A tale of two cars - a sweet spot of buying used

[Sclass]

So my lady friend has asked me for a new car. Her present car is a 1999 Honda Accord 4 cyl. It has 110K miles on it now. Given that I drive a 32 yo car with 250K on it I was sulking around for the day. It sounded silly considering I have excellent mechanical skills and can keep cars running longer than my neighbors want to look at them.

A Honda 4 cyl vtec common to 1999 Civics and Accords can easily run to 200k with abuse and over 300k if babied. The seat fabric, plastics, paint etc will look awful on the way though. Our Accord is a little scratched up but I had it resprayed and the seats aren't all that bad at 110k. Anyhow I was thinking, it's a reliable car, what's not to like?

So I'm visiting an old pal who works for Toyota and he's been telling me to get her a Camry. On his suggestion I started searching Craigslist for a 2008 which had some advantages over older ones.

I found a lot of 2008 Camrys that had 140K on them. Six year commuters. They'd cost about $7000. Now why the heck should I buy a newer car with more miles? My SO is getting vain on me. So I dig around to find one with less miles and I find one with 80k for $10000. Cars get used.

So I'm frustrated and start looking at 2011 Camrys. I see one with 20K for $16000.

If my friend insists on tossing out this car at 110k like her Accord here is what I'm paying.

Car 1: $10000/(110k-80k) = $0.33 / mile
Car 2: $16000/(110k-20k) = $0.18 / mile
I think new the car will run me $24,000 for 110K SO throw out = $0.22/mile

Dang I say. So I have a sweet spot in my system. Somehow I'm catching the rapid depreciation on the second car without getting the miles piled on before it ages too much like the first car. It was a little counter intuitive to me because I drive such old beaters myself, older is usually cheaper. But somehow given my wicked constraints I'm better off going upmarket a bit. I know I know she's crazy! But so am I driving my beaters thinking I look cool. I assume resale value on the 2008 and 2011 will be about the same if I keep them as long as we kept the 99 Accord.

Solving the two body problem. Just a fun calculation for the night. Goodnight!

[Alcibar]

What make and model car do you drive - just curious.

Buying 3 yr old used is a great strategy, especially for higher end cars which loose value quickly. Car talk guys view the cheapest ownership strategy is buying 9 yr old and selling after 1 yr often for the same price. They recognize this as a pain and their second favorite strategy is buy at 3 yr and sell at 10 yr.

Make sure your lady friend likes driving a Camry. They have a much different "feel" than a Camry. I personally find the Camry /Lexus too floaty.

[Sclass]

I drive a 1982 Mercedes 300sd and a 1982 240d. They have 250k and 350k miles on them respectively. Bought them very cheap and I beat them regularly. They just won't die. Love them. Like ERE, slow, deliberate, BIFL, fixable, cheap. The cockroach of cars.

I love the car guys strategy. Wow. What an eye opener. It makes so much sense. If you put 15k miles on a nine year old car in a year nobody will notice.

Yeah, Camry's have always been lacking in the road feel and pedal response compared to our accord. But, to my SO, driving is like a big video game. She doesn't care about the subtleties of road feel.

[KevinW]

Couple ideas to consider:

Since you're mechanically inclined, what about buying a salvage totaled Accord with a pristine interior, swapping it in, and parting out the rest? I bet you'd turn a profit on the deal. Or if the seats are the only problem, replace just those.

Hondas and Toyotas are relatively expensive used cars, since it's commonly believed that they last for a very long time. But if your friend plans on disposing of cars before they wear out, cars that are considered more disposable might make more sense. Check out the depreciation curve on something like a Chrysler 200/Sebring, Buick LaCrosse, or Hyundai Azera. Yeah, they may not hold up so well after 100k, but if the plan is to get rid of it around then, who cares?

Also IMO, cars built from around 2000 on are much more durable than 20th century cars, but people haven't adjusted expectations yet. In the past, a 10 year old commuter car was pretty much totally worn out, but due to technological advance, I'd put the horizon out to 15 or 20 years. The 2004-ish cars I see around are still pretty solid.

[dot_com_vet]

Or, if you don't trust yourself to find the sweet spot, just buy new and keep it forever. It has to be sensible new for it to work.

Interesting calculation, you're right. The most expensive car I ever owned was six years old when I bought it. The new car is going to be less expensive. by 50% if I drive it into the ground.

[Sclass]

Kevin,

You are absolutely spot on and rational. That's the problem, I'm constrained by a semi irrational partner. It's cool, things could be worse. She could be demanding a BMW.

There's what I want but that is irrelevant. I would buy a clapped out Toyota Camry (1994 is an outstanding year) and keep it forever. No wait, I'd just keep the Accord. At the rate she puts on miles she will lose her driving privileges before the car.

Dot com vet,

I'm right only given my narrow metric of car cost. I'm just hemmed in by my wonderful partner. There are other ways to look at the cost. If you have good investment skills, you don't want to tie up capital in the good car. You can replace the junky one regularly with a good yield. Also, dumping an Accord at 110k is plain silly as Kevin pointed out. It just defeats the point of buying an Accord. The problem is she hasn't racked up many miles since she got it so she has a dated low mile car. Any ERE person would jump at a car like that.

There are some valid reasons for upgrading like more airbags. Also she won't have to chase me around getting me to fix the little annoying things that have broken...like heater controls, door locks, minor but annoying stuff.

[dot_com_vet]

I've also found a six year old car doesn't fare well if one is racking up 10k - 15k miles/year. Wear items are going to be wearing out constantly.

My spouse's 10 year old car only drives about 3k/year. Other than an oil change and a random annoying thing breaking, it's almost invisible.

[KevinW]

Shortly after DW and I got married we decided to replace our two worn out cars with one shared vehicle satisfying all our combined stipulations. Some of my stipulations seemed dumb to her (e.g. well engineered drivetrain) and some of hers seemed dumb to me (e.g. high seating position) but negotiating over them didn't really work. What worked was to just accept everone's stipulations as hard requirements and find something that checked off all the boxes.

So that's my advice here. Try pin down what specific features she wants as concrete affirmatives, whether it's "has a USB port" or "has knee airbags" or whatever, instead of a nebulous negative like "not old;" then accept those as written and stone and optimize around them. Do you have a feeling what specifically she wants?

[Dragline]

Shortly after DW and I got married we decided to replace our two worn out cars with one shared vehicle satisfying all our combined stipulations. Some of my stipulations seemed dumb to her (e.g. well engineered drivetrain) and some of hers seemed dumb to me (e.g. high seating position) but negotiating over them didn't really work. What worked was to just accept everone's stipulations as hard requirements and find something that checked off all the boxes.

So that's my advice here.

And that's damn good advice! Otherwise every time the vehicle is driven it becomes a source of tension or annoyance for the party who feels they had to "give in".

[Sclass]

Yeah, she wants what she had but newer.

I'm not going to even go into how I lightly step around "negotiating" what she wants and what she needs and how I will decide what will meet her criteria. oh ho ho ho as if i have that kind of control! She basically wants a newish Accord or Camry. The reasons being only semi rational. As I said thank God she didn't say BMW.

No complaints, she picked me. All good things here. And, she insists on getting a several year old one to stick the prior owner with the depreciation. Neither of us seemed to understand how these vehicles pile on miles quickly during those first years thus creating sweet spots in dollars/mile ratios.

Best news is we discussed our misconception in pricing 2008 vs 2011 and she said what's the hurry, give it a year of passive searching till we stumble on the right deal. Ain't love grand?

[Sclass]

Ok, I closed on a 2012 Accord with 20,000 miles on it. $16K with tax, lic, xfer fees. Clean title.

I searched since (OMG just checked my OP) since July on Craigslist in LA and Bay Area CA. Both bad places to get a good price on a commuter car.

Here's what I learned.

1) there are tons of salvaged cars out there. My Pal who works for Toyota says people buy generous Collision insurance and total out their cars. The cars enter a shady market of backyard body shops and resell on CL. Some may actually be good deals. At the end of the day I was wondering if everyone is unnecessarily fearful of these cheap cars. I don't know for sure. I bought clean. I think it's hit and miss.

2). The depreciation curve isnt as steep on and Accord or Camry as it is on a Fusion or Malibu. That means I don't get as good a deal buying nearly new. Another way to look at it is I don't get the new car buyer to eat the early depreciation...I have to eat a larger portion of it.

3) people borrow to buy these things. I walked away from a lot of deals where the car wasn't owned by the seller. "we need to go to my loan shark for the title..."

4) a 50k mile Accord looks an awful lot like a 20k one minus door dings and rock chips. I almost sucked it up and bought an older one but I'd only save a few Gs. I guess other people know this.

5). The market is somewhat efficient. It's hard to find a steal unless there is some special circumstance. To get an acceptable deal I had to buy a car from a professional leaving the country in a couple of weeks. I'm not a proponent of efficiency but on these "known reliable" cars the prices are high.

6) I really don't know if a Ford is less reliable than a Honda for sure. If you buy into the anecdotal talk...that I hear from people who aren't mechanically inclined, you'd think so. I see a lot of Fords at Pick and Pull and not too many Hondas. I see a lot of old Hondas from the 1990s on the road. Theres what I know, and what I feel, and then reality. Fear (something still in the mind but not yet reality) seems to drive the prices of the different makes. Again, I really don't know. I need to ask some Indy mechanics who work on all makes and see what they say. Maybe i should poll tow truck drivers. Phobia drives a lot of this market. My SO suddenly became a car expert and forgot about my mechanical skills when choosing her car. I'm either too dumb or too good to be afraid of anything other than a jaguar.

So I got the car home and it had acid crystals around the positive battery terminal. I neutralized them with baking soda. It kept fizzing and I kept pouring. Finally I got to the connector. It fell off it was so corroded. It was hanging by a thin strand of what was left. It was amazing we got the car home. After fixing the terminal with a clamp on part from Oreilly I looked up the replacement part. The dang battery cable is all integrated with a big harness and you generally change the whole thing at the shop. A $350 part.

Hopefully the car will be as maintenance free as our 99 Accord.