
Car Cost per Year - New vs Used - SQL2219
https://imgur.com/a/fKU8z#pUXtWq0
======
w8rbt
This is really cool to see visually. I buy 15 to 20 year old Toyotas and keep
them for 10 years or until they really break-down. If you can find one that's
been serviced regularly (engine oil, coolant and lub), it'll last a good bit.

I've only had one real lemon using this approach. The previous owner told me
it had over-heated once, but I took a chance anyway. Part of the engine was
warped due to the over-heating. I had to replace the engine after it kept
breaking timing chains. Otherwise, I've been fortunate.

~~~
thenobsta
+1 This is the way to do it. This method is generally safe with other reliable
brands like honda and some nissan's.

~~~
js2
Stuff that breaks on cars this old regardless of brand (speaking as a Honda
owner):

\- timing chain should be replaced at 100K. Should do the water pump at the
same time. $800-$1000.

\- starter motor (typically the brushes wear out). $300.

\- engine mounts.

\- CV joints.

\- suspension bushings, possibly shock absorbers, wheel bearings too.

\- pneumatic door lifts.

Then you just start to run into random problems: dashboard lights go out and
are too expensive to replace, electric windows or door locks start to fail,
steering develops a strange wobble that comes and goes and 3 different
mechanics can't figure out. Etc.

I just sold my 2003 Odyssey (that I had bought new and maintained it well)
with 230K on it. I'm glad to not be dealing with it anymore.

I still own a 98 Cherokee XJ which is built like a tank but still has its
weaknesses. An electric door lock is failing but a replacement part is no
longer made, so I have to find a used replacement or adapt a part from a newer
vehicle. That sort of stuff.

If you're willing to deal with it great, but there's definitely a large
tradeoff there.

There's also safety issues. My new cars have collision detection, lane keep
assist, air bags all the way around, etc. I'm happier having my family in
vehicles with these options.

~~~
gonzo
I drive a 1992 Toyota LandCruiser that has 349,000 miles on it. I do my own
repairs.

It's expensive on gas (12-13mpg), but cheap to insure.

Not even an airbag.

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dorfsmay
We have 4 kids and only one vehicle, so a potential breakdown is a huge
inconvenience. Also my wife is the one doing over 90% of the driving. So here
what has been our strategy:

Buy a brand that is fully guaranteed for 5 years. We sell them at 4 to 5 years
old. This completely kills the repair budget.

Buy vehicles 6 months to 1 year old. That one brand we buy (like most but not
all brands) doesn't depreciate linearly, and depreciate the most the first
year. So this reduce the depreciation budget significantly.

The only difference in the consumable budget, compared to a 10 year old car is
that we pay a lot for insurance (full vs 3rd party only).

The plus of our strategy is that an accident does not change our budgets,
which it would in OP's case, as they might have to increase repair (assuming
3rd p ins) or force them to buy their next vehicle early, throwing out some of
their calculations.

~~~
swombat
What's the one brand you buy?

~~~
Spooky23
Look at the car, not the brand. My 2003 Honda Pilot costs about $500/year in
repair on average. My wife's 2005 Odyessy is about 3x that, despite being
mostly the same car.

Why? The sliding door roller system is garbage and breaks semi-annually.
(@$900/per incident) Biggest issue the Pilot is a poor quality key cylinder
system that was a recall in several 1999-2004 models, but not the Pilot.

~~~
ams6110
You can fix the sliding door rollers with about $5 in parts from the local
hardware store. I did mine and it's lasted for years.

~~~
Spooky23
My car seems to eat the little motors too. Also taking off the door sucks!

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tjoff
"Ignoring identical costs (GAS/TIRES)"

Well, gas consumption surely are not identical between a 10 year old and a new
car. Depending on your usage buying a newer and more expensive car might be
justifiable due to savings in gas prices (you folks in the US might not agree
since gas is so cheap for you).

~~~
pille
Could you give an example? Not saying there isn't one, but I haven't noticed a
major trend of increasing fuel efficiency for a given model over the past 10
years. It looks like the difference would have to offset 2000$/year (so, what
about 20-40 full tanks/yr in the EU?).

Or do you mean there are just more hybrids and electrics available now than
there were 10 years ago?

~~~
adrianN
Average consumption of a new car in Germany has gone down ~30% in the last ten
years:

[https://de.statista.com/statistik/daten/studie/185831/umfrag...](https://de.statista.com/statistik/daten/studie/185831/umfrage/kraftstoffverbrauch-
von-neuzugelassenen-pkw-in-deutschland/)

But it might be more interesting to look for, say, the lower 30 percentile. I
have the feeling that the improvement at the lower end is not as great, but I
don't have numbers to back that up.

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cyanbane
Should note this seems to be for an F-150 (truck) and the data tied to it. In
my experience, F-150s are very reliable although extrapolating that out to all
"cars" may be a bit of a stretch and renders this graph really only useful for
that model.

~~~
jschwartzi
You can probably extrapolate this to any work truck made between 1995 and
1997. You'd be lucky to find a tape deck, power windows, or A/C in any truck
from that period. They're also very simple to work on. My old C1500 from that
period had an engine bay that I could lay down in.

This sort of implies that they wouldn't generate a lot of repairs. Crate
transmissions for m that truck ran about $2000 for a remanufactured one. For
my current truck it's more like $4000.

~~~
ssharp
I have a 98 C2500 and it has all three. I recently replaced the tape deck and
AC. AC compressor replacement took less than an hour to replace on that truck
vs. my 2010 sedan that took several hours for the same job.

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brianwawok
I did this math when I was buying my last car. The things I did different

I kept the end point constant at 10 years. So it was:

* Option 1: Buy a new car, keep 10, and sell

* Option 2: Buy a 3 year old car, keep 7, and sell

* Option 3: Buy a 5 year old car, keep 5, and sell

* Option 4: Buy a 7 year old car, keep 3, and sell

At the time I was shopping, the car I wanted had really high resale. So option
1 was coming out CHEAPER per year than option 2. (new price / 10 compared to
used_price / 7). Options 3 and 4 were cheaper, but not by a ton. But then the
thing I thought about was:

* With option 1, the car I am driving is an average of 5 years old

* with option 3, the car I am driving is an average of 7.5 years old

* With option 4, the car I am driving is an average of 8.5 years old

So that pushed me to go for option 1. No regrets so far, my car just passed
his 7th birthday. Not 100% sure I will sell at 10, but a strong possibility.

I think the simple math of "new car = always bad unless you are rich" is
wrong. "new car every 3 years trading in = always bad", sure. But throw in
dealer incentives and financing, and the new vs used debate can be less black
and white.

~~~
Consultant32452
I bet it's a different story if you calculated opportunity cost and risk. Are
you paying cash for the car in all cases? Or are you getting a loan? Increased
positive cash flow has a real economic value. A loan has real economic risk.
Are you investing the cost difference between option 3 and option 1 to get a
return on that money?

~~~
brianwawok
The funny thing is, options 1 I got 0 APR loan. Option 2 was 5% APR loan.
Options 3 and 4 were cash.

So cash in my pocket, option 1 was the "best". I had no initial outlay, the
car dealer loaned me the money for free.

So yes that is even 1 more reason why option 1 worked out best for MY case.
But who knows when I next get a car what will be true.

~~~
Consultant32452
Car dealers do not loan you money for free. Interest rates _are_ low, but it
costs them money to service that loan. What they did, since the dealership
owns the bank, is they shoved their profit into the principle instead of
getting it back in interest. In other words, they simply charged you more for
the car. And even a 0% loan is a risk from a personal finance standpoint.
Options 3 and 4 carried no risk, lower cash in hand, but higher positive
monthly cash flow (because no monthly bill). This freed up your additional
monthly cash flow which would have been spent on a car payment to be invested
and earn a return.,

~~~
kasey_junk
From the point of view of these calculations it doesn't matter that the
principle included loan servicing or sales commissions or what have you.

The cash flow calculations vs the cash on hand - risk costs are where the math
happens but it is perfectly possible to walk away with the decision to buy new
to work out better on certain models of car.

~~~
Consultant32452
What model of car?

~~~
brianwawok
In my case above it was for the wife, so it was a Honda CRV.

Small Japanese SUVs had a very very high value retention for the first 4-5
years.

Something like maybe the sticker price new is 25k, but what you really pay is
closer to 21k new. A 3 year old would be going for 17-18k. After the maths
above, it ended up costing more per year to buy used.

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juskrey
Now adjust for frustration of sudden issues of an old car. Adjust for the fact
that your car is not an average - pretty high probability of getting a piece
of shit repaired by electric tape and bubble gum.

~~~
blackguardx
Or just but a Honda.

The main problem with used Hondas is that their reliability is priced in so
they cost more than other brands' used cars. Though this helps you a bit when
you try to sell, balancing it out somewhat.

~~~
jnwatson
According to Consumer Reports, Honda quality has dropped off to middle-of-the
pack recently.

~~~
jptman
The CR reliability score I saw recently lumped together the power train
reliability with the entertainment system jankiness. I think this makes it not
as useful The JD powers rating still rates Honda highly.

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brryant
Data says: Buy no car, keep nothing - repeat.

~~~
dmgawel
Surprisingly it's really worth doing (if possible in your case):
[https://medium.com/personal-finance-series-by-richard-
reis/t...](https://medium.com/personal-finance-series-by-richard-reis/the-
ultimate-money-saving-device-a-bike-eee98ab09ca3)

------
cpncrunch
This doesn't really fit with my own experience. I've bought 2 brand new Fords
and kept them for about 6 years each. In sum total I had about $100 of
unscheduled maintenance for both. However older cars always have expensive
maintenance: timing belt, suspension, brakes, and other things all start to
wear out somewhere around the 7-10 year mark (timing belt will depend on
distance).

It also doesn't factor in the 0% financing that Ford has offered for the last
10 years, which is a significant benefit...Ford is essentially paying you
about 5% of the value of the car each year (as you can avoid getting a 5%
loan, or if you have the cash you can invest it in the stock market for a 5%+
return).

~~~
BeetleB
>This doesn't really fit with my own experience. I've bought 2 brand new Fords
and kept them for about 6 years each. In sum total I had about $100 of
unscheduled maintenance for both. However older cars always have expensive
maintenance: timing belt, suspension, brakes, and other things all start to
wear out somewhere around the 7-10 year mark (timing belt will depend on
distance).

So, which option is cheaper?

Isn't that the ultimate question?

In another comment, I showed how a good 8 year old car had depreciated in 6
years (including repairs) as much as a new Forester did in 2 years (no
repairs). Even for the 8 year old car, most of the loss was in depreciation,
not in repairs. Yes, this included:

1\. Change in timing belt + water pump (most expensive)

2\. Changing brakes.

3\. Changing tires.

Everyone seems to want to avoid $200-500 repairs on their car, but few seem to
be concerned about avoiding $10K on the price of the car to begin with.

~~~
cpncrunch
I agree an older car is still cheaper than a new one overall.

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woodpanel
Sounds like an absolute reasonable approach. I would have thought driving them
into the ground would be most effective.

In My experience though, a lot of the car selling business is focused on
producing unreasonable buying decisions.

Cars keep getting more expensive despite most other inflation-basket goods
aren't.

One way of achieving this is by adhering to emotions. See Tesla fans doing
basically "anti-leasing" for the newest model, or the whole genre of SUVs or
better yet even more erratic: SAVs. My favorite in this is the new Range Rover
evoque mini-SUV/convertible: 2 cars in one, each deminishing the usefulness of
the other one. Yet already a success.

~~~
SeeDave
Out of curiosity, would it be possible to explain what a Tesla "anti-lease"
is?

~~~
woodpanel
Of course: IMO Tesla making you pay a deposit in order to being able to pre
order a unreleased car.

This is AFAIK the exact opposite of what the car industry is doing. At least
in the high price range. There, the newest models most of the time are being
sold via lease.

~~~
SeeDave
Interesting perspective on unconventional financing. Thanks for sharing!

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johngalt
The biggest difference is how much car you buy rather than new vs used.
Commonly I see people buying used to 'save money'. But the car they buy to
commute to work is a three row luxury SUV. Much higher cost than a new
hatchback. Still signing 60 month paper at much worse interest rates than new.
Constantly eating up gas, tires and brakes.

'Buying used to save money' in this case is like getting the diet soda to go
with your big mac and fries.

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csours
Author notes that depreciation has the greatest impact, in which case the
F-150 is in a whole different ballpark than most luxury cars; trucks have a
much gentler depreciation curve than luxury cars.

A truck may retain 80% value after 3 years, where a luxury car may retain 50%
or less.

Edit: I should also note that variation between depreciation curves on luxury
cars is also much greater.

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intellix
How about purchasing a car that's only say 1 or 2 years old? I read that cars
drop massively in value as soon as you drive out of the showroom because it's
no longer "brand new". Googled it and found this quote: "On average, a new car
will lose as much as 19 percent of its value in its first year of ownership.
That means that your $20,000 new car will be worth about $16,200 after just
one year."

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unstatusthequo
I lease high end German cars. Zero maintenance and zero of my time dealing
with repairs or random "won't start" surprise. What's value or your time and
frustration?

Whether this analysis makes sense depends on your perspective. Also assumes
you are not a car lover. And even in this, the three year lease is not
substantially more than the other options.

It has never made sense to me to keep cars until I can't trust them anymore.

~~~
jnwatson
I'd buy your argument twenty years ago. These days, almost any American or
Japanese car can be reliable for over 10 years

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bane
I grew up in a family that did the "buy used cars keep until the repairs got
too expensive" thing. We spent a tremendous amount of time at mechanics,
paying lots of money for repairs that may not have even been needed, and then
selling or trading in the piles of junk to repeat. I remember many times
waiting for tow trucks by the side of a highway or out in the middle of
nowhere to come tow one of our cars. I made a list one time and I believe my
family has owned at least 20 different vehicles this way.

Thus conditioned, the idea to me of buying a used anything and keeping it for
10 years sounds like a recipe for answering the Ship of Theseus thought
experiment.

When I first struck out on my own, I had a used, but good condition Toyota
that a year later had $3500 worth of engine trouble that ended up costing me a
job. I finally swore never again.

After that Toyota, I bought a brand new, small, car for $12k with the highest
reliability I could find and kept it for over a decade. It required exactly
one repair to an O2 sensor after 10 years. Being small and commodity,
maintenance was cheap (a set of four new tires ran under $350). One day, 12
years in, the engine conked out and the repair was estimated at $500. The car
was still worth $5k. I made a deal with the mechanic and he bought it for $4k.

Considering that the cost to "buy" the car was about $8k, maintenance was
cheap, and fuel efficiency was high, the car cost pennies per mile to drive
over its life with me.

I've since bought another reasonably priced new car that I fully expect to
drive for another 10-12 years. And my family, after seeing my experience with
proper cars has also cried uncle and now only buys new, reliable, cars. My
father can't believe that he doesn't even know a mechanic anymore, whereas he
used to spend significant time cultivating relationships with "good" mechanics
to deal with repairs. Hundreds of dollars a year used to go into towing fees,
and thousands were lost to lost work or other opportunities when a vehicle was
down and being worked on or to rental fees so we could still get around.

I know that its possible to get a highly reliable used vehicle, but honestly,
its impossible to know what a used car has gone through before it ends up in
your hands.

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matrix
Interesting idea,and I'd love to see this work, but this particular chart
isn't helpful in practice due to huge differences in vehicle depreciation,
repair and insurance costs (e.g. S Class vs Land Cruiser)

Another thing that this chart neglects and which I feel is a very important
consideration, is safety. The difference in safety of a current vehicle with
one from even just 10 years ago is striking (never mind 15 years).

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mnm1
Why do the 5/10 year new car graphs start at 6 and 11 years respectively? Why
does the new 20 year new car graph start at year 1 but with a cost of less
than $10k (for a $35k car)? I'm not sure how to read this graph or what it
says. Are the dots overlapping and hiding one another? Even if so, how am I
not paying at least $35k the first year for a brand new $35k car?

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timbit42
Is it just me or are some of the formulas in the spreadsheet used to generate
this wrong? I don't see the cost of purchasing / financing the used vehicle in
there. Also, in the leasing cost column, the re-lease is not 3 years every
time. Additionally, in the my area, the registration would be much lower but
wouldn't decrease along with the vehicle age.

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flyinglizard
Only if you're not concerned about safety, otherwise buy new to three years
old and replace three years later.

~~~
mattmaroon
Are cars considerably more safe now than they are ten years ago? And will they
be considerably more safe in another ten?

~~~
jaimex2
Yeah, absolutely. 5th Gear covered this extremely well using Volvo, who are
world famous for their safety emphasis.

[https://www.youtube.com/watch?v=emtLLvXrrFs](https://www.youtube.com/watch?v=emtLLvXrrFs)

10 years from now all new car's will probably self driving.

~~~
jzwinck
I will bet against you here and now. In July 2027, I bet at least 5% of new
cars sold in the US will not have full self-driving capability. Meaning they
will be unable to drive between two arbitrary street addresses in the US
without a licensed human operator.

~~~
legolas2412
If you're betting against driving between two arbitrary street addresses, I'll
bet that there won't be a single capable car.

~~~
gefh
Using towns in northern Alaska not connected to the main graph is cheating! :)

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sunstone
If you're going to drive a lot, buying a new prius and driving it for 15 years
is something you should look at. With really low maintenance and gas costs
combined with really long service life (>500k is possible) the cost per driven
mile can be really low.

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MistahKoala
I understand there's something of a bell-curve effect on insurance (in the UK,
at least), whereby the cost of insuring cars of 10+ years of age increases.
I'm curious to know how much of a difference that would make to the total cost
of ownership.

~~~
BeetleB
>whereby the cost of insuring cars of 10+ years of age increases.

Have not seen this. Keep in mind that insurers only care about the cost to
replace the car. If the car's value is so low (which it will be after 10+
years), the cost to insure would be low too.

~~~
MistahKoala
Insurers also care about passenger risk. I assumed it was related to the
safety and reliability profile of the car, as well as the profile of claims
involving older cars (i.e., older cars possibly being involved in more
claims).

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ricardobeat
So you pay a little more than 2x as much to have a car that is 5 years old at
most, vs forever having a 15 years old car. Sounds alright if you have the
income for that.

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everdayimhustln
The used cars section in Consumer Reports is invaluable to avoid white
elephants. Also, take a candidate vehicle to your mechanic before finalizing a
deal.

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dawhizkid
Leasing?

~~~
Consultant32452
[https://www.youtube.com/watch?v=t1NaDucAXIg](https://www.youtube.com/watch?v=t1NaDucAXIg)

Leasing is generally the most expensive option. You're basically getting a
loan for the depreciation + profit. Since it's not technically a loan you
don't get the interest rate disclosed to you. And market research shows the
interest rate you are paying is 14%.

~~~
bshep
I've gotten several leases over the past 10 years, usually at rates 0.9% to
1.9%, maybe I'm lucky?

~~~
Consultant32452
It's a fantasy that you're going to pull one over on the ginormous mega-bank
that does this for a living. I recall a time when many manufacturers were
offering 0% interest on car loans. Obviously they just shoved all their profit
into the principle.

