The Value In a Used Car
“At some point, you just gotta let it go.” He stared me right in the face as he said it with a slight grin and a look in his eyes hat said, “you really want to continue driving that piece of junk, really?” He was talking about my car, my used car!
I looked out the window and there it sat looking just beautiful. Not a dent, barely a scratch. My car drives like a dream, has excellent acceleration ( although I use that acceleration responsibly and only in emergencies). It even gets about a thousand kilometers per tank when driving across Canada. The interior is flawless and everything works. Everything except a small rattle that they cant figure out.
And for that, “I gotta let it go? Really?” After staring at him in disbelief for what felt like five minutes, a technician interrupted explain the work to be done and how long it would take. $800.00 and only a few days.
As I finished the paperwork I caught the reflection of the beautiful new XC90 that was in the showroom right behind me and my wife was already exploring it. It was amazing and the safety technology that this car has in it will amaze anyone. In fact, the company says that they aim to have zero fatalities in their cars by year 2020 and are well on their way to that goal now with the cars they already have on the road.
Leaving there I was convinced that I was buying that new car and even if it was 80,000, I was going to get that car. But of course after the excitement wore off and the new leather smell left my nostrils, my wife reminded me that it would be crazy talk to discuss buying any new car. After all, did we not buy this car used and has lasted us almost 10 years. In fact, if they actually fix the issue once an for all, it would last another 300,000 km at least.
There is the story of the man who drove his Volvo P1800 for 3 million miles. The 3 minute video can be seen here. Surely with my car that today is in such amazing shape can last another 300,000 km.
Ten years ago I bought my beautiful Volvo S60 on a used car lot in Toronto for 13,000. It had 77,000 km on it when I drove it off the lot. After about 4 years it started to have an annual issue with the rattle that they can’t seem to fix and that cost me on average about 500.00 per year.
Am I bias in favor of used cars? Are used cars really worth it in the long run. Some people I ask say yes, of course and others say no.
Edmunds.com indicates that one minute after you drive your car off the lot, it’s value is 91% of what you paid for it. After a year, it depreciates an additional 20% and after 5 years your car is worth about 37% of what you paid. In some cases, getting that amount is not guaranteed.
I picked four vehicles to do a new/used comparison. I got as close as I could to the exact same vehicles, bit in newer cars there are technologies that are not obvious when building a vehicle online.
My humble opinion, when considering the saving through insurance, past used car vs new car experience and immediate saving on vehicle cost, used cars make sense.
Thank you to my vehicle sources linked below. Although at these prices, the vehicles listed in this ad may be gone by the time you read this article, however I encourage you to investigate for yourself. Visit the car lots in this article or in your neighborhood and compare. For me, I will definitely get that sexy XC90 because it is just that awesome. Yes, it will be mine. Just not today, maybe in 5 or so years.