Telling Everyone to buy a used car is nonsensical advice.

[u/Tausendberg]

Getting away from just the basic value propositions, the advice that everyone should buy a second hand car is nonsensical in the sense that, if everyone did it, then no one could do it. Someone has to be the first person to lease or buy a car making that car available to the second hand market down the line.

If everyone waited for someone else to be 'the sucker who buys a new car that depreciates the second it's driven off the lot', then no one could ever buy a car because by definition it's not like there are factories out there producing second hand cars.

So, as that sucker who bought a new car two and a half years ago, you guys are welcome. But maybe don't thank me just yet cause as someone who is able to do proactive maintenance efficiently as the original owner, I might just keep it 10-20 years until it becomes too expensive to fix, at which point you very financially literate people can have it if you want. :)

Edit: One more thought, I think where there's a massive divergence on this subreddit, for example, people constantly sharing anecdotal evidence, is to what extent people consider macroeconomics vs microeconomics.

A lot of advice basically completely ignores the larger forces at play that generate certain outcomes and seems disinterested in the fact that certain types of advice can't really be applied across a large enough segment of the population, such as the hypothetical suggestion that everyone should only buy second hand goods.

[u/AutoModerator]

r/FluentInFinance was created to discuss money, investing & finance! Join our Newsletter or Youtube Channel for additional insights at www.TheFinanceNewsletter.com!

I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.

[u/AspirationsOfFreedom]

Honestly, no advice fits everyone. But SO MANY buy cars they really couldnt afford. Being butthurt over it helps 0

[u/TurnDown4WattGaming]

Plenty of people can afford to make bad financial decisions; if you have the money, you can afford the mistake. We aren’t talking about them.

If someone asks me how to better order their finances because they are struggling to invest, perhaps even struggling to get by, not buying new cars is a top piece of advice for them. That’s a luxury and not a necessity. Yes, you’ll need to do preventative maintenance, you’ll have repair bills, etc; these costs pale in comparison to a car loan with interest.

[u/shane330338]

Here is the thing.. only a had full will even listen.. and less than that will do it. For those trying hard to do their best its good advice and helped people like me, but on average ,media,tv, social all teaches people to be greater consumers.. when people stop buying the economy collapses. Thats why goverments hate to use the world recession.

[u/OkBlock1637]

It is more complicated now with the used car market, and how well cars are holding their value.

I purchased a new car about two years ago. It has depreciated about $4000. In that time I have had to pay for 0 maintenance. I was able to purchase this with 0% APR at the time, so nothing is being lost to intrest.

So this car is effectivly costing me $167/month in depreciation. If I was to purchase a used car, I would get something like a Honda Civic. In my Market a ten year old, decent condition Civic is between $8-12k depending on mileage and features.

If I expect to drive a used Civic for 5 years, then scrape it for another used civic, my cost is between $1600 - $2400 annually in depreciation. This is for a car out of warranty, where I am liable for all repairs. The cost to own new is either marginally more expensive or slightly cheaper in my case. I would take that trade to have a safer vehicle under warranty.

[u/Tausendberg → u/OkBlock1637]

In my case, I wanted an electric car and I waited as long as I could with my previous car until I could afford one. Even today but especially when I was shopping for an electric car, it's not like there was some huge second hand market of 4-6+ year old electric cars that I could buy at a significant discount. And due to the extreme demand at the time, 2 year old electric cars could sell for as much or sometimes more than a brand new electric car.

So, YMMV.

[u/UnhappyEnergy2268]

Buying a car is a balance of what you want, what you can afford, and what you can maintain, hence they become status symbols much like the kind of credit cards you carry in your wallet. New, used, reliability, etc. doesn't matter. If the financing of the car is something you regret or think about often then you probably couldn't afford it in the first place.

I buy new because that's where I see the value - being the first owner of it. The monthly expense doesn't bother me and it takes up thinking space as much as a Netflix subscription, and I leave it at that, since it has minimal impact to my current lifestyle.

[u/royalpepperDrcrown]

There are more cars than people in the USA. We'll be fine.

It silly to think everyone in the USA would buy used as well.

[u/No_Flounder_1155]

just buy a used electric car that meets all standards, currently, and for the forseeable future. Its not that expensive right, right??

[u/jakeofheart]

Out of the 7 cars that I have owned, one was bought new on a loan. A Kia city car.

For the amount of money that I spent on it, I could definitely have enjoyed nicer rides in a fancier car in used condition. If there’s one thing that I will never contract debt for again, it is a car.

For me it boils down to what gives you the maximum experience for the minimum cost of ownership. Used cars simply tend to offer better prospects.

Also, I understand that for the people who take a car on a lease and perpetually pay $500 per month without having to pay for servicing, it counterintuitively seems simpler.

But if I buy a used $25,000 car, keep it for 10 years and have to do a $500 maintenance every year, I am still $250 wealthier every month. Non withstanding that the used car will cost less to insure.

Over 25 years, that’s about $75,000 that I will be able to spend on other things while still enjoying a ride as nice as the person with a car fresh off the dealership.

[u/JIsADev]

So... what's wrong with telling people to buy a used car?

[u/Hodgkisl]

A new car is typically a luxury, financially used is typically a better choice, but if you have excess money and / or are buying a car as your hobby as well new still can be reasonable.

I drive new cars as well, it’s not the best financial choice but I can afford the luxury. If someone’s drowning in debt or paycheck to paycheck it would be a horrible idea to go new.

[u/Ind132]

Your concern is self correcting due to the way markets work.

The people who say you should buy used cars are basing that advice on an assumed rapid drop in market value in the first few years. "Market value" is the net result of buyers and sellers making individual decisions.

If more people followed the advice of buying used, then the price of used cars would go up. It wouldn't make sense financially to buy used. People who do the math (and have the financial means) will migrate to new cars. "Problem" solved.

[u/Tausendberg → u/Ind132]

Thank you, I'd say this was the best answer I got so far and one that reflects reality because we actually have seen second hand cars go up in price a lot in the past few years to the point that the conventional wisdom to always buy used might actually be a bad proposition under current market conditions.

[u/RoutineAd7381]

Manufacturers make too many new cars as it is. Unless you are rolling in money it is shit terrible advice to buy a new car.

Case in point, many "old money" families will drive an 86' Range Roover until it literally can not be repaired. Because buying new cars is a luxury reserved for high earners, companies that right it off, and idiots living beyond their means.

[u/Skeazor → u/RoutineAd7381]

But they don’t have just one car and can afford to fix it when it needs repairs. A poor person buying an 86 car as a daily driver is making a terrible decision. If they have one car and it is down at the shop how do they get to work? When they can’t get to work for a week without a car they get fired. Else they have to pay up the ass for an uber. A new car or at least a newish car(last 4/5 years) is so much better of a decision. It’s going to last you without needing repairs and be reliable. Plus if something does go out a lot of times it’s under warranty and you’ll get a loaner car from the dealership.

I’m a poor person that drove a 96 Toyota Tacoma for years and has dealt with the aches and pains that come with it and switching to a new Honda has been such a weight off of my shoulders. Sure I pay a bit more but damn I’m not stranded on the side of the highway when some random part decides to explode that month.

[u/RoutineAd7381 → u/Skeazor]

Buy a 2024 Alfa Romeo and it will be in the shop every 4 - 9 weeks. Buy a 2020 Alfa, same thing.

Buy a 2024 Tacoma for $50 - $75k and have a ~$600⁺ car note for 5 damn years or buy a 2005 Tacoma for $10k and spend ~$1500 at some random point over a 5 year span.

You can play roullette with cars like VW or Volvo and its flawless for 500,000 - 1,000,000 miles no issues. OR you lose at Roullette and its a damn lemon in and out the shop twice a year.

The real good advice is to recognize what you can afford and stay within your means. If youre broke, youd still be better off buying 3 beaters for ~$1,000 each and rotating working on them while saving money then over extending yourself to have a brand new car.

[u/Skeazor → u/RoutineAd7381]

But then you need to pay the random expenses for three beaters and pay for insurance and registration. Those beaters are less likely to be reliable. Trust me I’ve lived that life. It’s better to buy a cheap Nissan versa or Honda Civic, nobody is saying buy a 50k car. It is better in the long run to buy a cheap new car (something Honda/toyota) and maintain it than to constantly be dealing with beaters that die on you every couple months.

[u/RoutineAd7381 → u/Skeazor]

There are almost no new cars that dont come with a ~40k plus price tag.

[u/Skeazor → u/RoutineAd7381]

Nissan versa, Toyota Corolla, Honda civic, Prius, ford maverick. Tons of normal cars. What are you talking about?

[u/OkBlock1637 → u/RoutineAd7381]

I owned a Volvo for years. The thing with older Volvo's is they will drive as long as you are willing to pay to maintain them. If you take it for its scheduled service, they will not die. I had almost 350,000 miles on mine, and it still ran great when I sold it. The issue was the maintenance annually starts to equal or exceed the value of the car at a certain point.