Tell me about your crappy first car!

[kandrathe]

You know it just occurred to me that I've never owned a car that was less than 7 years old...

Ah well some day I might get an actual new car. ...

Unless I can afford to burn money, or they are giving them away cheaper than used, I'll never buy a "new" car again. There are plenty of slightly used cars that you can get for half the cost of a new car.

Looking at a concrete example, this is a popular Ford model getting 23/33 mpg (Kelly Blue Book, 4cyl, sedan, automatic) ;
2010 Ford Fusion SE w/26,500 miles = $16,633 (5 yr cost = $28,795 )
2011 Ford Fusion SE new = $24,686 (5 yr cost = $41,982)
2012 Ford Fusion SE new = $23,212 (5 yr cost = $39,428)

Beyond the $6579 in price, essentially would save yourself the ~$8000 in depreciation, and the $960 difference financing the additional $6579 (est. $3390-$2430). The total cost difference in this example, between new, and one year old is $6579 in the price, plus about $10,633 in cost over 5 years. I can find something else to do with the $17,000 ($3400/year if I had it).

Another way to look at it is a 5 year $/mile, assuming this vehicle will be driven 30,000 miles per year for 5 years, then sold for 1/2 the purchase price. The 2010 model ($28,795 + ($16,633 /2) ) / 150K miles = 24.7 cents per mile, and the 2012 model is 34.0 cents per mile. (edit: I reworked this from a 10 year lifetime model, since I didn't have costs (repairs, etc.) for years 6-10 calculated into the formula. Resale at about 1/2 is reasonable since value becomes more based on utility i.e. usable miles. A spot check on a 2006 Ford Fusion SE w/92K miles shows about $9,600).

Unless the new car had some compelling feature that I absolutely needed, I'd go for the slightly used car at let someone else pay for the first year depreciation, higher insurance rates, and initial new car taxes.