patrick.net

There are decent dealers out there - but if you think about it they are flippers and it is easy for them to fall into "covering up" something ugly and expensive that you won't notice until you are out the door especially in highly populated areas where repeat business isn't a high priority.

I bought a car from my neighbor a while back - his father had passed away and he had a car that had been sitting for a while. Great price and it is 18 years old and has 70k miles on it. Property tax is $15 a year. It had some leaks from sitting idle - most of which were just seals that were cheap to get fixed. My kids hate it ;) The "little old lady from Pasadena only drove this to church on Sundays" cars are out there but you won't find them at the dealer. It suits my 4 mile commute. There are a lot of people out there that would like to unload a car but either aren't buying a new one to do a "trade-in" or just don't like selling them via the paper, craig's list, etc...You may also run into someone that is getting a really bad deal on their trade-in and you can buy it for less than the dealer would sell it back to you and the seller gets more than the dealer would do in trade. It certainly isn't as easy as walking into a dealership but if you are a cheapskate like me you can save some money and in some cases get incredible deals. Also, people going through divorces sell things for a song to spite the other party - you win.

I hate buying new cars but I get a new one for the wife every five years or so - it is a bad economic deal but I prefer her to drive a reliable tank for safety reasons. Bought a new van last year for her - they were VERY willing to deal.

Whatever you do, before signing any deal, is to take it to a mechanic. They might charge $50 or so to check it out but it's worth it. The last thing you want to hear is "It keeps going out of alignment because the frame is bent...". Sticking with this also prevents emotional purchases...Dealers are always saying "I have someone coming in later today to sign the papers on this but if you act fast you can steal his deal" - bogus. There is a reason used car salesman rank high on the slimeball scale. Don't get me wrong - there are good people out there but it is what it is!

I agree with you. The interesting thing is that dealers seem to be willing to undercut private party sellers lately.

We may get something a little bigger - like I said, just getting a little itchy, but we're finding that you can get 2-3 year old Honda's for about 1/2 of what they were new. That's after negotiating of course, but 6 months ago, you couldn't touch them for near that. Honda's in general carry a hefty premium.

Also, on the trade, they have been much more reasonable than in the past. Profit margins must be shrinking - or business is just that bad....

joshuatrio says

Also, on the trade, they have been much more reasonable than in the past. Profit margins must be shrinking - or business is just that bad….

Probably both - a lot of the cars on the lots are bought from wholesale auctions..a place that most normal people would never get a chance to bid on. You would think resale values might hold with the decrease in inventory as the "clunker" program reverberates through the food chain. Either that or they really weren't "clunkered" after all. The spread for a dealer on the used side is pretty dramatic (or it used to be). Perhaps they are getting some competition from person-to-person transactions that they hadn't had to deal with in the past - either way, there are deals to be had in all but the collector ranges. I have a friend that bought a special edition Mustang a few years back - it actually appreciated 30% in a few years. I guess there are people out there that will speculate about anything - even new cars!

I bought a car in February; the dealers I called had caller ID and it took months to get them to stop calling me. damn pushy, they were.

No recent car buying experience here, and suggest you find a messageboard with more people on it if you want to find enough data on people buying late model used cars.

I follow the Buffet Strategy, buy quality car used (around 3 years/50K) and pay all cash to get the best deals. This means the original owner ate 50% of the depreciation while using 25% of the vehicle life.

After a month, you'll lose the used car feeling anyway. Subsequently, I sell the car with 85% depreciation while using 75% of the vehicle life. In effect, I paid 35% of the original sticker for 50% vehicle life.

In the example of a 60K car with 200K miles life.

Original owner 50% - 25% life about 60 cents per mile depreciation
My strategy 35% - 50% life about 21 cents per mile
last owner 15% - 25% life (which sounds good until things start breaking down) about 18 cents per mile.

I've always been very pleased buying off the rental car fleet. You know they were maintained and despite stories to the contrary, almost always lightly used (business people don't flog them). Since I do my own repairs I keep them until they have 0% life, with modern cars that seems to be consistently about 300,000.

E-man says

Bought a 3-yr young car 3 weeks ago for my wife. Yes, dealerships are VERY WILLING to deal. The car was still under the manufacture warranty, and we got it for less than the trade-in value according to KBB, and slightly less than 50% of its value if bought new. Edmunds.com gave a great review on the car.

It was PAINLESS dealing with the car salesmen at the dealerships we went to. They were NOT pushy at all and very hands off. It was quite a satisfying experience. Not sure why car salesmen got a bad rep.

That's exactly what we've experienced. Never seen anything like it. Their attitudes sure have changed from a while back.

SF ace says

I follow the Buffet Strategy, buy quality car used (around 3 years/50K) and pay all cash to get the best deals. This means the original owner ate 50% of the depreciation while using 25% of the vehicle life.

This is what we've always done as well - problem is that Honda's in general (what we prefer) have never lost anywhere near 50% - but they are pretty close now ! They don't like going that low, but trust me, it takes about 15 minutes.

Six months ago, I offered the sales manager at Capitol Honda $15k "Out the Door" for an 07' Accord EX with 22k miles on it, he told me "You'll never get a Honda that cheap." Walked out... Here we are roughly 3 months later and I've got dealers willing to sell em' near that cheap without even WALKING IN THE DOOR !!!

bob2356 says

I’ve always been very pleased buying off the rental car fleet. You know they were maintained and despite stories to the contrary, almost always lightly used (business people don’t flog them). Since I do my own repairs I keep them until they have 0% life, with modern cars that seems to be consistently about 300,000.

I've never had an issue buying a rental car. As long as there are no cigarette burns in the seats and they don't smell, you generally have bought yourself a pretty good car.

SF ace says

I follow the Buffet Strategy, buy quality car used (around 3 years/50K) and pay all cash to get the best deals. This means the original owner ate 50% of the depreciation while using 25% of the vehicle life.

I'm curious, this is always from dealers? If so what sort? Independents or the ones connected with new-car dealerships? Do you take it for independent mechanic inspection before purchase?

I have idly looked for a 3-year old Toyota Sienna not finding anything CLOSE to the rule of thumb you mention. Prices on 3 y.o. much more than 50% of new.

Of course the best deals are with the private party. If I'm really interested, I take a mechanic with me for the test drive and inspection which costs $50 bucks for 1 hour of their time and opinion. Then there are the carfax report and other records for verification. The kelley blue book wholesale trade in value is the approximate price. Dealership's are still middle man that can be cut out.

Certified used offer more protection, but you end up paying for it indirectly.

Vicente says

I have idly looked for a 3-year old Toyota Sienna not finding anything CLOSE to the rule of thumb you mention. Prices on 3 y.o. much more than 50% of new.

I agree. For Toyota and Honda 2-3 yr old cars were much more than 50% of new when I bought last year.

SF ace says

Of course the best deals are with the private party

I also didn't find this to be the case at all. Not sure why, but private parties tended to vastly overprice their cars... Dealers were 10-20% cheaper even before I negotiated.

tatupu70 says

Vicente says

I have idly looked for a 3-year old Toyota Sienna not finding anything CLOSE to the rule of thumb you mention. Prices on 3 y.o. much more than 50% of new.

I agree. For Toyota and Honda 2-3 yr old cars were much more than 50% of new when I bought last year.
SF ace says

Of course the best deals are with the private party

I also didn’t find this to be the case at all. Not sure why, but private parties tended to vastly overprice their cars… Dealers were 10-20% cheaper even before I negotiated.

That might be the case, but it probably depends on the type of vehicle.

2007 Mercedes-Benz E-Class E63 AMG Sedan 4D 50K mile good condition 37,225. A 2011 E63 is probably 90K out the door. http://www.kbb.com/used-cars/mercedes_benz/e_class/2007/trade-in-value/pricing-report?condition=good&id=84067&mileage=50000

A 2007 Porshe Cayman Coupe 2D 50K mile good 24,475. A 2011 Cayman is probably 60K out the door.
http://www.kbb.com/used-cars/porsche/cayman/2007/trade-in-value/pricing-report?condition=excellent&id=84208&mileage=50000

But you're right, you're not gonna get an Odessey or Sienna that depreciates that fast.

The baseline is what a used car dealer will take it for. If a dealer takes it for 25K, I want more from a private party transaction and the dealer will certainly need to mark it up 20% for overhead and profits.

It works very well for luxury cars. Less so now for private party deals on mediocre cars.

I found people wanted quite a bit for their hondas and what not, just like people are saying here. I'm sure they could be talked down a bit but driving around checking out car after car trying to bring the prices down is fairly time consuming.

I was looking at economic cars for my last purchase and found that the pricing just wasnt there. So I went the other direction and picked up a Mercedes AMG. I'm definitely aiming towards the end of it's life though. It had 95K miles on it, but after finding out about potential issues on it, I'm a little worried about the next few years. But it's just such a nice car I'll deal with it.

Computers everywhere, circuits testing everything, computers testing each other, fibre optics (wtf? who puts fibre optics in a car?)

Mechanically, nothing is terribly expensive, but the electronics could be a nightmare if anything went.

pkennedy says

I’m definitely aiming towards the end of it’s life though. It had 95K miles on it, but after finding out about potential issues on it, I’m a little worried about the next few years. But it’s just such a nice car I’ll deal with it.

Short of serious abuse, taxi usage, or lack of oil changes 95k should be barely broken in for any late model mercedes.

tatupu70 says

I agree. For Toyota and Honda 2-3 yr old cars were much more than 50% of new when I bought last year.

Correct - they are priced much higher - but if you just email them an OTD offer, you'll be surprised. Don't be mislead by the sticker.

I believe an 07' Accord EX brand new was in the $23-24k range. We've emailed a few offers for a handful of these cars (under 30k mileage), and dealers are coming back with prices in the $14k range... Not quite 50%, but darn close. Like I said, 6 months ago, you couldn't touch them for near that. Most places wouldn't come under $16-17k. Not including TTL.

I bet Toyota's are worse. Inventory seems to be sitting. You can get 09 Corolla's with near nothing mileage for around $10k. We almost bought a decked out Camry for around $13k.

Deals are to be had - and it doesn't require much haggling. If one dealer says no, time to move on.

bob2356 says

Short of serious abuse, taxi usage, or lack of oil changes 95k should be barely broken in for any late model mercedes.

True, but parts alone to fix anything on German cars is high.

My neighbor has a 740i bmw, some switch or something failed in his power seat. $900 part. That didn't include labor.

I'll stick with a simpler machine.

Actually the Mercedes hasn't had many problems, and nothing terribly expensive. Most of the parts are cross compatible with the C-class, which has 2000-2007 years, which is a lot of years to collect up used parts, and 3rd party parts.

Oil change is a good example. It requires the special 0-40W oil, only 2 brands are cleared. They aren't terribly expensive, $7/quart vs say $3. The difference comes in the 8.5quarts I need! Although it's good for 10,000 miles.

Air filters aren't bad, K&N are about $45 for the car, vs $30 for my last car. However I have 2 of them. And then I have a cabin filter, and 2 more carbon filters in the cabin :)

Spark plugs are about $7, which isn't too bad, but I need 2 per cylinder, so 12. They're good for 100K miles, so net-net not bad.

95K is very little wear and tear on the car. However if anything electrical goes, that will require a lot of work. An accident could easily sever a fiber optic link! So ontop of car damage, you might need to rerun fiber cables through the whole car!

Overall, I was expecting things to be a lot more expensive. It's mostly quantity right now.

And one phantom computer code I can't get rid of! grr.

yep, it seems to be the sensors and the sensors to the sensors are the real expensive glitch. You'll have a much higher chance of computer problem then actual mechanical problems nowithstandong normal wear tear replacement. That little square box is a 5K part and it takes a Mercedes equipment to diagnostic it, annoying.

The sensors aren't that expensive themselves in general, it's the sheer number of them!

I have the equipment to view some of those computers, but the computers apparently do need some work if you change them. And there is more than one 5K computer in there! The transmission has it's own computer even.

But overall, I got a 70K card for next to nothing. Of course it's the best purchase I made, at the very top of the financial crisis, all cash to a private party that was moving. No bargaining, he just listed it for a good deal and I grabbed it.

One of the things that annoyed me were people trying to sell their Mercedes using KBB "excellent" value. It's a new Mercedes, it's going to be in immaculate condition unless you're an idiot. They even state on KBB that execellent is 1 in 20 cars. When it's a new car, with low miles, every car is in excellent condition, but not in KBB excellent condition!

What is the deal with "salvage" titles?

I see a lot of cars on craigslist have them. Are they uninsurable?

I believe a used car lot can't sell them. Some insurance companies might not insure them as well, or only insure them for liability. You might not be able to get a loan to purchase one as well based on that.

It's really just a dumping ground for these cars. I spent a lot of time looking for a car, and found the same thing.

If you're okay with liability and handling comprehensive claims yourself, they might be ok. Although their asking prices are probably too high most of the time. They offer a slight discount, but probably not as much as they should.

joshuatrio says

bob2356 says

Short of serious abuse, taxi usage, or lack of oil changes 95k should be barely broken in for any late model mercedes.

True, but parts alone to fix anything on German cars is high.
My neighbor has a 740i bmw, some switch or something failed in his power seat. $900 part. That didn’t include labor.
I’ll stick with a simpler machine.

True parts can be expensive, but the BMW 7 series rules. I have an older 735iL (long wheelbase model), that is just awesome. Truly the ultimate driving machine. If this one ever wears out I will be looking for a 750.

Luckily for me here in oceana used beemers are dirt cheap (as opposed to very expensive like everything else in nz). Bmw is the car of choice for business people the asian countries who buy new ones every 2-4 years and dump the used ones (right hand drive) into the Australia/NZ market. You can't drive all that much in Hong Kong or Tokyo, so mileages are usually very low. I just bought my wife a 99 (imported in 2004) 520 with 130,000 kilometers (about 90,00 miles) on it for about $3500 US that is like new with full dealer service records literally from a little old lady. Amazing.

bob2356 says

I just bought my wife a 99 (imported in 2004) 520 with 130,000 kilometers (about 90,00 miles) on it for about $3500 US that is like new with full dealer service records literally from a little old lady. Amazing.

Wow - at prices like that, they are almost disposable.

I do agree, the 7 series rock. I got my first taste of one back in 98 - on board television, HUGE interior room, push a button and a visor spans across the rear window. Beautiful cars, but the cost of mx in the states drives (no pun) me away from considering one... Do you work on your own cars?

The used ones depreciate fast. So, yes you can get a good deal on a pre-owned model. Especially in the Monterey/Carmel area, as all the multi-millionaire's get a new one every other week.

My motto is if I can't fix it, I can't afford it. For the most part, I do all my own mx - anything basic, to slightly complex. If it's critical, or need a shop with special tools - there is a local shop that appears to be pretty honest. Most cars are computerized now - but the less of these makes it easier on the average joe.

joshuatrio says

My motto is if I can’t fix it, I can’t afford it. For the most part, I do all my own mx - anything basic, to slightly complex. If it’s critical, or need a shop with special tools - there is a local shop that appears to be pretty honest. Most cars are computerized now - but the less of these makes it easier on the average joe.

I do my own work 95% of the time. I don't find BMW's that hard to work on. Of course I kept an 83 Jag XJS on the road (mostly) for 10 years, a notable feat. Everything in life is easy after wrenching Jags. Bmw's tend to be very well made using top quality parts but very straight forward conventional engineering. The exception being the heating/ac systems, which I think universally suck in BMW's. Complex, very hard to service, and don't work any better than my stone age 86 mustang. I guess they subcontracted the design work to Jag. An outfit called Bentley publishing does excellent manuals for beemers that makes it possible to attack much more complex jobs than you would think possible. There are scores of BMW web sites that give you great service information for any model.

Computers can be cranky and often need other computers to talk to them, but most of the time it's still the mechanical parts that break.

Yea, I think they are almost disposable too. I won't be doing any engine rebuilds at these prices.