Should You Buy a New or Used Car 

After watching this video, i decided to get a horse.

this guy is the best advice since 'one house, one spouse...'...it's the turnover that gets folks. (multi-millionaire that lived off $1/day for food at University). Buy and hold. always 10 years at least.

I don’t remember this scene in Highlander 🤷‍♂️

Depends on how many miles are driven per year. Average new vehicle is driven 15k miles in its first year.

My car is 20 years old, works great, still runs like a brand new, costing me about 1000$ in maintenance per year tho (living up north) but only cost me 130$/year in inssurance. Should I change?

MONO SOUND! Thanks for that

Buy a Lexus at just over 100,000 miles and keep it for 10 years. It was probably serviced at the dealer and well taken care of by the owner.

The chart imply that I will be paying the same of a new brand car each year only on mainteinance after year 10? Something is fishy. I get that you are trying to make it simple to understand but using real scales could prove your point better. In the other side, I believe buying a car is not really a good investment. I prefeer to think that when I buy a car I'm paying for a service and being in the manteinance center because a failure means you are not getting the service you want. That's why I love brand new cars. A good brand should not fail in the first years.

U forgot about crooks rolling odometers and such.

If you can afford new buy new if not used car every time it's really as simple as that no math needed.

What good are graphs without data?

always used car, the age is not too important, the mileage and the car producer and the quality is important

Answer: buy Scotty Kilmer's 1994 Toyota Celica.

What repair costs? My 20 year old Toyota repairs itself.

Except for Toyota and Honda. Buy it at 100,000 Km (60,000 miles) and drive it to 400,000km (240,000 miles) and beyond for minimal cost.

Life after WWE. Thank you Heartbreak Kid

For some reason I want to listen to Michael Bolton after watching this.

Everything in this video makes sense except his hairstyle.

Great advice! Thank you Shawn Michaels.

I totally agree with this however... Always check year end manufacturer rebates and dealership end of year inventory clean out incentives. Ive seen brand new Subarus off the lot go for the same price as a 2 year old sweet spot models with over 30,000 miles.

You knew the answer before you clicked on this video, but you watched it anyway.

I think your repair cost line is a bit deceiving, the repair costs of a 10yr old car likely will not equal the cost of a new car.

Disclaimer: I am not an expert. My comment (below) is an opinion at best. Firstly, the mileage say nothing about vehicle condition. A low mileage vehicle may have been through hell. Secondly, some vehicles are inherently made to develop problems quickly. Example are Volk Wagon & Audi (door knobs & AC problems), Bmw (techno-gig issues). These cars need a technician on stand by at 50,000 mile. Other cars (made by Toyota or Honda) are mostly good to go at 50,000 miles (except some sporty or techno models or some really malhandled cars). I have no personal experience with American cars. This is my opinion. All cars have pros & cons & hidden secrets. Car Model does not matter to car lovers. The handler can be a junky or perhaps a persnickety old car lover. You have to evaluate each vehicle like a potential profitable business deal (new or old car, both have hidden facts - to consider carefully). Yes it's best to buy a car when its market value is not hyped - usually the 2-10 years old models but it's even better to buy a vehicle in the year when the market price history showes stability and to sell it before the market value starts to fall again - unless you are not a big fan of car model, then you can keep your vehicle çar until it becomes a vintage model. Yes it's good to buy a car with a good resale value and to sell it before it market value begins to crash again. Kelly blue book gives a rough guide as to when a vehicle's market price crashes and at what rate. Buy & sell the models with the most stable prices over 5-10 year windows - this will minimize your investment loss. Some cars lose thousands of dollars in the 1st 2 years... others lose market value more gradually. It's a good idea to do market research on the index car before purchase. Cars with low resale value experience most market crash at 1-2 years like Mercedes or Tesla. Cars with high resale value are still expensive at 2 to 4 years of age. Example include Honda Civics & Toyota Corollas. If you wish to buy a car like a benz, the best time is 2 years of age and make sure not to keep the car for longer than 2 years. After 2-4 years, the vehicle has lost its market value by 10s of thousands of dollars. Or you can wait until the year when the market price history for the index car showes stability. Some models will sell horribly but as I said, resale value research on index cars is critical to save money if you wish to keep a newer model or resell the car & protect yourself from depreciation costs or maintenance bills. If you want to buy a toyota or a Honda to keep until scraped, a 7-10 year old certified car, sold by a single careful owner is mostly the best deal for the ticketed price. The car price at this time is usually stable & reasonable. On the other hand, Re-Selling is not always the goal. A good car that is well maintained does not develop maintenance issues. It does not disappoint you anywhere. The problem is that most people slack off in the maintenance aspect of the game. If you want to re-sell a toyota or a honda, buy it at 4-5 years of age, use it for 1-3 years, and then exchange it, upgrade it for another dealer certified 4-5 year old Toyota or Honda. This way you do not lose a lot of money to depreciation or repairs. But honestly speaking, if you are not a car person, a Honda or a Toyota will last longer without major repairs (with some sporty or techno model exceptions). Yes it's a good idea to rent a car for long drives but it is a better idea to save & use the $250 rental for major vehicle maintenance costs. Drive 40 -50 miles and let the car rest like a horse... it's going to love you & live longer than you would expect. Buy a compact sedan instead of a giant megalodon. What's the point of a car? Guzzling gas? Or giving up your savings to insurance companies? Or taking you & your small family safely & comfortably from point A & point B? Instead of turning on the ac in the summer, avoid driving between 11 am & 5 pm... you will save 20% on gas. Avoid a V6 or a V8 non-compact car engine for some extra savings... every dollar adds up in the end. Avoid hard accelerations & hard decelerations... these bad habits generate most of the major maintenance costs - transmisdion, tires, brakes, fuel system cleaning, oil health. Some cars with have a higher insurance bill ab-initio. Some cars will have higher maintenance costs sooner at 4-5 years of age because of rough usage or techno feature malfunction or just inherent durability issue. I agree that most cars for personal use (until scraped) are purchased best at 10 to 12 years of age. Meanwhile, most cars for resale are best purchased at 4-6 years of age and sold off at 8 -10 years if age. The 4-6 year to 8-10 year tine frames are best for ensuring that one does not losing a lot of money in market depreciation. Repair costs??? I don't view these as losses. Maintenance costs extends the life of the vehicle that is running on the road for you. It's money well (invested &) spent. But if you want to eventually sell the car then market depreciation is a factor that you should alway consider. Buy the car when it is 4-5 years old, keep a maintenance log & sell it back to a dealership (or a private buyer) before it is 8-10 years old. Buy car & wheel cover, dont wreck the car paint or rotors in the sun or rain. Don't accelerate or decelerate strongly. Keep the interior protected from kids and pets and odors...Stop smoking in your car - this is a given; maintenance is neccessary to keep the market value of your car. Don't wreck your car if you want to sell it. Do your maintenance regularly. Decide to either sell the car at 8 -10 years or to keep it till it's good for scrape dealers. If you spend $3000 a year on car maintenance every year, save $250 a month for pending costs, I think your car is going to stay new even after your odometer stops working. Buy an old used $ 5000- $7,000 certified Honda or Toyota; make payment full in cash or credit and then save or budget to spend $1500 - 3000 each year on major repairs. Home to office runs does not ruin a car & chances are that this car savings fund will transform your car into a better condition over time, compared to it's condition at purchase. Keep a good mechanic, a good car towing service and emergency road side assistance number. Notice, you are not buying a car for 17,000 or 25,000, you are buying a car for $5000. This gives you a lot of wiggle room spread out over the next 10-15 years. Just tske good care of your vehicle & be wise in your choices of car spendings. Do not buy those spinner wheels or deafening sound system and save for a major repair. Live a modest life and learn to appreciate your old used rickety car. It goes month after month without complaining. Save cash to pay it back for this unconditional love & faithful service. Don't pimp it, save to fix it. Old is gold. Keep your car in health & happy with monthly car maintenance savings. It's going to be reliable, by your side always, & never at the junk yard - your great grandkids will enjoy it as an expensive vintage ride! If you like newer models, just take care of your car, buy it when the market price is stable & sell it before it's market price begins to crash

My left ear enjoyed this

No one has talked about that "new car smell".

The best advice is to learn car maintenance yourself. It's easy just from youtube. Your local car mechanic is not a genius.

The real question is should you or shouldn't you rock a mullet in 2018?

Great video. I have done this for 5 decades and totally agree with your basic idea. From my experience, however, I would suggest that cars are significantly better now and I have moved my replacement time to the 150K range. I actually do not base it on miles. I base it on maintenance costs. I hate buying cars so I replace when maintenance is likely to be more than the car value...one man's opinion.

This is great advice and he' s right. I am on my fourth car and always bought in the "sweet spot". Car #1: 5 years old. 54,000kms drove it for 10 years. Sold it with 225,000kms Car #2: 4 years old. 80,000kms, drove for 1.5 years. Sold it with 110,000kms for only a little bit lower than I paid for . Car #3: 3 years old. 44,000kms, drove for 9 years. Sold it with 313,000kms Car #4 (current): 5 years old. 50,000kms, will keep it for about 6 -8 years depending on repair $$..

why is shawn michaels teaching me about cars?

Now factor in INSURANCE costs!

The cost of knowing you are the only owner and take care of your vehicle from new to EOL. That's a sweetspot of its own.

Well, I drive a 21 year old car. And cant say that I spend much maintaining it.

If it's a Toyota truck the sweet spot runs forever.

For Toyota's the sweet spot extends to 25 years

OK - I used to work as an analyst at the leading car lease company in the UK. I was asked to establish the best time to sell off the company cars. Turned out the best advice I could offer was to NOT buy new cars but buy cars about 2-3 years old, and keep them to about the same time frame as advised here. Same answer. Of course no salesman or manager is going to want a used car, so the advice though economically sound is not viable in the scenario. But for the rest of us it could well be the best advice. Buying an older car (say 6 to 10 years old) with low mileage and good service record is probably the safest and most economical route.

Buying a new car because the repairs are cheaper is ignorant and shows a lack of ability to do math. I am an ASE Master Tech with 33 years of experience. If you want the best deal research and find a vehicle that is dependable and easy to repair. Go ask a mechanic if you need some ideas. I usually buy cars that are 6 to 10 years old. Just this morning I sold my 2003 Chevy Venture. I bought it 3 years ago for $1200 and I sold it with 80k more miles for $1100. Total cost of repairs, not including maintenance, was $752. That's a net of $852 dollars for 3 years or 80k miles depending on how you look at it. That is $23.66 a month. The average car payment in the country right now is about $550 a month which is ludicrous when you consider how badly cars depreciate on average. Buy used, buy what is dependable, buy what makes sense and don't give me that crap about repair costs. Modern cars last for 300k miles or more with proper maintenance except for a few models that you can research and avoid. My van had 165k when I bought it and 245k when I sold it and I used to take my wife and kids on vacation in it and laugh at the people driving Tahoes and Expeditions they paid $65k for, owed $75k on and were worth $35k.

I bought my 2004 Mercedes S Class for about 8.5% of it's original value. Repair cost are high but they'll never reach anywhere near it's original 89,000$ sticker price.

Who cares about the depreciation, car is not am investment, it's a tool you buy to use. If you intend to keep a brand new car until the end, then the depreciation means absolutely nothing to you.

Great advice. I’m a handy guy and can do regular maintenance ; brakes, oil change etc. But there comes a point where strange things start to happen. Most cars loose 40% of their value after 3 to 4 years but are very reliable to 12 to 15 years. So you get 8 years of use at a 60% percent residual value. The real cost is depreciation plus maintenance. And in that sweet spot you have the goldilocks scenario.

This video was true and has always been true, up until the last few years. Now use cars are almost as expensive as new cars, and it doesn't make sense to buy a used one in many cases

No Honda or Toyota car I ever owned broke down before 100K miles. Up to that point I only paid for routine maintenance. My 2 Mazdas I owned both had clutch problems at about 60k miles (one needed a clutch, the other needed a clutch master and slave cylinder) but other than that didn't have any breakdowns until after 100k miles,. In my experience the "sweet spot" is longer. I currently drive a 17 year old car.

Watching in 2021, how things have turned upside down.

If you're paying that much to repair any car you're doing something very wrong.

I always buy used cars and pay for them outright. It's a crapshoot, but I have been pretty lucky.

I just bought a 9 year old car with only 30,000 on the clock. That's what I call a sweet spot

The general concept of a sweet spot is valid, but cars have a wide range of possible curves. The Red line on a Mustang would be much higher at 10 years than a Ford Focus. The Green line on a Honda Accord would be much lower at 10 years than a Fiat. The line I would like to see added to this chart would be a Blue loan Amortization curve, starting exactly where the depreciation curve starts, and curving convex ( ) to the Red depreciation curve, to touch bottom at 6 years, when it would be paid off on a 72 month contract. The reason it would be curved is the interest rate, if it were 0% it would be a line. I agree with your Sweet Spot, keeping in mind, the variables of high/low residual value & good/bad reliability. One of the strangest curves I ever seen in my life, is the value curve of the little Ford Ranger truck, when Ford in it's wisdom (?) decided to stop producing them in 2011. They started going up in value and to this day, you are lucky to find one for sale. That will change if Ford brings it back in 2019.

I know it's you Shawn michaels

For some reason I thought 💭 my left side earphones broke lol 😂

A few years ago, we (wife and I) made it a goal to break the leasing cycle. We saved cash and essentially did what the gentleman is talking about. I recently purchased a used (one owner, garaged, private sale) 2014 bmw x1 with 64k miles for 13.5k, cash. I do my own maintenance as much as I can. It’s a great feeling having no car payment and just maintaining as I go. My wife went with a used 2016 VW tiguan which I had fun negotiating on, for 12.5k. We can afford really expensive cars, but cars are such a poor place to put your money into if you are trying to build wealth.

The cheapest car I have ever owned, I bought for about 400$. Already 23 years old. Drowe it for 6 years without more than 500$ in total repair costs. That was a pretty sweet spot for that car.

The best part of a used car is you don't slit your throat at the slightest scratch

Who else thought it was 'Shawn Michael' looking at the thumbnail?

People buy car for prioritizing different reasons- safety, comfort, prestige, saving tax,etc. Its not about depreciation and maintenance cost lol

I always go for used, but my parents always seem to get new cars. They also do all the customisation and get all these extras like sat nav, heated seats etc.. and spend tons of money. My humble 4 year old Toyota Yaris functions great and haven't needed any repairs so far

DON'T BUY NEW. I'm talking about the more expensive luxury cars/trucks. It's BETTER to buy one that is 1-2 years old. Because of the MASSIVE depreciation on the more expensive new cars.

Good luck on finding a two year old Toyota Tacoma truck for sale at a good price

Have been buying used cars in the south my entire life. Just bought a 05' Lexus ES330 w 38k on odometer for 7grand for keeps in Texas n drove home to Detroit. Just bought a truly like new 03' Monte Carlo w 65k on od for 5k even in Florida for resale in Detroit. Six years ago bought a 03' Astro raised roof conversion in Tuscon for keeps for 5k. My "toy" is a 94 300ZX I bought down south 15 years ago. That's how ya do it

Basically buy what you can afford.

the best is getting a car 2 or 3 years old,(first buyer takes the depreciation hit) but still under the manufacturer's warranty

"Depreciation" and what you can purchase a used car for are two different things. You have to look at the actual price difference between the used and new car of the same make/model. Then look at the mileage on the used car and estimate about what % of it's life is gone. Like if a sedan has 20,000 miles on it, you can estimate it's about 10% through it's life. Therefore, if the price is only 10% less for the used, you're getting a bad deal because of a new car has maintainance, warranty, and feature advantages over a used car. Whenever I shop for used cars, I often find that the price is too high to make it worth it.

foolish- buy a 10 year old car for 1k or less - no repairs just drive until it fails, sell it for scrap, and then buy another.

Firstly, I own and drive a used car so I completely agree with your logic. However, your graph is a bit misleading. In your graph, the green curve of repairs goes as high as the cost of a new car in year 10. I drive a 12 year old Hyundai which isn't nearly as reliable as Hondas and Toyotas of similar vintage and I don't see repair costs nearly as high as that. My repairs are around $125 per month on average in the last 75 months that I have owned the car.

I'm considering a 2002 prius with about 60k miles on it being sold for about $4900 at a dealer. Is this a good idea for an old car like this?

The video graph is very misleading. At the point where the car value-line CROSSES the maintenance line, that is the point where the car is worth more dead than alive: it means the repair costs are HIGHER than the value of the car. That doesn't happen at 5 years, which is where the graph shows the lines crossing each other. That will happen in most cases after year 8-10, and with good cars often not until years 12-15. In addition, the line for value doesnt decline more steeply in years 0-2, as happens in the real world. Overall concept is correct but the details are wrong.

I bought a Honda for 5500 euro (6100 dollar) and drove 430000 km (267000 mile), never had a problem, low maintenance. Never went to a dealer because i know better :-)

Part 2 - I just had my Subaru Outback timing belt go and I wish I saw your video on Interference Engines and Non-Interference ones (Identifying Engines With or Without Timing Changes) ! The Mecahnic told me it was a hit or miss to put a new timing belt on it fir $1400 but he couldn’t guarantee it would work. Well it didn’t work and after all I’ve been reading I’m starting to think that he should actually have known that before he started the job 🤷‍♂️ I’m an old man but I guess you can say I’m still learning till this day ! I’m so thankful to find your site because I’m going to wind up buying another car because he wants another $5,400 bucks to put a motor in it with 120,000 miles on it. The one in it had only 60,000 miles on it and it’s a 2011 ! I just became a Subscriber of yours and I’m going to learn from you how to go about buying another car ! Thanks again !

My dad bought a brand new F-150 Ford pickup truck in 2001. It drove almost 600,000 Kilometers before it ever needed repairs. #FordTough

Bought a used Toyota Corolla with 100k miles for $4k. It's at 200k now with far less in total repair cost than choosing the color red as an extra for a Tesla, which is a $2,000 extra option, just for a color. Freak, $2,000 is 1/2 the cost of my car. You know what's better than buying a new Tesla? Owning 1/2 million $ in Tesla stock.

It really matters how you drive your car. I bought a car new in 2005. I have barely spent any money on repair. My grandpa's cars lasted 20 plus years with little repair costs. Just tires, battery, and stuff like that. I run a business that uses 5 ton trucks. I promise you that the largest factor is how you drive. If you are a very good driver you want to buy new always. Either that, or buy used from a good driver. That is the sweet spot imo.

Used car dealerships are being ripoff artists than new car dealerships

I drive a 2006 Highlander with 215, and a 2006 Lexus RX with 185 - both hybrids. Despite being 17 yrs old the Lexus still looks, drives and passes for a new car. Paid cash for both, Highlander @123 mi, the Lexus at 58; have owned each 10+ yrs, have maintained both well. As a financial advisor, I counsel my clients to buy the car you can afford (with cash), that is 3 yrs old and under 60K miles...and make it Toyota or Honda. Don't buy a "car", buy transportation at an affordable cost and remember that JP Morgan said..."If it goes DOWN in value, pay cash...if it goes UP in value...leverage it" (borrow). From a financial perspective the absolute WORST deal you can make is a NEW Escalade, (worst depreciation record and frequently stolen and high insurance costs) with 20% down on a 60 month note. Total all-in costs = 120 and seven years later it's worth 30. There's a reason why you see luxury cars in poor neighborhoods.

Meh, I usually just buy new and drive them 15+ years. I've never taken longer than 3 years to pay off an auto loan.

Beyond a certain point, repair cost plateaus. My 1991 Honda Civic hatchback costs about $500 for repairs every year for items such as: tires, brake pads, battery, cooling system flush. It's reliable, and still gets 40 mpg. This works if you don't mind the hassle of periodically replacing parts that inevitably wear out over time.

Part 1 - Hi Greg ! Thank you so much for what I would call your outstanding educational videos ! You could actually be an Instructor for any subject with your Special Talent of teaching while getting people’s utmost full attentionI and helping them fully understand what they are trying to learn ! !

Thanks Jordan Peterson.

Let's put this way: General idea is more or less ok, but the assumptions are totally invented. Where are the figures?

The Pacific rim auto manufacturers last longer because of other processes. 1. The forms forms for the engine are poured directly into the molds at the steel mill. This ensures metallurgical consistency. The "Big 3" and almost all other car companies get ingots (steel bars) from the mills. These are then reheated and reduce the strength of the cast engine. 2. The Pacific rim companies also put more nickel in the steel. I took apart a Mazda engine at 400,000 miles. The was no lip or ridge at the top of the cylinder wall. Take apart an engine from another company after 100,000 miles and you can break your fingernail on the ridge. Thanks for the video!

I Allways drive Honda.. the sweet spot is from 5 years old up to 30

I put on over 25,000 miles per year. Not only do I not want repair costs but I absolutely need my vehicle to be reliable at all times. That is why I buy a new car every 5 years and this next one will be paid with cash if I can't get insanely an low interest rate again

This is great, but I would love to see this graph with actual values plotted. The reason is that I really doubt the cost of maintaining a twelve year old car is the same as purchasing a new car. I've driven twenty year old beaters forever and it's never cost more than $1000 per year to keep them on the road. If something needs a repair that costs more than $1000, I just buy another beater for $1000.

audio only in left ear.... so irritating

Sir.. as long as i saw you. You look like jean claude van dam in "Hard target"

Sadly, we are in a car shortage in 2023. Used cars cost MORE than used cars. Very unusual.

repair costs will also not grow exponentially

This is basically a crap version of the "Crazy Hot" scale lol

Awesome lesson here.... I just can't believe how much money people spend on leasing or buying new cars..... I bought a 2012 Kia Rio manual in 2018, 6 yrs old with only 40k miles and for a price that is a quarter of a new one..... My neighbors thought it was brand new.... I explained to them it's kinda old or used, they didn't believe me.... Anyway the point is that depreciation cost will be a joke, repair cost should be ok too, especially being a manual, and the efficiency too.....

Your idea is right, but the numbers aren't. These curves really depend on the make and model of the car. Some brands are way more reliable than others and you are likely to be just fine purchasing a 10-year old toyota corolla and drive it for another 100,000 miles. In the same time some of the new luxury german cars start having problems during the first year of ownership.

Does a mullet take more to maintain over time than other hairstyles?

I can't find trustworthy mechanics including the dealership. That's why I tend to buy new. I'm less likely to have to get it repaired if it's new. I've been ripped by mechanics that need to do "work" on my car.

I clicked this video just to scroll straight forward to comment section. I am not disappointed.

Excellent explanation for an average car. There are two exceptions: #1. The good! TOYOTA or LEXUS: the depreciation is less dramatic than in your graphic and usually the repairs start later as well. #2 The bad and ugly! Land Rovers... Depreciation is super accelerated and expensive repairs usually start on the first or second year from new. Both examples I know as a fact!

Your cost of repairs are low in the first years 😂😂😂😂😂😂😂😂😂😂😂 BMW, Audi, VW, Mercedes, Ford, GMC, Mitsubishi, and Nissan Have entered the chat.

You look like Shawn michaels in the thumbnail

Repair-costs don't skyrocket exponentially - but this aside, nice graphs

Doesn't apply post 2020

Rich : New car Poor: Used car Simple as that, no scientific none sense required. Lol

If it is a HONDA the sweet spot runs forever.

This advice is mostly true and better than a lot of advice I see recommending you buy some clunker to save money (don't!), however in the real world there are subtleties that will never work out in a math equation. Buying a car new, if you are responsible and will keep to scheduled maintenance, not drive into stuff, avoid pot holes, and generally take good care of your car, if you get it new you will have years and hundreds of thousands of miles of reliable transportation. On the other hand, in just a year or two and a couple dozen miles, a bad owner can really trash a car in ways that won't manifest until a few years later, but still in that 2-8 year window. Also, dealerships tend to give better deals on new cars like low interest financing or major cash off, whereas they tend to not deal as much with used and you pretty much pay what they want you to. You also don't get to choose your car as you're stuck with whatever's available on the market, so maybe you'll have to buy 4 wheel drive for extra money when you don't need it or upgraded power this and that that you don't want and might break through the years. IMO, the best thing to do is get a sensible new car and get a good deal on it by leveraging sales events or finding a salesman that really needs a sale and will work with you to get a good deal, then take good care of that car and keep it 10-15 years. I can see lots of modern basic cars lasting 15 years without any horrendous service requirements. The main thing is to avoid luxury cars as those depreciate like a rock and maintenance goes through the roof. Some people have bought BMW's for just a couple grand and then spent $20k in the first 2 years in repairs due to it being a fussy car. Bottom line, stick with a sensible car like a Corolla if you want to save money and new or lightly used won't make much of a difference if you do it right. By the time the car is old enough that you want to get rid of it, hopefully you'll be making more money and pinching pennies on the car won't matter as much.

The answer is, buy a 2 yr old car with 1 yrs mileage on it.