When you need to get another car,

[Curmudgeoness]

do you buy new, slightly used, older used, or do you lease?

I am asking this because I have had an ongoing debate on what is the best frugal way to acquire a car, and I am the odd man out on this. But then again, no one else in this debate is what I would ever consider frugal---and one of the participants is a car salesman, so who can believe what he says!!!

So I figured I would poll the real frugals and see if there is a consensus here.

[maddezmom]

1. I've done a mixture of all your options over the past 20+ years

currently have a lease that the ex is taking care of for the next 2 yrs, but after that I'm toying with the idea of slightly used that I can purchase outright so I have no monthly payments and run it into the ground. But I'm not glued to that idea and would love to hear what others have to say as well.

[Curmudgeoness]

12. I was surprised to hear anyone was leasing,

but you are not alone. My opinion of leases were that they were the most expensive way to go. Although I would still probably never do a lease, I will listen to what others have to say about them.

[maddezmom]

18. due to the ex's career we never were in country for more than 2 yrs at a time

for about 12+ years and we could buy insurance in case we had to turn in the car early. It actually worked out best at the time. This time not so much.

[Curmudgeoness]

20. That makes sense. Not having to store a car

while you are out of the country would definitely be a savings.

[Melissa G]

2. I am a low yearly mileage driver.

This matters in my response. The last couple of vehicles I have bought were a couple or 3 years old, but high highway miles, so low cost.

I keep my good cars about 10 years or more. They end up being low mileage by the time I sell them. Total cost with repairs usually less than one thousand a year.

I usually sell them for about $3500 and restart the process with an $8000 car. Thinking about doing it again next year.

[Curmudgeoness]

13. Very reasonable for a low mileage driver.

I can see the value in what you are doing. Too bad I have to drive too many miles for this to work for me. Ah, one day if I can ever retire, I will remember this.

[Ruby the Liberal]

3. I normally buy used, but got burned once.

On this car, I did both - leased new and then purchased it used.

My current car is a 2007. I leased it new and saved about $150 a month from my old car payment, which I put in a separate savings account to save for the next one. When I went to turn in the lease, I only had ~15,000 miles on it total (lease was for ~18,000 a year) and the dealer had 2007 models on their used lot selling for ~$27,000 with 3-4 times the mileage. I was able to buy out the lease for $18,000 and now the car is mine - and at ~$10,000 less than a used one of the same year model would have cost off the lot. Add to that the fact that it hadn't gone to auction and I *knew* its history without having to rely on carfax.

So - just shared those numbers to show that it all depends on how you use it. If I had high miles, it wouldn't have been as good a deal, I would have had to pay penalties on the lease return and still would have been in the market for a used car.

It pays to run the numbers on both the front end and the back before making a decision, and whatever you do, don't let the dealership "help" you with that. Plenty of sites out there that you can use to enter prices, lease terms, payout and usage to get you a solid number(s) to work with.

[Curmudgeoness]

14. This is a great suggestion to run the numbers

using websites. I definitely agree that the dealership will not be very helpful in my interest.

[MADem]

4. My car is 25 years old.

I have had other cars, but this is one I've owned since it was new, and it is the only car I have now. It is fairly low mileage, doesn't have any major problems (or bells and whistles, either) and it is good on gas.

If I had to replace it (and I'm going to ride it into the ground if I can), I'd buy a used car--not TOO old, but not too new either. I'd try to find one that was owned by a geezer like me who doesn't drive too much but who maintains their car reasonably well!

[RKP5637]

7. Yep, same here!!! n/t

[Curmudgeoness]

15. Wow, I think you win the frugal award for this.

Driving a car for 25 years is definitely commendable. I thought that I did well with having a car for 10-15 years!

At this point in my life, I need a reliable car, and I don't know if this would work for me anymore. But I love it.

[MADem]

45. Well, I had more than one car for awhile--different uses, different needs.

I always tried to use the least gas to get the job done, which is why I had more than one.

Now, I'm down to one, and if I have the odd need for something bigger, I'll just rent it or persuade a relative with the right conveyance to lend a hand!

I just got the old car painted--it's starting to look like a classic; nothing on the road has those funky eighties lines anymore! It's a subcompact, and gets outstanding mileage; so I plan on driving it into the ground.

[Curmudgeoness]

47. You and I came to the same conclusion

about having more than one car. Since I have always absolutely needed a car to get to work, I used to have two cars. If one was out of commission, I was not in a bind (I live alone, have always had a commute, and have rarely had coworkers who lived close).

Then I started to think of all the money going to insurance and vehicles and upkeep for both cars, and realized that in the odd case that my car was not available, I could rent a car for a lot less than owning that second vehicle. Duh. Sometimes I am not thinking things through. But I got that figured out now.

[Kolesar]

46. Introducing "The Fruggies" ... eom

[Phentex]

5. New or slightly used...

with so many car dealerships here, you can get a great deal on a car that was used as a loaner or the test drive. I bought new using a discount service and drove that car into the ground (around 13 years). I will drive the current one until either of us dies.

I'm not sure how a lease is really frugal because a lease ends before the life of the car usually.

For me, the most important things are to have financing taken care of ahead of time (including what it will cost to insure and maintain the tag), sticking to your budget, knowing the cost of any add-ons, and being ruthless when it comes to the haggle. I have considered a job as a professional car buying haggler.

[Curmudgeoness]

16. I would just love to have a professional haggler in my corner.

I hate the "car buying experience", which is more like entering the mouth of hell to me.

I also expected that no one here would have leased a car. Not only does the lease end before the life of the car ends, but in the end, you have nothing to show for it---you will still have payments on either another lease or a car purchase.

I always have had financing ahead of time, but have only one time used it. Usually, the dealers have better terms (including a few times with 0%) than the financing that I had arranged. But you can never be too careful.

[RKP5637]

6. I've had old and new. Some cars I've had 20 years old in pretty much mint condition. My cars

now are over 10 years and in exceptionally good condition. I prefer to buy quality used cars that have had good care. I gauge which cars are of interest by their reliability reports. It also depends on how much mileage one puts on a car.

I don't drive as much now as I once did commuting a long distance. If I were still doing that I would buy a new car with high gas mileage and a good reliability report.

All in all, I keep my cars in good condition, some maintenance here and there prevents, often, large problems down the road. I also do some of the maintenance myself and also have a very good independent mechanic I visit from time to time.

One of my cars is a cream puff Lincoln. It's amazing one can buy a really quality car at a fraction of the cost new.

[Curmudgeoness]

17. Buying new is what I have always done in the past, because of long commutes.

Well, that and the problem with my determining a "quality" used car that has been taken care of. On a personal level, I have only gotten rid of one car before it was a piece of crap, and that was because it was a lemon. I always worry that this is the reason someone else has gotten rid of the car that is used. I know, I know, other people do not think like me....but I always wonder.

[Starboard Tack]

8. From a frugal point of view, definitely used.

Whether slightly used or older would depend on two things - condition and energy efficiency (gas mileage).
Other factors obviously include your location, how the vehicle will be used etc.
Any car that has been well maintained, doesn't consume oil and has clean transmission fluid should last at least another 5 years or 60,000 miles, whichever is longest, without major mechanical work.
Depending on usage, I would also choose the most energy efficient. Electric or hybrid would be my first choices. If they are beyond your budget, then I'd be looking at Japanese or Korean made.
If you want to buy new, get a Prius. You won't regret it. They also hold their value, but that doesn't matter, because you'll want to keep it.

[Curmudgeoness]

10. I agree that used is definitely more frugal.

But I have never bought a used car before. I have no idea about cars and don't have any way of knowing if a car is a great buy or a car in poor condition that I will regret. So far, I have always bought new but sense this is not the best way to go. I drive over 50 miles a day in my commute and need dependable, but I do drive the car for years---meaning that I only have payments for a few years, then it is all just maintainence cost.

With the miles I drive, totally electric is not possible (yet). Hybrids are pricey but I like the idea, and almost did buy a Prius the last time I got a car---but when I found out that the fuel mileage savings were best in city driving and about the same as other cars in highway driving, and I do almost all highway driving, the numbers did not add up.

[Ruby the Liberal]

11. Most mechanics will inspect a prepurchase for a fee.

Just tell the dealership where you are taking it and that it will be gone for X hours.

[Starboard Tack]

23. About the Prius

I have a 2005 Prius with 60+k miles on it. Never had a problem. Only things I've needed to change is oil and wiper blades. Fuel consumption depends how fast you drive. If your commute is all freeway/interstate, then you are probably cruising at 70mph, which will get you around 43-45 mpg. If you drive backroads at 45-55mph you should get 60+. I once averaged 65mph driving backroads from coastal Maine to Rochester, NY, via New Hampshire, Vermont and the Adirondacks.
My daughter has our old Prius, which is a 2002 with close 100k. She, also, has had no problems. Blue book is less than $7,000.
In terms of electric, 50 miles a day is not much, especially if you can recharge at both ends. They usually get 100+ miles to a charge and are definitely the most economical.

[Curmudgeoness]

26. Mine is almost all highway with little slowdown

so the highway mileage is what matters to me. Your mileage is much better than the EPA stickers on the cars show. And when I bought my last car, it just did not seem worth it to get about 8 more miles to a gallon for the price of the Prius. I was really expecting it to be much better, and keep thinking that soon we will have a car with really good mileage.

I could never have an electric only car. I doubt there is a way to recharge at work, and I would never be able to take that much needed vacation to get away from it all in a car with limited distance. But the Volt sounds promising....one day.

[Starboard Tack]

28. Consider renting for vacations

What are you driving at present?

[Curmudgeoness]

31. I have a Toyota Matrix now.

It was bought new and is a great car. No problems with it and the mpg is not bad for the price of the car---I get about 32 mpg.

I have always bought new, but I am sure it would be better to buy slightly used if I had the confidence in the car. But since I keep cars for long times---usually about 10 years---the depreciation right off the lot is not usually a factor.

[Starboard Tack]

33. A new Prius costs about $5,000 more than a new Matrix

A Prius would save you about $500-$600 a year based on your commute and gas price of $3.50/gal. So, if gas prices stay the same, you come out ahead in 8-10 years. If they go up, which I think highly likely, you come out ahead much sooner. Think about gas prices 5 and 10 years ago. In 2001 average price for regular was about $1.70/gal. In 2006 it was $2.20/gal. Today it's about $3.30/gal. An annual average increase of about 10%

So, we may conclude that in 5 years it could well be at least $4.50/gal. Where I live, believe it or not, regular costs $6.50/gal today.

A new Prius lists at $23,500. If that exceeds your budget, you can find a used one.

[Curmudgeoness]

34. I suppose that there may be used Prius's out there now.

When I got my Matrix, I looked at the Prius. It was priced over $10,000 more then, and there really were not used ones out there. This is a good thing to consider next time. And even a new one must have had a price decrease if I remember the list price at that time.

And you are right that gas prices will more than likely continue upward. But I have been around to see great fluxuations, both up and down, so you never know...although it should have been down a lot in the past year, and we have not seen that.

Thanks for the info to think about.

On edit, where are you that the gas prices are so high?

[Starboard Tack]

35. We're on Catalina island off southern California

Mainland prices in California are around $3.80
The good thing is, we consume less than 2 gallons/month on average.

[Curmudgeoness]

37. I always thought that there were no autos on Catalina.

I am either thinking of someplace else, or things have changed.

Thanks for that link.

[Starboard Tack]

38. There are autos. Not many and we don't have one here.

We keep the Prius on the mainland. Use the gasoline for the outboard motor on the dinghy.

[Starboard Tack]

36. Check this link for used Prius prices

http://www.carmax.com/enus/search-results/default.html?Ep=semlandingpage&ADc=90&ANa=4294967007

[Kolesar]

52. 8-10 years to "break even" is a bad financial gambit

10 years is about when my cars are depleted. There is a chance that the car will be wrecked, stolen, or obsoleted due to the owner's changing needs in less than 8-10 years. A Prius will need a battery someday, too and those are not cheap.

My compact car cost less than a Matrix and gets slightly better fuel economy (33mpg minimum). The break even point would have been $8000 cheaper/$600/year -> 13 years. And that's presuming a Prius driver gets 66 mpg. A fastidious motorist would get 50 to 57 mpg http://ecomodder.com/forum/em-fuel-log.php?vehicleid=2828

The EPA rating for the 2004 Prius is 46mpg, only 40% better than my car
$8000 cheaper/$480/year -> 17 years

If the price of gas goes up, it goes up for hybrid owners, too.

Buy a Chevrolet Cruze Eco, rated 42 mpg highway. Owners are getting above 40 mpg and it lists for $19,200. $4300 cheaper than your Prius citation and I am sure if I was the owner I would come out ahead financially with a car that consumes $1000 in gas per year. The hybrid might make sense for somebody who had to drive a huge amount of miles per year, though.

[Starboard Tack]

53. Regarding the battery on the Prius

I still haven't heard of anyone needing to replace the battery. My daughter has our old Prius which is now 10 years old and is running the same as it ever did. Great city car, as the gas engine doesn't kick in below 20mph. But the perfect car is not out there yet.

[bahrbearian]

9. I buy 10 year old used, with low miles,, preferably owned but little old ladies

[Curmudgeoness]

19. Bwahahah, you might be disappointed to know

some of us little old ladies are not as gentle on cars as you might think!

So, do you know how to repair your own car, or do you not have to worry about driving much? Or are these cars you find reliable without a lot of effort?

[bahrbearian]

25. I used to repair all my cars, but now days, being a fat old man, I leave it to the youngsters

I take a lot of grief from my freinds because I drive Plymouth Mini vans now, They are a great vehicle, some get 24 mpg, need little maintance , have lots of room.
Upon edit if the vehicle has a couple AAA stickers on it , the owner was very responsible.

[dixiegrrrrl]

21. I buy used, always.

Preferably 5 years used, in good condition, with low miles.
That means they are affordable,insurance is cheap, they have low mileage, but past the depreciation shock.
Then I maintain them with a good mechanic, faithfully change oil every 5,000 miles
( 3,000 if driving heavy miles every day, which I don't);
Got my money's worth 3x over, never had major repair bills on any car.
Figure with gas, insurance, maintenance I have spent 1,000 to 1,500 a year for trans.

Since 1979 I have had 3 cars, they all lasted a long long time, my current car is a 1993 5 speed toyota coupe,
I bought it in 1995, it still runs great.
I have never had much long long commute schedules, tho, or did real hard driving.

Now that computer's are available, looking up car reviews, car prices, picking out a car and then waiting a few years to buy it used is very do-able.

[Curmudgeoness]

22. You are right, the computer is great

for research on everything, and cars are no exception. I wish in my whole life I would have had so much information available at my fingertips.

Yes, at 5 years old, the car would be past the depreciation problems, and would be quite affordable. But do you end up with a lot of repair costs in the life of the car? How do you find out that the car is in good shape prior to buying it?

[Starboard Tack]

24. Always have an independent mechanic look it over before buying.

Then figure out how much you need to put into it beside the purchase price. Tires, brakes etc.

[dixiegrrrrl]

27. I had a mechanic lined up to look at it before I bought it/them.

A five year old car with low mileage is not going to have anything seriously wrong,
the mechanic made sure the engine was not blown, that the car had not been repainted to cover a collision, etc.
I just run it past a trusted mechanic/friend, and to a large extent trusted my gut. ( I have a goood gut).
So other than maintenance of oil, etc. I have only had things like brake replacement, wheel bearings,
and in the case of the 4 cylinder Toyota, had to have a rebuilt A/C put in for 900.00 down here, in 2005.
In a 10 year old car, that is a great price, much cheaper than buying another car.

In the case of one car, I bought it from a version of Craigslist, turned out the guy had ended up with an excellent older car thru a family member. Had all the paperwork, was in tip top shape, it ran for 12 years for me, until I hit a deer with it.
But, again, I say, I was buying a car that was NOT going to be used commuting on freeways in hot weather all the time. So I don't run them into the ground, and now, as I am retired, I drive hardly at all except around town.

[Sherman A1]

29. Really depends on your needs

My last purchase was an 08 Yaris as a commuter car 50 miles round trip every day across town. My goal at the time was the very best mpg I could find (and a car I could afford). I did about a year of research (online & visited the Auto Show) and settled on the Yaris. I wanted to buy American, but at the time the mpg wasn't as high on those cars in the price range I could afford. Comfort wasn't a huge issue (one can put up with anything for 30-45 minutes at a time), nor was cargo capacity, I wanted a/c, prefer automatic (so the spouse could drive the car) and a radio.

I got everything I wanted plus 39- 41 mpg which was better than advertised. I use about $20 - $25.00 per week in gas so considering the improvement in mileage over my 98 Ranger, the car will pay for itself eventually.

[Curmudgeoness]

30. So this was a new car purchase, I assume?

That is the mileage I have to drive daily too, and I am impressed with the mpg you are getting.

Regarding the American car vs foreign car, I quit using that as a factor when I bought an "American" car and realized after the purchase that it was made in Mexico. After that, I decided to give up on it---well that, and some problems that I should never have seen in a car, like brakes that needed replaced every year, a hood latch that wouldn't work, etc. But I do wish that I could support American manufacturers....I just will not take an inferior product to do it.

[Sherman A1]

32. Yes, it was a new car purchase.

I am of the mindset to buy a new car (enjoy the new car smell for as long as it lasts) and drive them for as long as possible, which is generally 8+ years. My Wife's car is a bit more of a style decision and it is the vacation car so it's a bit larger for our 2 week excursion road trips. I did hang onto my 98 Ranger (now semi-retired) for times when a truck is handy to have. I drive it around the neighborhood on days off doing errands, such as trips to the local recycle center and frankly it's nice to have the spare vehicle when one has a hiccup or when we have my family visit for a few days.

I know what you mean about foreign built "American" vehicles as the Ranger has more than a few parts from different parts of the world.

[Kolesar]

39. I buy new cars and drive them ten years

I calculated the operating costs for new cars vs. used cars and the used car barely came out ahead. Factor in the inconvenience of late life maintenance: transmission service, brake service, ball joints, fuel filter. Factor in the "risk" of the car breaking down and needing another car for awhile. Factor in the new car warranty.

I bought my last car for $15,000, tax and title*. If I had purchased a used car, I would have had a seven year old car that would be enduring all that service I mentioned.

I like the color I picked, too.

I would expect that if you drove less than 9000 miles/year, then a used car would make sense.

[Curmudgeoness]

42. This is what I have done in the past as well.

Although I have never really studied the cost comparisons. And I have to agree that if you drive fewer miles, used is the way to go. I have been told that if you drive a car at least 8 years, the depreciation that you have initially from driving it off the lot is not a factor. But what do I know? That is why I am interested in what others think about this.

[hunter]

40. I hope that never happens to me.

I bought a new car once. What can I say? I was young and foolish and thought I was going places.

I won't make that mistake again.

[Curmudgeoness]

41. Why do you suggest that it was a mistake?

Just curious.

[hunter]

43. Car payments were a serious hardship.

Soon after I bought my first and last new car my wife was accepted to her dream graduate school, out of state.

The jump from both of us having good paying jobs to her being a student and me getting a job there that payed much less, was brutal.

We couldn't give up my car, but we couldn't pay for it either.

Then the medical problems that have been dogging my wife and I ever since first bit. I'm over 50 now and have never enjoyed a stable financial situation. I don't expect I ever will, not until we have a single payer national health care plan, or I qualify for medicare.

We still drive the car my wife had when we were married, vintage 1984... Our second car is just as old, with a salvage title. The "family" car (our kids are in college and drive too...) is a 1998 model.

I'm good enough as a shade-tree mechanic that I'd never consider a new car. That part of "The American Dream" passed me by, and I now reject it.

I hate cars, all cars, and the cars we own know it and punish me by bloodying my knuckles and lasting forever.

[Curmudgeoness]

44. Yes, new car payments can take a toll.

I hate to say you are lucky, with all the problems you have had, but knowing how to do the work on the cars yourself is a definite advantage for someone keeping older cars. Me, I can change a flat tire....but if it is anything else, I can only stand and look under the hood, baffled.

I suppose I am lucky to be able to pay for a new car if that is what I choose to get. Since my first car, I made the car payments, then when the car was paid for, I set up a savings account and continued to pay the same amount in payments to myself. Since the first car I bought was with me for 15 years, I had enough to not have to have a car payment if I didn't want to. My reasoning for saving the car payments was that I was already used to living on the money I had without that extra money, so it didn't hurt. There were only a few years when I was unable to pay myself into savings---those were bad years and I am sorry you have had so many of them.

[kristopher]

48. I (nearly) always buy a 2 year old vehicle with <24000 miles.

I shop around 2-3 weeks looking at *new* cars to see what is available that suits my needs. I negotiate a couple of deals to get a feel for how financing is going and how business is for the dealers. For example, I've long known that dealers always finance their inventory and I'd become accustomed to them being motivated by the wish to save money on interest. Therefore I would look for used cars they'd had in stock for a while. When we bought last year, however, that wasn't true because the interest rates were so low the dealers that it simply didn't matter to them. I found that out while talking to a new car salesman about how business was for him.

If you can get a wholesale book it is good to study it to get an idea of how much a car depreciates with time and miles. For me the best spot is as I wrote above - a lot of 2 year old cars from a rental fleets will depreciate about 40-50% and have less than 24000 miles, meaning they have at least 1 year and 12000 miles of factory warranty left. I never buy a dealer warranty.

after I find a specific model, I go out in the evening and scour the lots of reputable dealers looking for what they have that matches the model and condition. I don't worry about color or options very much since that limits the choices far too much.

After I locate at least 3 I go to kelly blue book (kbb.com) and pull up "dealer trade in" for that vehicle. Any car with that many miles is never rated at the highest condition rating so I use the next highest as my benchmark.

Once I have the approximate number I think the dealer *should* have paid for the auto, I go talk to the sales people.

I drive the vehicles at least 20 miles.

If it is their brand of product (chevy at at chevy store etc) I get them to run report on the maintenance history of the auto.

I push them to offer a discount. When they make their opening offer I counter with the wholesale value plus $400 or so. If they take it I buy the vehicle, but I usually leave at that point even though I'm willing to go to $1000 over wholesale. Once I've visited and driven all 3 vehicles then I call back on the one I liked best and ask to come in for a sit down. In person with a checkbook in front of me I offer an additional $200. We usually close the deal around $800 over the wholesale number.

If not, go to the other dealers.

It is a lot of work, but if I drive them until I don't feel confident in their reliability anymore (130000-150000 miles) I feel I get the most value for my money in the long run.

Finally, I always have (3 or 4 year) financing arranged at a credit union. If the dealer can do a better rate, fine. But I go in knowing the maximum payment for the amount I'm willing to spend.

Summary:
Wholesale + $1000 max
Only manufacturer's warranty
No dealer financing above credit union rates (and no insurance of any kind from dealer)

[Curmudgeoness]

49. Excellent. You do everything that I think we all should do,

but don't. That is a lot of work, but I have no doubt that you get the best bang for your buck. And I suppose that with the number of miles you drive the car after you buy it, you don't have to do this often.

Question---is "dealer trade in" the same as "wholesale"? I don't know if you are using this interchangeably or if they are two different numbers.

Also----what is the significance of driving the car at least 20 miles? Do you make sure to drive on all different roads (highway, congested, back road)? And do you have a problem with the sales person letting you drive that far?

I will agree that you cannot fall in love with a car, you have to be willing to walk away if the deal is not there.

Thanks for all the info. Great advice.

[kristopher]

50. 20 miles

Just my opinion, but 20 miles or so gives me a chance to let the nuances of the car sink in. Some have rattles, road noise or wind noise that others of the same model will not have. Different roads are good, as is making both left hand and right hand turns.

I usually just say I want to take it to show to Mrs. Kris and I've never had a salesperson object. In fact, they usually start salivating...

"dealer trade in" is specific to kelly blue book's website. It seems to be based on wholesale and is usually about $3000 under a dealer's asking price.

[Curmudgeoness]

51. Thanks for all the great advice. :) nt