Overhaulin'

buy new cheap car or used cheap car from carmax?

Is it better to buy a brand new cheap sub-compact car from a dealer priced at say $13K or buy a used car at www.carmax.com for $8K to $10K that has 7K to 33K miles on it? Also, I do have $15K in cash, so I won't be financing.

Public Comments

1. go to climax
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3. The issue is always risk VS price. First I give you a few hints, then recommendations. The most reliable way of obtaining knowing the car true condition is to investigate a car bin number. Like tracking a social security number. The problem is that not even that is reliable. Say you use Carfax (the car record company). One of my cars has been in more than 6 accidents, but at least 6 serious enough to involve a police record and DMV notification (You obtain the person at DMV directly). All 6 in the same state and all of them involved insurance companies and there a claim was filed. My state's DMV shows only 4 accidents. Carfax shows ZERO accidents. Do you want to pay Carfax and buy my car? The situation would be even more difficult if the car came from a different state. Never buy a car brought from a different state. Period. Besides accidents a car can be totaled (flooded cars sold after Katrina across USA) and you cannot tell from looking at it unless you had the DMV record from Louisiana. THE ADVISE Mileage (not all mileage are the same, some is traffic jam or stop-and-go city mileage) determines the car warranty, and the amount of maintenance that the car will need over the time. The odometer can be altered but a DMV record will catch that. Frame structure is even more important. It tells you if the car has been in a significant accident. Some auto body shops sell you an inspection of the frame. Every accident leaves a trace and the amount of change to the structure gives you an idea or even disqualify a car. A test drive is good feedback - you have to like the car's ride. Some people do trash a car's suspension. An engine inspection by your trusted mechanic is often a basic requirement. Do it before purchase. If after purchase, make sure you can return the car within 30 days within 30 days. Don't buy without a warranty. Check the Consumer's Report yearly car review for the car/model/year. You can find it at the local library. It gives you an objective estimate of the reliability year-after-year and by component. You will know how reliable and what to inspect and what to expect in maintenance expenses. Very important - buy the Consumer Report new car report for the new car version of the model you want. It gives you the dealer cost of the basic car and the addons. Car's depreciate the most the first year and then the second and third year. By the 4th year is worth about 50% of it's original value. Robbing people who respond to Craiglist ads is happening more often. Beware of rental companies. Their cars are legally "fleet" cars and DMV usually requires less information from them. Although they are usually well maintain (mechanically) and they are sold once they reach 2-3 years two friends of mine (both managers) advise me against buying from them. They argue that customers are more abusive of a rental that of a own car. Same applies to government sales (usually auctions) - they are fleet cars so they are exempted from reporting to DMV. Don't buy in car auctions. Burn your money instead. I sell a bumper sticker on eBay - "I bought my car in an auction, I am a sucker" WHERE TO BUY Regardless of the Blue Book, etc,, a new car can be close to the price and it comes with all the warranties. I have bought three cars of about 20k each. One for 1,500 over dealer cost (per Consumer Report); one at dealer cost and one for 1,00 below dealer cost! The drawback on two cases was that I didn't like the car color .... This is the best time of the year t buy a 2010 model at dealer cost or below; the catch is that the manufacturer will refund the dealer based on their volume and/or have an incentive to help the dealers move older inventory. A dealer can make 2-3k selling the car at cost. They will tell you "are you crazy, how do I make money?". Simply tell them take it or leave it - I am considering another manufacturer anyhow (never mention what manufacturer). In summary a new 2010 car may come close in price to a used one. The second most reliable source are manufacturer pre-owned. They come with warranty and the source is more reputable. Another source is the bank. Many people are defaulting. One risk, lack of warranty and previous owner's may damage the car before turning it in or is taken away by the repo man. Many banks offer their employees first access to these cars. Maybe you know a bank employee ... And of course, someone you know or just is the original owner. Sometimes you have to make the decision quickly, which adds to the risk. Inspection and DMV are critical. One last advise - never mention you will pay cash. Dealers make a lot of money in financing: "I will talk about money after we agree on the price." is my standard response. Good luck.