Topic: New compact vs used luxury

[Marko]

Let's say you have about 15-20k to spend on a car. You can get a brand new compact, or a slightly used (3-5 yrs) luxury car, say a 2004 G35 or 2006 maxima or something like that. It seems to me that in Canada the vast majority would choose the new compact, and I'm wondering why. I have noticed two major differences between cars on the road in Canada and in the US. In Canada, a much greater percentage of cars are compacts, and also the average age of cars on the road in Canada seems to be newer than in the US.

Growing up, my parents taught me that newer is always better. They would buy a brand new car every 3 years, and it was always the smallest cheapest car they could find. Growing up we had a Neon, a Cavalier, a Shadow, a Colt, and a Reliant. So when I graduated and got a job, I bought myself a brand new compact on my parents' advice. After a while I decided it wasn't such a good idea. My car was slow, small, loud and uncomfortable on the highway, had very little features, and the fit and finish were horrible. Its only positive aspects were that it was easy to park and it was good on gas. So I began to shop around and traded it in for a 4 year old entry-level luxury car. The difference was amazing. It was much faster, roomier, had every power option, the seats were very comfortable even on long trips, and despite being used was well maintained, it only had a few small scratches and it even still had new car smell. I realized I should have been buying used luxury cars all along.

I am just wondering what makes someone choose a new compact over a used larger car. For some it might be because they actually prefer a smaller car, but I doubt that's teh case with most people, it definitely wasn't the case with my parents, who would compare the sizes of our cars with previous cars we had. I think there is something that makes Canadians think that older cars are bad, whereas in other parts of the world, even in the US, people have a different mindset.

[dorin]

If the purchase cost is the same, then a new compact will be more reliable, cost less to run (gas, maintenance), and likely be more fun to drive than a 4-year older larger more luxurious car.  The new compact will provide a more worry-free ownership experience.

Growing up we had a Neon, a Cavalier, a Shadow, a Colt, and a Reliant.

So growing up you had nasty cheap compact cars.  I think your view of compact cars would have been different if those cars had been a 323/Protege, a Civic, a Golf/Jetta, and/or a Corolla.

[initial_D]

Some people prefer NEW, period. A new car does come with a warranty, and some do like that. Buying a used vehicle has its risks, even though you can do all the research and sometimes as luck would have it, you could ended up with a big headache.

Personally, I would take the chances, spend the effort and search for a used and well maintained vehicle, with options and features that are more in line of my wants and needs.

[Marko]

If the purchase cost is the same, then a new compact will be more reliable, cost less to run (gas, maintenance), and likely be more fun to drive than a 4-year older larger more luxurious car.

Agree with the first two points, but not that it will be more fun to drive. How is driving a car with 100-150 hp and few power accessories more fun than driving one with 250+ hp and every power feature there is?

The new compact will provide a more worry-free ownership experience.

Not necessarily.

So growing up you had nasty cheap compact cars.  I think your view of compact cars would have been different if those cars had been a 323/Protege, a Civic, a Golf/Jetta, and/or a Corolla.

Possibly, but not by far. My parents always bought the cheapest cars which were always American. However I have been in many Japanese compacts as well and the differences are minor. A coworker has a Civic that I've been in countless times, and while its fit and finish are higher than an american compact, it's still nowhere near something like an Acura TL or Lexus IS.

[Marko]

Some people prefer NEW, period.

Exactly, and that's what confuses me. What is with this obsession with new that so many Canadians have? It seems to be much more prevalent among Canadians than in other countries, according to my observations.

A new car does come with a warranty, and some do like that. Buying a used vehicle has its risks, even though you can do all the research and sometimes as luck would have it, you could ended up with a big headache.

You can buy a warranty when buying a used car too. If you buy a used car from a new car dealership, they usually offer CPO warranty (certified pre-owned) which covers everything bumper-to-bumper for a short period and then the powertrain for a much longer period, just like a new car. If you don't buy from a dealer, you can still buy a warranty from a reseller.

[aquadorhj]

If the purchase cost is the same, then a new compact will be more reliable, cost less to run (gas, maintenance), and likely be more fun to drive than a 4-year older larger more luxurious car.

Agree with the first two points, but not that it will be more fun to drive. How is driving a car with 100-150 hp and few power accessories more fun than driving one with 250+ hp and every power feature there is?

you are confusing "fun" with convenience.  Yes, more power always helps, but sometimes wringing the heck out of small light package is more "fun" than being in the middle band of high powered machine.

The new compact will provide a more worry-free ownership experience.
Not necessarily.

Yes, necessarily.  New cars are always more worry free.  I know of CPOs existence, and I'll probably take that route next time around, but used car warranties are typically a bit different than new car warranty.(ESPECIALLY if you get it from non-dealer source...)

So growing up you had nasty cheap compact cars.  I think your view of compact cars would have been different if those cars had been a 323/Protege, a Civic, a Golf/Jetta, and/or a Corolla.

Possibly, but not by far. My parents always bought the cheapest cars which were always American. However I have been in many Japanese compacts as well and the differences are minor. A coworker has a Civic that I've been in countless times, and while its fit and finish are higher than an american compact, it's still nowhere near something like an Acura TL or Lexus IS.

why are you comparing civic to TL or IS?  they are in different leagues in terms of EVERYTHING. 
you should compare civic to neon, cavalier, etc., and you admit yourself, civic's better.

Some people prefer NEW, period.

Exactly, and that's what confuses me. What is with this obsession with new that so many Canadians have? It seems to be much more prevalent among Canadians than in other countries, according to my observations.

I don't find that.  I see plenty of cars that are 10 yrs old or older and even more trucks that are older. 
Maybe you live in a nicer part of town where people like to get new cars.


OR maybe it has been(still is) so easy to get new cars with payments  and easy credit for last decade or so, new car population exploded.    (<- what I believe to be the case)

Anyway, What was your "Used luxury" car of choice, anyway?

[KRS]

  I've bought four used cars in my life. the first from my grandfather was ok, the second ate the rear differential within 2 months of my buying it and transmission wouldn't shift into second for the last 4 months i drove it which in a manual "three in the tree" tranny is a solid pain A pacer wagon cause it was all I could afford, and a pick up that came with a third party warranty that they managed to void because i couldn't prove the guy who owned it before had the tires rotated and the brakes inspected.
  While I know I was hit with bad luck and at least 1 mechanic who 's idea of a pre buy was to park in it side for a few hours then cash the check, I will not buy another used car again because i can have enough troubles with out buying some one else's as was my experience. As to a used car warranty unless it is from the original manufacturer my experience is that it's at best a really expensive piece of toilet paper. I couldn't get it honoured and i know at least 5 other people who have fallen for one and found they couldn't get it honoured. 
  While its entirely possible to have issues with a new car and it can be inconvenient at least the manufacturer is the one out of pocket not me. Certainly thats whats behind my "obsession" with new.

 As to your question "How is driving a car with 100-150 hp and few power accessories more fun than driving one with 250+ hp and every power feature there is?"  you really need to take an original Mini for a drive if you ever get a chance. they have no power anything but i found it as entertaining a car to drive as I've ever been in. To me power features make a car more convenient not more fun. Power windows and automatic climate control do nothing for the actual driving enjoyment and an automatic transmission removes from it.

[Marko]

why are you comparing civic to TL or IS?  they are in different leagues in terms of EVERYTHING. 
you should compare civic to neon, cavalier, etc., and you admit yourself, civic's better.

I'm comparing the Civic to a used TL/IS because my question is about new compacts (be it japanese or american or whatever) versus older higher end cars. I'm not interested in the domestics vs imports discussion.

I don't find that.  I see plenty of cars that are 10 yrs old or older and even more trucks that are older. 
Maybe you live in a nicer part of town where people like to get new cars.

Of course there are many older cars too, but they are usually really junky, not comparable in value to newer compacts.

OR maybe it has been(still is) so easy to get new cars with payments  and easy credit for last decade or so, new car population exploded.    (<- what I believe to be the case)

But then wouldn't the easy credit and low interest also apply to higher end new cars, not just compacts, yet a disproportionate number of people still go for compacts.

[blur911]

I bought a new car once, that was enough.  The warranty was more trouble than it was worth, the dealer just wanted to "repair" the same thing over and over so they could collect warranty work from Ford. 

Since then I've been buying older but much nicer cars, but not econoboxes.   I do this because I am able to repair my own cars, try taking a 19 year old Audi to a mechanic and see how much it costs you.   I also don't mind bouncing an old Audi off snowbanks or entering the occasional drivex rally with it.
The only catch is you have to have several vehicles to make sure that at least one of them is always running.  I don't find that to be a problem, it means that sometimes I have to drive the 911 to work if the Audi is out of commission.  Or maybe I'll take a bike, or the truck, or the Subaru, or the Jag.

[vdk]

Few things:

1. Warranty - peace of mind.
2. interest %.
3. Lease option.
4. It's NEW.
5. Maybe in the $15-$20k range, there's not that many nice cars but in the $18-$25k there are (Mz3, Rabbit, etc)
6. You gotta pay big cash when a used car breaks down.
7. Used car warranties ain't worth the paper they're written on.
8. Loaners.

[Marko]

The only catch is you have to have several vehicles to make sure that at least one of them is always running.  I don't find that to be a problem, it means that sometimes I have to drive the 911 to work if the Audi is out of commission.  Or maybe I'll take a bike, or the truck, or the Subaru, or the Jag.

But then you have to pay insurance for several cars. How much extra is insurance for a second or third car typically compared to just one?

[mmret]

IMO if you do your homework you can get a much better value on a 3 year old car, particularly luxury cars as the absolute depreciation is larger. You take the risk and there is an expected reward. However some people don't want that risk or don't have the knowledge to avoid stepping on landmines....those are the people who are generating the used cars.

[The Mighty Duck]

Used cars might be better value to buy, but the operating costs are often much higher.  Take the Infiniti G35: yes, you can buy a used one pretty cheap.  But it will cost more to insure, more to put fuel in, more even for just regular maintenance, and more replace wear items like tires and brakes.

Compact cars these days are very, very good.  The Honda Fit won AJAC's 2009 Best New Design award, even though it was going up against luxury cars like the Audi A4 and Jaguar XF.

So, let's compare the Fit to the G35.  Assume you could find a G35 for around $20k.

The Fit will be cheaper to run, cheaper to maintain, cheaper to insure, and cheaper to replace wear items.  You also get better interest rates buying new vs. used, a warranty, and you know the car's full history.  Lots of reasons to buy new. 

[articsteve]

Let's say you have about 15-20k to spend on a car. You can get a brand new compact, or a slightly used (3-5 yrs) luxury car, say a 2004 G35 or 2006 maxima or something like that. It seems to me that in Canada the vast majority would choose the new compact, and I'm wondering why. I have noticed two major differences between cars on the road in Canada and in the US. In Canada, a much greater percentage of cars are compacts, and also the average age of cars on the road in Canada seems to be newer than in the US.

2 elements distinguish the two markets:  gas prices and climate.

Gas prices are self explanatory.   Climate in the USA, generally speaking, allows for the successful operation of older cars.  It's just that simple.  Ontario road salt and freezing temps across most of Canada beats the hell of of cars; hence ppl get fed up with rust and premature mechanical wear and like to buy new, but smaller and cheaper units.

[tpl]

If one is prepared to do some maintenance oneself AND is one is prepared for the fact that cars that are expensive new are usually expensive to maintain.... there is a lot to be said for a cream puff/ cpo 2nd hand entry level luxury car like a BMW or Audi... or whatever turns your crank.

For myself I agree quite a bit with Artic.   Given a better climate, no snow, no salt, a 2nd hand car would possibly be in my garage.

[Marko]

Used cars might be better value to buy, but the operating costs are often much higher.  Take the Infiniti G35: yes, you can buy a used one pretty cheap.  But it will cost more to insure, more to put fuel in, more even for just regular maintenance, and more replace wear items like tires and brakes.

Compact cars these days are very, very good.  The Honda Fit won AJAC's 2009 Best New Design award, even though it was going up against luxury cars like the Audi A4 and Jaguar XF.

So, let's compare the Fit to the G35.  Assume you could find a G35 for around $20k.

The Fit will be cheaper to run, cheaper to maintain, cheaper to insure, and cheaper to replace wear items.  You also get better interest rates buying new vs. used, a warranty, and you know the car's full history.  Lots of reasons to buy new. 

I agree with only some of your points.

Gas - gas is a bit cheaper, but not quite as bad as people sometimes think. My car gets about 33 mpg on the highway whereas a typical economy car will probably get 40. Because while my engine is much bigger, it also needs to work less to maintain speed, so when I'm going 120 km/h I'm only turning about 2000 rpm whereas a smaller car is probably running at 3000 rpm at that speed. The difference is city driving is a bit worse, that is one sacrifice you have to make if you want more power.

Insurance - My rates stayed the same when I went from compact to luxury, probably because I was going from a car the insurance company considered "sporty" to one that they considered a grandpa's car.

Maintenance - I don't see why maintaining a larger car is more expensive? I might have to buy slightly more oil, a negligible cost. Things like air filters cost the same regardless of the size of the car.

Replacing wear items - Some things (ie bigger tires) will be more expensive to replace, but many things won't. I doubt a brake job would cost more on a G35 than on a Sentra, because the labor involved is the same and the brake pad itself is the same price or very similar. Unless we are talking about the G35S coupe which has brembo brakes...

[mmret]

If one is prepared to do some maintenance oneself AND is one is prepared for the fact that cars that are expensive new are usually expensive to maintain.... there is a lot to be said for a cream puff/ cpo 2nd hand entry level luxury car like a BMW or Audi... or whatever turns your crank.

For myself I agree quite a bit with Artic.   Given a better climate, no snow, no salt, a 2nd hand car would possibly be in my garage.

One could always import a car from down south, but this is quite a bit of work plus most cars I'd be interested in would have a 7% duty on them. Cursed non-free trade.

[Marko]

Climate in the USA, generally speaking, allows for the successful operation of older cars.  It's just that simple.  Ontario road salt and freezing temps across most of Canada beats the hell of of cars; hence ppl get fed up with rust and premature mechanical wear and like to buy new, but smaller and cheaper units.

I would think that would actually make people less likely to buy a new car, not more. Because people would be more hesitant to drive a new car in salt than a used one, would they not? Isn't that the whole reason people buy winter beaters?

Then there's always krown...

[mmret]

Climate in the USA, generally speaking, allows for the successful operation of older cars.  It's just that simple.  Ontario road salt and freezing temps across most of Canada beats the hell of of cars; hence ppl get fed up with rust and premature mechanical wear and like to buy new, but smaller and cheaper units.

I would think that would actually make people less likely to buy a new car, not more. Because people would be more hesitant to drive a new car in salt than a used one, would they not? Isn't that the whole reason people buy winter beaters?

Then there's always krown...

Maybe they just don't want a rust bucket period, even if the new car will only last 5 years before rusting. Plus if you buy new you can guarantee that its Krowned.

[Cortina]

I don't think you would have too much trouble with a used lexus at that price 15-20K . I would tend to go with luxury Toyota brand because it would likely be worry free. I woundn't look anywhere else.

http://www.trader.ca/powerpage/details.aspx?vlotid=77043&adid=7083045

I don't think buying a car brand new. makes a car more or less reliable. Just you have nice warranty to back you up. Chances are the car is going to be ok at least for 3 years, you would hope. But really depends on the brand and number of other factors. The plus side is you really are the first to get the car and see at it best and look after correctly .


Edit: Silly moment kicking in.

Oh and one other thing, You know very quickly if it is a friday motor too and should off load it fast.