Vehicle Purchase New vs Used

Submitted by vinni8989 t3_125bz0f in personalfinance

So I live in Canada, and am needing to get a vehicle. I’m graduating and have a job lined up for a $70k salary with an option for overtime to be included.

I had my car totalled about a year ago and the used market was absurd, and it wasn’t worth buying a car of the same value; most people are asking ridiculous amounts and for the insurance payment I received I’d be downgrading into something less reliable (had an ‘06 Pontiac with 200k km ≈ 120k miles).

Anyways so I decided to hold off on buying a car until I came closer to graduation assuring I’d actually graduate and the used market is still selling bronze as gold here lol. I know I want a larger SUV, I’m also very much on the fence for a truck.

Brand new the rams have a 20% blowout sale on the 1500’s and that’s the one I’m considering and it’d be ≈$50-55k and for any new SUV it’d be ≈$35-40k and the best I’d get from the used market for anything less than 80k miles would be $25k (MAYBE $22k if I talk to a reasonable human) and $35-$40k for used trucks.

I really can’t justify buying a used car and the Ram 1500 seems like the best bang for my buck but I also despise the idea of being on a loan for a vehicle. I also don’t wanna buy a shitbox that is at risk of mechanical work as that’s all I’ve done up to this point with the mechanical work being a burden both for time and money.

#TLDR: tell me if I’m being logical considering a new car from reading the second last paragraph.

#FYI; why a truck? I’m thinking long term, down the road I wanna get a camper and boat. Not sure when but I plan on being being committed to my next vehicle purchase and would like at least one of those two items within the next 5 years

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CT_7 t1_je3otni wrote

Graduate first and don't make any big unnecessary purchases for at least 3 months. Set a budget of expenses and try to live like a poor college kid and see how much cash you can save up. It sounds like you want a lot of toys aka depreciating assets and those should be purchased with as little debt as possible after setting a good foundation of needs like emergency fund, housing, etc.

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vinni8989 OP t1_je3wpe9 wrote

Thanks for the comment, this is really good advice. I’ve never put myself in debt so this is something I’ve been thinking hard about. Of course I really want it but this is a big decision and I’m so hesitant solely because I hate the idea of taking such a big loan on a depreciating asset. I’d even have the same cold feet on a mortgage. Because of my mindset, the toys I wanna buy would be from a “play fund” I plan on having that I’d buy out in cash.

I’d like to ask your further input; I have about $10k in my bank currently and I found a car I’d consider. It’s listed for $19.5k but I really wouldn’t pay more than $16k and I’d be haggling the seller so I’d take a loan less than $10k to purchase it, which is more up my alley for less anxiety on my finances.

I will need a car very shortly, this vehicle was what I was not exactly wanting to go with solely because it’s a 2014, about 170k km and realistically is in my budget but my biggest concern is ending up in a money pit vehicle that costs me both time and money; more emphasis on the time from the burden of having to get it fixed.

With being realistic with my budget for a vehicle, but my concern about being used what kind of feedback do you got for me?

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Celtictussle t1_je3s0wy wrote

You don't need a truck today, stop trying to talk yourself into it.

Buy a car you can afford. Based on the info you gave, you can't afford any of the options listed.

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redilyntoriami t1_je4hwi4 wrote

There is a reason Dodge trucks are cheap, and it's not a good reason.

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TheQuestionableEgg t1_je3nzwt wrote

Don't go SUV or truck tbh. Like why? Yeah I saw the boat and camper mentions. Ideally go for more compact and fuel efficient.

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vinni8989 OP t1_je3ou8h wrote

Thanks for the comment. To go in more depth of why it’s between those two; the space is pretty important. I had a Jeep compass then got the Pontiac G5. I don’t like sitting low on the road, it’s sketchy taking left turns and the amount of times I’ve had a hard time packing the smaller car when I go to the lake or anywhere have made things very inconvenient.

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TheQuestionableEgg t1_je3pd1n wrote

Okay well maybe not compact but there's definitely some good spacious cars that tend to be smaller. In my experience, SUVs are pretty massive with less interior space than a minivan and without as much safety for you or other drivers. This is true about the light truck category in general actually which encompasses SUVs as well. Hatchbacks or station wagons tend to be pretty dang spacious and honestly even sleepable if you really want to.

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BillZZ7777 t1_je4kuxx wrote

Suggest you look at a cheaper, smaller, car and figure out how to put a roof over your head and food on the table first. You don't even know if you're going to like your job yet. Do you have 6 months of living expenses saved up yet? Regarding boat, you talking row boat or something more substantial?

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WingZombie t1_je4t2vy wrote

As others have said, graduate and lock down everything first. I'm not a fan of spending money I don't have yet.

A few things to keep in mind is that the sticker price is not the out the door price on new cars. Dealers are going to hit you with some random fees that will add a few grand to your price tag.

Personally I've owned around 50 vehicles and have never owned a new one. I also haven't financed a vehicle since 2007. I've always said "let someone else take the initial depreciation hit". Vehicle prices are stabilizing and even coming down in some cases. I'd buy used with 20% down just so I immediately had some equity. When you're starting out it's nice to know that you could liquidate your vehicle at any moment and not have to cut the bank a check.

There is a reason that Dodge trucks typically depreciate quicker than the others. Historically they don't hold up as well as the others (power trains are pretty solid but the interior and body don't seem to hold up). That is purely subjectively opinion based and I have no data to support it, vehicles are just a hobby.

Fullsize trucks are expensive and complete overkill for most people. If you're really set on a truck be honest with yourself about what you really want/need and try not to get caught up in the "well if I'm going to this I might as well go bigger". Many SUVs and midsized trucks are as capable capacity wise as full size trucks were 15-20 years ago.

Ok, having vomited all of that. If fuel consumption wasn't a big issue and I wanted the best bang for buck I'd look at 7-8 year old Suburbans, Tahoes and the like. They don't seem to hold their value like trucks do. Most have been used as kid haulers so the power trains haven't been taxes (sometimes the interiors are beat up with mystery stains and Cheerios). They are based on their truck counterparts and have very similar towing and hauling capacity. If you're into the outdoors you can usually sleep in them if you want to as well.

There is some random advice from a random guy in the interwebs

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tangerinee22 t1_je49hxb wrote

I’m financially conservative most of the time. When it comes to vehicles, I get what I want at the start and keep vehicles a looong time. Yes, you’re just starting out, and you do not want to finance a lot….but…you’ll be throwing good money after bad (getting a random car) because in the not too distant future you’re going to want that truck…so get it now. You’ll be happier.

Where I live in the states, lots of Dodge 1500s for sale …2018-2020 with 30k ish miles for $35-38k. Pay $10k and finance the rest for 2-3 years…buy an extended warranty just in case.

Buying a slightly used car saves $$ on taxes and insurance and registration. If your grades are good from college you might save on insurance.

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