 01 Jul 2009 02:24:38 +0000

I find it amusing that Ramit will say “to apply a broad rule that “used is the best” is idiotic” and yet makes the same broad comments that renting (vs buying) a house is “the best”.

His overall argument for buying a new car is “value”…and gives a few examples demonstrating that, yet cannot comprehend that someone could make the same argument of ‘value’ in talking about buying a house.

Also, in his blogs he almost brags that he applies ‘cold reason and logic’ and elminates all emotion from financial decisions. If that were true, he would admit that buying the identical ONE year old car and driving it ONE year less (getting a different car sooner!) would save him the first year’s depreciation (3-5k in his example)…not to mention cheaper insurance and less interest paid on his loan.

It seems like Ramit is really just writing this article to justify a very, very dumb purchase…
Anyone with basic math skills could step through his argument and show the bottom line

By: James T.

James T. — Sun, 01 Mar 2009 01:27:16 +0000

I’ve always wondered if Toyota or Honda has better marketing than other brands because their cars have a reputation of reliability. However, I’ve owned only Toyotas and Hondas all these years, and they are very reliable. If you buy them used, they normally cost almost as much as a new one. The unknown factor is the previous driver(s). Did they drive the vehicle roughly? If you have intellectual skills, it is better to buy new so that you can contribute to the advancement of society because you will not be restricted by the reliability of your vehicle. If you are mechanically skilled and have lots of time, then buying used would be a rational option. I remembered my old boss who tried to save money by buying a used mustang. The engine died while she was on the freeway. She got hit by another car. She ended up buying another used car which made it more expensive in the long run.

By: Jon Thompson

Jon Thompson — Sat, 31 Jan 2009 14:28:46 +0000

Three people that love their Jetta. I have a 2007 Wolfsburg that I bought with 35 miles on it (10 of which I put on in a test drive.) It is the finest car that I have driven. I’ve had a count of one warranty issue (airbag controller needed replaced.)
It’s a little small for the baby seat, but will be fine once my littleun is too big to sit backwards.

NEVER buy a former rental. Those things may look nice, but will be a mess under the hood. They’re beaten, and beaten, and beaten. That’s why the rental companies cycle so fast. Otherwise do you think _they_ would by new cars so fast?

By: Josie

Josie — Sat, 24 Jan 2009 22:05:51 +0000

Now you know TWO people who like their VW Jetta. Actually, I LOVE mine. It’s 10 years old and still running great. Much more fun to drive than my Honda, which I also like. Lots more pick-up, too.

By: Gary

Gary — Sat, 24 Jan 2009 15:52:01 +0000

There are better ways to do this if you know the car business:Way #1: The dealer demo.This is a cream puff, immaculately maintained and because it's a dealer demo sells as a "used" car, but has a "full new-car" warranty PLUS, all the new car garbage (loose screws, fixes, etc.) have already been done. Savings can range 30% easy.Way #2: The off-lease beauty.Major rental companies like Avis are the largest purchasers of motor vehicles in the USA. They turn their fleet over every 8-14 months, keep full records of all repairs including service, accidents, paint chips, whatever, and buy all major brands and models. And the existing factory warranty still applies to these cars, plus you can add a factory extended warranty, which is always worthwhile if you plan on keeping your car. Financing? No way. If you need financing, go to Way #1.Tip: Avoid buying a used car from a private party, You have no recourse. If you buy from a relative and there's a problem, it becomes a "family issue" that will fester for decades. If you buy from a friend and there's a problem, you have one less friend.Tip: Avoid non-factory "warranties". I don't care how convincing their ads are. There must be fifty bazillion of these schemes out there and the only person it pays off for is the one who sold it to you. These are not "warranties" at all. They are insurance policies. Read the fine print!The bottom line with this is that you have all the practical benefits of the new car, i.e., reliability, warranty, technology, etc., and none of the drawbacks, i.e., 30-50% instant depreciation, delivery bugs, etc.If you want that "new car" smell go buy a can of "new car smell". Yes, I know it sounds ridiculous but it actually is an odorizer and can be purchased in a spray. It is commonly used by dealers for both their new and used inventory.

By: David

David — Fri, 02 Jan 2009 01:04:50 +0000

We were in the market for decent used cars over the summer.

In our area, there was hardly any supply of decent 2-3 yr old honda/toyotas. We looked for weeks and found nothing. We widened the scope and took a look at 3 different 3-4 year old hondas at a decent dealership. Their condition was ridiculous.

On the way out, I noticed the Honda Fit was selling new for only $1,000 – $2,000 more. We bought the Fit and love it.

By: Rachel

Rachel — Tue, 23 Dec 2008 23:44:29 +0000

I agree with you here. I also bought a Honda Civic (I know it’s not an Accord) this year new. I’m 22 and I just did not want to go through the hassle of possibly buying a car with hidden problems. I also knew that I wanted a car I will drive for a very very long time. I figured in my industry as a consultant it also pays to make sure you look at least presentable to others, so riding a ghetto car was not an option. I believe people who are complaining that you are extravagant for buying a new car are the same people who dress terribly to work or to interviews. So many people on “frugal” sites are so wrong in this area about being against dressing well to work. I know as a career counselor that what you look like to work or to an interview is a deal maker or breaker. So thanks for sharing your honest opinion and I do agree with you on this post.

By: Bill

Bill — Sat, 20 Dec 2008 09:05:38 +0000

You can justify anything you really want. This is a perfect example. Show me any study/facts that indicate a new car is a better “value” and costs less in the long run than purchasing a 1-4 year old used vehicle. And make sure you include the interest you pay on the new DEBT you incur while I drive the same vehicle debt free because I paid cash and let some other guy take the depreciation hit who just HAD to have a new vehicle because he justified it and who also justified buying a car he couldn’t pay cash for by saying it will improve his credit score that is so important. Keep paying those banks and I’ll keep paying myself.