If cars don't depreciate over time, why not buy new?

[Saully]

I've been looking at Honda Civics for about a year -- my car (2001 Hyundai) runs fine but I want to know what's out there in case it quits.

I've noticed that the new ones list at around $18-20 K for the trim level I'd want (pretty low). Yet the used ones on the lot run around $20-22K, maybe a little higher trim level but with mileage and definitely NOT NEW. The new ones list at not much more.

When I asked (two different places) why used cars can run nearly as much as new cars, they tell me that the cars hold their value so well that as trade-ins they command a high price. Also, there is a cost for the dealership's time to check out the used car and for the warranty (better than a new car warranty).

I feel like I'm missing something here. Why would anyone want to pay as much for a used car as for the same car brand new???? (I'm assuming the negotiated price to be at about the same discount over list.)

 

[Headbanger]

The last 2 times I looked for small fuel effecient cars, I ran into the same exact problem. The Civic in all trim were about very close to what the new cost would be for anything within 2 years old. And the new ones were much more expensive then say the Nissan Sentra, Toyota Matrix or Hyundai offerings. With a new car interest rate being much lower and the longer new car full warranty, both times I went with the Sentra and have never had one mechanical or break down. If your wanting the Civic, new is the way to go.

 

[Headbanger]

There is also a large difference in Civic trim level prices. The EX is top of the line and comes with most things as standard where the VP (Value Package) you get very little to choose from and most things are not even offered at all. I think the spread when new is about $5,000 between those two, so be sure to compare the same trim levels. I still agree with you, the new and used in the same trim were unbelievably close.

 

[Saully]

The last 2 times I looked for small fuel effecient cars, I ran into the same exact problem. The Civic in all trim were about very close to what the new cost would be for anything within 2 years old. And the new ones were much more expensive then say the Nissan Sentra, Toyota Matrix or Hyundai offerings. With a new car interest rate being much lower and the longer new car full warranty, both times I went with the Sentra and have never had one mechanical or break down. If your wanting the Civic, new is the way to go.

Thanks, Steve. I haven't looked at the Nissans or Toyotas yet, although their ratings (safety and Consumer Reports) generally weren't as high. I did look at the Hyundais and haven't ruled them out. Mine has been great but whenever I get a car I'd like it to feel like I was driving a different car.

 

[_Lac_Man_]

It has been a while since I bought from car dealership, I go with wholesalers/fleets now, so forgive me if my answer seems illogical. First off, I wouldn't listen to anything that the dealership offers as an explination. Auto manufacturers also make their money from the quantity of cars that they sell. If they sell the same '04 Civic three or four times over, while the '09 Civic sits on the car lot collecting dust, they aren't making the money. There are so many incentives out there right now for buying new cars. Granted Honda, Toyota, etc. hold their value better than say, a Cadillac, I don't see their price tags only dropping a couple thousand over the course of a few years - dealerships give absolute bottom dollar for trade-ins, whatever they can squuze out of the value, they will. So to say that they paid enough for the trade that the price is now equal to or greater than that of new cars is a little hard to grasp, for me.

*Edit*
My girlfriend has an '04 Sentra. It's been pretty good to her, she has about a 45 min. commute each way to work, and she's only had mild repairs needed. A certain Nissan dealership here in town isfull of complete fools and assholes though...but that's obviously not to say that all are like that.

 

[Saully]

It has been a while since I bought from car dealership, I go with wholesalers/fleets now, so forgive me if my answer seems illogical. First off, I wouldn't listen to anything that the dealership offers as an explination.

I listen but question.

Auto manufacturers also make their money from the quantity of cars that they sell. If they sell the same '04 Civic three or four times over, while the '09 Civic sits on the car lot collecting dust, they aren't making the money. There are so many incentives out there right now for buying new cars. Granted Honda, Toyota, etc. hold their value better than say, a Cadillac, I don't see their price tags only dropping a couple thousand over the course of a few years - dealerships give absolute bottom dollar for trade-ins, whatever they can squuze out of the value, they will. So to say that they paid enough for the trade that the price is now equal to or greater than that of new cars is a little hard to grasp, for me.

From what I saw it seems like they must get a lot of people that think "used is cheaper, so I won't bother comparing the price of the new cars." Otherwise, I don't see how they'd get what they're asking (less a reasonable discount).

*Edit*
My girlfriend has an '04 Sentra. It's been pretty good to her, she has about a 45 min. commute each way to work, and she's only had mild repairs needed. A certain Nissan dealership here in town isfull of complete fools and assholes though...but that's obviously not to say that all are like that.

The one on FLW Blvd? I went there once and have no desire to go back after the way they acted towards me -- but I might since it's the most convenient.

 

[_Lac_Man_]

Oh man, that sucks, I just told her to go try that on on FLW Blvd. The one she had a bad experience at was ABC on Camelback/16th St. They were rude, pushy, tried to chalk up another $50 on her tab until I went with her and said something. It was a nightmare. Good to know that the one up north is bad too.

I can tell you this much, the Cadillac dealership that's is a few slots down from the Nissan is fantastic. Those guys are great. With their new Red Tag event, you can get a used CTS for incredible prices.

Good luck with the car-shopping-experience!