Let's talk about car dealership profit margins.

[madman]

Lol. Ideally, you buy a newer used car, it's still reliable but has taken the largest hit in depreciation already. Buying old sports cars is just a hobby

Another +1. Bought my last car with about 1,800 miles and 3.5 years of the warranty still on it. Buying used or previous year's model is the way to go. Let someone else take that big first year hit.

 

[LoneSage]

Smokes you buy new cars fairly regularly... how do you do it, big tymer?

 

[smokehouse]

Another +1. Bought my last car with about 1,800 miles and 3.5 years of the warranty still on it. Buying used or previous year's model is the way to go. Let someone else take that big first year hit.

This used to by my go-to rule...but then the market changed. Of the new cars we've bought, there either was no used equivalent, or the new version was so heavily discounted that it was a small difference between 2yrs old -w- 15-25K on the ODO or drop an extra $1500-2000 and get one brand new.

Our '13 Impreza was only $1800 more than a used one. My '14 RAM was about $2K more than most 3 year used trucks on the lot.

Smokes you buy new cars fairly regularly... how do you do it, big tymer?

Not sure...I guess I've just resigned myself to the fact that I will always have 2 car payments. Ready for the long? Giddyup.

-#1, I will NEVER take a loss on a car. If the numbers do not work, I will walk away.

-All of my vehicles are well cared for and low mileage, I always get a really solid trade in. Example: '14 RAM was $30K, with the $1500 down I paid + my equity on my '09 Accord, I walked out the door with a $24K note at 0% financing. So $24K owed on a brand new, $38K truck. I've owned that truck now for 2yr, 3mo and only have 19K miles on it.

-I view my cars as the only item I own that enables me to make $$. No car = can't get to work. I do not mind paying $$ for that security.

-Modern car maint is getting out of control and the vehicles are having more and more expensive problems. I know many people trying to keep early 2000's cars running and when they break, you're broke. Shit costs so much to replace and the replacement is getting more and more difficult. This isn't my 1972 Maverick, I could work on that.

-Long story short, I will not put my family in the poor house buying expensive cars...but I do consider them a necessary expense.

 

[JasonToddLives]

Ideally, you buy a newer used car, it's still reliable but has taken the largest hit in depreciation already.

Sound advice. My "used" car had 723 miles on it when I bought it and somehow the warranty was even better than that of a new car. 170,000+ miles and it's barely broken in.

 

[Lastblade]

By the way, leasing is almost always a bad idea unless you're a business with a contract. I usually see it with people wanting to drive luxury cars that can't actually afford them.

Agree about the business/contract part, but disagree on bad idea in general.

It all depends on how long you keep the car, and how reliable it is.

If it is generally reliable (Honda/Toyota) that requires mostly wear-and-tear and regular maintenance, and you keep it for 6+ years, then it is better to buy.

Otherwise, leasing is actually more advantageous. I would never buy something like a BMW. Replacement parts and labor (even independent shops) are much higher than Japanese/domestic so keeping those long term is not a great idea. I laugh when poor people buy a used Land Rover to impress their friends, it is such a money pit and that's why they are poor.

I calculated my own cars ownership cost (price paid + interest + maintenance + other issues) and it took more than 8 years to break even had I just leased a new car every 3 years. They are/were Honda as well, with nothing other than a blown tire and regular oil/fluid changes.

Also, today's car has so much technology, the "toys" are obsolete in less than 3 years (hello Apple play). To some, leasing makes more sense if tech is important to them.

 

[gusmoney]

I love this thread.

This article is somewhat insightful in this regard from today's local paper. (Its also a little superficial too.) The interview is of one of the Philadelphia areas largest auto dealers chairmen, who apparently just purchased a large group of dealers in the western US, entitled "Why boss of region's biggest auto seller has never bought a car." Have a read if you are inclined.

 

[StevenK]

I could sit down and work out the different scenarios of buying new versus a couple of years old etc etc but it's never been an issue for me, reason being the cars I like to drive are out of my price range until they're at least 5+ years old anyway.

I've always preferred owning a top end older car rather than a newer low to mid range.

 

[Lastblade]

I found that buying a luxury brand 3-5 year old used car coming off a low mileage lease to be the best deal. Typically, there is a 30-50% depreciation while non-luxury (especially Japanese make) don't depreciate as much. I bought a 3yr old top model Acura RDX, which MSRP at 33-34k for 25k with only 27k miles.

 

[Poonman]

I used to look high and low for a good price on a first generation m coupe...on any given day 40-50 are being sold in North America....and maybe one or 2 is a good deal while the rest of the sellers are less than motivated or just smoking crack, straight up.

So im not sure how applicable this can be to high run production cars, but enthusiast auto group used to fly all over the us and snap up every deal in the country... buy someone's car for 17k and after a quick inspection, a car wash and a dealership sticker slapped on the back, they'd sell that exact same car for about 24k.

So on collector cars with less frequent buyers you can expect to take it up the ass while the high volume stuff is priced to get off the lot asap.

 

[LoneSage]

Hello Sp00/\/, long time listener first time caller, uhhhh hmmm why do you never post anymore

 

[HDRchampion]

I buy car like i buy my underwear...Brand new, use it till it falls apart then buy a new one.

 

[Cylotron]

An old friend got a job at a user car dealership back in the late 90's. One day he was talking about how they'd purchase used cars from private parties/auctions. Say they'd buy a car for $2,500... they would then put it up for sale around $10,000+. After negotiations, they'd end up settling around $8,000 - 9,000 with a buyer.

 

[StevenK]

An old friend got a job at a user car dealership back in the late 90's. One day he was talking about how they'd purchase used cars from private parties/auctions. Say they'd buy a car for $2,500... they would then put it up for sale around $10,000+. After negotiations, they'd end up settling around $8,000 - 9,000 with a buyer.

Think he was exaggerating.

 

[norton9478]

An old friend got a job at a user car dealership back in the late 90's. One day he was talking about how they'd purchase used cars from private parties/auctions. Say they'd buy a car for $2,500... they would then put it up for sale around $10,000+. After negotiations, they'd end up settling around $8,000 - 9,000 with a buyer.

You also have to take into account the risk and the ammont of money that has to go in to get them sale ready.

 

[evil wasabi]

Hello Sp00/\/, long time listener first time caller, uhhhh hmmm why do you never post anymore

Maybe people don't want to talk directly to you about personal stuff, because you're a weird person.

 

[madman]

You also have to take into account the risk and the ammont of money that has to go in to get them sale ready.

Cost of the lot, cost of operating a dealership, cost of salespeople, cost of the guys who cleaned the car, etc. I think it's no secret that buying from a dealer will always be more expensive than a private sale. However, I find a $6,000 delta a little surprising.

 

[LoneSage]

Maybe people don't want to talk directly to you about personal stuff, because you're a weird person.

damn bruh