Love that new car smell? Not anymore.
Posted on February 19th, 2009 – 5:27 PMBy Kara McGuire
My Dad is retired from Ford and I think auto industry babies are from one of two camps: Car lovers or car users.
I’m a car user. I’ve never picked out a car in my life. The two cars I’ve owned began as lease cars and I purchased the gently used vehicles through my father’s connections at work. Sure there are other cars I like better, but my philosophy about cars is “if it gets me from here to there (and now that I have kids, can transport all of the people and stuff I need to), that’s all I need.”
Needless to say, I can’t stomach the idea of spending more than $20,000 on a vehicle. But for many folks, that new car smell and the feeling of driving a new car off the lot is a powerful aphrodisiac. At least it was before the recession.
Now, Edmunds.com is seeing that more and more people are buying used. Approximately 511,000 used cars sold in the past three months would have been new car sales in a more normal economy, according to new data.
“Projecting ahead, this could represent a seasonally adjusted annual rate (SAAR) of more than two million vehicles, which equates to more than 15 percent of total new car sales. In manufacturing terms, that amounts to about two assembly plants’ new car production,” said Edmunds.com.
If you were to buy a car right now, would you go used? Or would you head to a desperate dealer in search of a bargain?
There are a lot of low interest rates and rebate deals out there. Plus the new stimulus encourages new car buying by allowing buyers of new cars and trucks worth up to $49,500 to deduct sales or excise tax even if the buyer takes the standard deduction.
Minnesota imposes a 6.5 percent sales tax for car purchases.
7 Responses to "Love that new car smell? Not anymore."
I keep hoping they’ll come up with a fuel efficient minivan or small SUV soon so I can buy one used in a couple years. I found a way to fit 3 car seats in my ‘99 Civic but it would be nice to have more space when this car eventually bites the dust.
I finally broke down and we bought the ubiquitous minivan my wife has wanted for a long time. My wife uses it for the short hauls around our town, while I use an older smaller vehicle for my 20+ mile commute.
We bought the van used. Brand new it would have been $25k+, three years and 50k miles later, with tax title and license, it was $10k out the door. Can’t argue too much with that. Even if we needed to do some work on the vehicle, it would never add up to $15k.
The recession doesn’t change my answer to this. I could never justify buying new only to have such severe depreciation as soon as I drive it off the lot. I’ve got a favorite used-car dealer that I always recommend to people who are shopping. It’s nice to buy a 2-3 year old car that might even still have some warranty left on it but has weathered the major depreciation already.
Three months ago I looked at some of the 0% financing deals on new vehicles, but even at that rate they’re charging too much for the new car smell. We ended up with a slightly used vehicle instead.
We had a car die in December and we took two weeks to do research etc. We were not in a position to buy a new car nor did we want to be upside down. Patience prevailed and we purchased a great used car at Inver Grove Heights Honda and we have a reliable, economical vehicle and got a great deal in the process. Most of all, we are not upside down…
We went looking for a minivan last summer. I have never purchased a new car, but my husband has. His only requirement for this new ride…that it be American made. He has an american convertible, which we store in the winter and he drives my old foreign car. We purchased a used Ford minivan and will never purchase a new car again. We also hope that we can continue to purchase american made cars in the future…but it isn’t looking good.
We sold our oldest car last weekend and will buy a new car this weekend.
I will buy a used car with a year + left on the warrantee, I expect to pay about 60% of the new car price.
That was the route I took on the car I sold. I owned it for 9 years and had depreciation expense of about $700/year. My goal is to buy a used car that is rated as reliable by Consumer Reports and experience less than $1000 in depreciation per year.
