OT: Paying cash for a new car, tips?

[helldriven]

This has been an excellent read! Appreciate all the comments, lots of valuable advice. Time to go shopping.

[.RJ]

Originally Posted by froze

He's already bought the vehicle. But you are correct, it's not a wise decision to buy a new car due to the huge depreciation of around 50% just in the first 4 years of ownership.

We have not seen 50% depreciation on new cars in a very long time.

The first brand new car I bought in 2008, used prices were only a few thousand cheaper than new - somewhat helped by the truck I wanted sitting on the lot for 6 months and had manufacturer discounts. Add in the reduction in interest rate and service cost on new vs used, there was really no difference at all after a few years of ownership.

[CAAD]

I'm in the industry and work with many dealerships. Consumers are SEVERLY upside down at the moment, COVID buyers. People paying over MSRP, little to no money down, dealers packing the deals with products, and crazy long loan terms. Dealers made out the past 4 years, but they are now screwed because all the consumers they ripped off are now stuck with $7k+ negative equity. BUT, the consumers are just as dumb for signing those deals. People paying $7k++ over sticker for a Kia Telluride, yeah they deserve it.

I just picked up a 2.5 years old SUV with 28k on the clock from a franchise Ford store. Was sitting on their lot for over 50 days. I got a hell of a deal and saved myself $15k vs buying the same vehicle new off the lot. After 45 days most dealers want that unit gone. Some will even cut their losses and send them to auction once they approach 60 days.

[Mr. Pink]

Originally Posted by CAAD

I'm in the industry and work with many dealerships. Consumers are SEVERLY upside down at the moment, COVID buyers. People paying over MSRP, little to no money down, dealers packing the deals with products, and crazy long loan terms. Dealers made out the past 4 years, but they are now screwed because all the consumers they ripped off are now stuck with $7k+ negative equity. BUT, the consumers are just as dumb for signing those deals. People paying $7k++ over sticker for a Kia Telluride, yeah they deserve it.

I just picked up a 2.5 years old SUV with 28k on the clock from a franchise Ford store. Was sitting on their lot for over 50 days. I got a hell of a deal and saved myself $15k vs buying the same vehicle new off the lot. After 45 days most dealers want that unit gone. Some will even cut their losses and send them to auction once they approach 60 days.

And I just wish we had used bike dealers who could bait all of those nice Covid bikes out of garages. You know, besides FB marketplace.

[jimcav]

Originally Posted by CAAD

Was sitting on their lot for over 50 days. I got a hell of a deal and saved myself $15k vs buying the same vehicle new off the lot. After 45 days most dealers want that unit gone. Some will even cut their losses and send them to auction once they approach 60 days.

I'm thinking about a different car in 2025. Is there a easy way to tell how long a car is on the lot (vs riding by weekly and looking for the same car(s) of interest)? If you ask, is the salesperson obliged to tell the truth?

I prefer to buy used, but my truck was new but very heavily discounted in 2017. I wanted a used truck, but couldn't find one at any sort of reasonable price in 2017. My Ram 1500 was only 30k new in 2017, and my wife's jeep was new but the prior model year, and also very heavily discounted.

Thanks for the post--good to know that one can negotiate a better deal if the car has been on the lot in that 45-60 day window.

[rice rocket]

Originally Posted by jimcav

I'm thinking about a different car in 2025. Is there a easy way to tell how long a car is on the lot (vs riding by weekly and looking for the same car(s) of interest)? If you ask, is the salesperson obliged to tell the truth?

I prefer to buy used, but my truck was new but very heavily discounted in 2017. I wanted a used truck, but couldn't find one at any sort of reasonable price in 2017. My Ram 1500 was only 30k new in 2017, and my wife's jeep was new but the prior model year, and also very heavily discounted.

Thanks for the post--good to know that one can negotiate a better deal if the car has been on the lot in that 45-60 day window.

Cargurus tracks both price changes and time on lot, assuming dealers are truthfully updating their listings.

[45K10]

Originally Posted by p nut

Congrats on the new car. Just curious, what sort of deal were you able to get? I remember a year ago(?) or so, those RAV4 Prime’s were going 10%+ over MSRP.

We got $4k off the sticker plus the dealer gave us $10k for our '15 Rav 4 that had a little over 100,000 miles on it. We paid cash (around $20K) for it back in '15.
We are happy with the deal! I have seen some used Rav 4 Primes around here listed for more than what we paid for our new one.

[Nomadmax]

Most people who cry about being ripped off in a vehicle deal were too broke to make the deal in the first place. I have absolutely zero sympathy for them.

Originally Posted by CAAD

I'm in the industry and work with many dealerships. Consumers are SEVERLY upside down at the moment, COVID buyers. People paying over MSRP, little to no money down, dealers packing the deals with products, and crazy long loan terms. Dealers made out the past 4 years, but they are now screwed because all the consumers they ripped off are now stuck with $7k+ negative equity. BUT, the consumers are just as dumb for signing those deals. People paying $7k++ over sticker for a Kia Telluride, yeah they deserve it.

I just picked up a 2.5 years old SUV with 28k on the clock from a franchise Ford store. Was sitting on their lot for over 50 days. I got a hell of a deal and saved myself $15k vs buying the same vehicle new off the lot. After 45 days most dealers want that unit gone. Some will even cut their losses and send them to auction once they approach 60 days.

[Mr. Pink]

Originally Posted by Nomadmax

Most people who cry about being ripped off in a vehicle deal were too broke to make the deal in the first place. I have absolutely zero sympathy for them.

I could tell you about a sister in law with severe financial issues brought on by gambling and alcohol and now cardiac issues, who actually replaced a leased Mercedes with another... Mercedes. But, I won't.

Subprime lending moved from housing to autos almost immediately after '08. Easier to repo. Makes foreclosing a home look like climbing a mountain. Most anybody breathing can buy a car.

[Ken Robb]

Originally Posted by 2metalhips

I recently bought a new Toyota Venza, cash, and the dealer required a bank check.

I have had dealers write a cash deal and send me home with the car with no cash down and the balance to be paid with cashier's check the next business day. Another time I put as much on my credit card as the dealer would allow ($5,000) so I got as much cash rebate as I could on my card and then paid the card off before accruing any interest.

[Ken Robb]

Originally Posted by buddybikes

If paying off loans early, are car loans front loaded - pay more interest up front? If so would think taking a loan to pay off quick wouldn't work.

Forgive me, last time I had car loan was 1980s..

Wishy Ryun was nearby (New England) neighbor across st needs car fast, someone totaled his few weeks ago

YEP: The Rule of Sevens, as I recall.

[froze]

Originally Posted by Mr. Pink

I stopped at Alfa Spyder as a toy car. Pretty sure this thread is all about saving money when buying a car. Thanks for proving my point that trillions (no exaggeration) have been spent on cars during my lifetime that could have been spent better elsewhere.

The Alfa is a toy car, but I had to sell off my collection of classics because the friend that I had where I kept my cars at his climate-controlled pole barn died, so all of his cars and mine had to get sold, I didn't have a large enough garage to put even one of them, and be along side one of our regular cars, so the Alfa idea was that it would fit in the garage with the other car and have space to spare.

It snows where I live, and my wife is not real steady on her feet so I wasn't going to park the car she drives outside so I can park one of my classics in the garage, the wife comes first, nor could I leave a classic car outside even if covered with a car cover, all year round, extreme weather is not good for cars period and especially classics. it's bad enough I have to keep my truck outside, but it's a truck and it's not vintage. So that's why I was entertaining the thought of the Alfa. A toy car, yes, but they were fun. But then again I was looking for a toy, so the Lexus SC430 I bought is also a toy!

I spent a lot of money on my classic cars, but, I kept records on each car, those records went with the cars when I sold them, but when I sat down and figured out the money that I spent buying them, keeping them maintained, etc, I came out WAY ahead after the auction was done.

[froze]

Originally Posted by .RJ

We have not seen 50% depreciation on new cars in a very long time.

The first brand new car I bought in 2008, used prices were only a few thousand cheaper than new - somewhat helped by the truck I wanted sitting on the lot for 6 months and had manufacturer discounts. Add in the reduction in interest rate and service cost on new vs used, there was really no difference at all after a few years of ownership.

A long time? Only since Covid have we not seen it, it is now starting to come back again.

I was talking about a car, not a truck, trucks do not depreciate as fast as cars, and Toyota Tundra depreciates the slowest of all the trucks except diesels.

And I was speaking averages, not all depreciate at the same level, but some cars depreciate more than others, but the average is 50%.

And to be more accurate on the average depreciation equation, this is how it breaks down according to the internet:

After a year, your car's value decreases to 81% of the initial value.
After two years, your car's value decreases to 69% of the initial value.
After three years, your car's value decreases to 58% of the initial value.
After four years, your car's value decreases to 49% of the initial value.
After five years, your car's value decreases to 40% of the initial value.

Those depreciation factors are starting up again, they figure that by the end of 2024 or 25 depending on who will be correct, we'll be back to the old ways of depreciation.

[jkbrwn]

Its definitely present in luxury sedans already - particularly electric ones. Mercedes EQS 450s are already available at sub $45k - even in SoCal. That was $120k in 2022. Absolutely insane depreciation.

[froze]

Originally Posted by .RJ

We have not seen 50% depreciation on new cars in a very long time.

The first brand new car I bought in 2008, used prices were only a few thousand cheaper than new - somewhat helped by the truck I wanted sitting on the lot for 6 months and had manufacturer discounts. Add in the reduction in interest rate and service cost on new vs used, there was really no difference at all after a few years of ownership.

What you speak of is all myth and fear.

First off the interest rate on new cars is over 7%.

Secondly, a new car does not guarantee you a perfect running car, in fact cars that break down the most do so during the first 6 months of use, after that the bugs are worked out and all is good for a long time. A new car service record cost is the same as a used car unless you plan on buying a new car before the first oil change is due! My 09 Acura TL Tech with 148,000 miles cost me an average of $349 a year to maintain, it has not needed one repair. My 10 Toyota Tundra 4X4 SR5 has 118,000 miles on it, it has averaged $150 a year to maintain, with no repairs needed (maintenance is low on that one because it doesn't get driven as much as the Acura).

Staying with cars that have a known track record of reliability and long life, like the Toyota/Lexus and Honda/Acura will keep repair costs far away for a long time. Even then most repairs are inexpensive, but you won't get anywhere near the repairs as you would with an American brand, nor will you get expensive repairs, or for that matter expensive maintenance like you will find with German cars.

I have a friend who has an Audi, he needed all 4 brakes done, the cost to have the pads replaced was just over $3,000, the rotors were fine. I looked into buying a BMW Z4, but when I asked I found out the front brakes alone would cost $1,200, that was 3 years ago, prices have gone up since then, so I decided not to tangle myself up with an expensive to maintain car. My Acura so far has only needed the front brakes done in all that time, it cost me $320, so assuming that cost would be the same for the rear, then my total brake job would have cost me $640.

When you look at the fact that I bought the Acura with 43,000 on the odo when it was 5 years old for $14,500, it sold new for $44,000, and have had no repairs in 10 years and over 100,000 miles I'm way ahead of the person buying a new car every 7 years or so thinking they're going to win the game by getting a car that won't need repairs, to think like that is just pure ignorance. Any financial guru will tell you that it is wiser to buy used, and wiser to drive the wheels off the car.