Tell me why this is a bad plan (1 Viewer)

[mcgaskins]

In most cases (business tax deductability aside) the smarter financial play is always to buy used and let someone else eat the depreciation. i.e.

New 2018 LC with 0 miles = $85k
Used 2015 LC with 40k miles = $55k
Used 2011 LC with 80k miles = $40k
Used 2008 LC with 120k miles = $28k

You could buy three 2008 LCs for the price of one new 2018 LC. If you assume the truck goes 300k without major issues, that's 540k miles you could put on the 3 of them vs 300k for one new 2018, or almost another truck's life worth of miles. (Or consider three 2015s for the price of two 2018s and get 210k additional usable miles).

Even if you assume 0% financing on the new vehicle and 10% on the used ones it's still a significantly better investment to buy used. I've bought vehicles new before and there are many emotional reasons to do so, but finance isn't one of them.

I agree with you in the majority of cases, but there are some cars and cases where buying new makes sense. My wife bought a new Honda Civic EX in 2011 for about $17k, and after 75k of hard city life we sold it for almost $11k in about 2 days on CL. It cost her virtually nothing to run and the depreciation was about $0.08/mile. I bought her a new CRV a couple months ago because I expect it to also retain its value and cost little to operate though not likely as much as the Civic. There are also low volume / special cars like the GT3 that often make sense to buy new, but generally cars that cost more than about $30k make the most sense to buy used especially if they’re reliable and always in demand.

 

[NMNORSSE]

78 with a little effort or a costco membership

TELL MORE PLEASE

The Costco auto buying plan basically gets you employee pricing on a new LC or LX, or pretty much any new car you want. The employee price on a new LC is 78. Cargurus.com or the Toyota employee pricing sale will likely get you the same deal. The 16s and 17s left on the showroom floors should be less than that.

 

[jwestpro]

The Costco auto buying plan basically gets you employee pricing on a new LC or LX, or pretty much any new car you want. The employee price on a new LC is 78. Cargurus.com or the Toyota employee pricing sale will likely get you the same deal. The 16s and 17s left on the showroom floors should be less than that.

Similar using USAA i found in the past.

 

[nuclearn8]

Here I was just excited to share the news I'm about to purchase my dream vehicle and I got home buying and financial advice... good deal. I'll have to log in more often.

 

[arich]

What if you're not a USAA member? No family members in the military.

Similar using USAA i found in the past.

 

[linuxgod]

I agree with you in the majority of cases, but there are some cars and cases where buying new makes sense. My wife bought a new Honda Civic EX in 2011 for about $17k, and after 75k of hard city life we sold it for almost $11k in about 2 days on CL. It cost her virtually nothing to run and the depreciation was about $0.08/mile. I bought her a new CRV a couple months ago because I expect it to also retain its value and cost little to operate though not likely as much as the Civic. There are also low volume / special cars like the GT3 that often make sense to buy new, but generally cars that cost more than about $30k make the most sense to buy used especially if they’re reliable and always in demand.

For low volume vehicles that are likely to appreciate over time I agree. Also as they say, negotiate hard on the purchase because you make you money when buying, not selling.

Even for that Civic I bet if you did the math on maintenance and repairs the guy who buys it for $11k (or the next owner who pays $4-5k for the Civic with 150k miles) still makes out in the end. But I tend to agree that the savings on vehicles which don't depreciate as quickly may not be significant - after all $2k in depreciation savings on a $17k vehicle is the same percentage as $10k on an $85k vehicle, so the more expensive vehicle makes the depreciation more obvious. And you may be right about the depreciation on that Civic - my wife's friend sold her Prius a few years back when gas was approaching $5 per gallon for what she originally paid for it because the demand for hybrids was so high, but she'd bought it new, drove it for 3 years, and put 25k miles on it.

 

[arich]

WOW, Carguru. Looks like the prices are about $77,000 on a 2018.

 

[arich]

Tell me more about this. I have not met with my accountant in 2018 but I know that I normally write off my trucks over several years. Tell me more about the tax changes. I'm pretty much in the highest tax bracket. I have an SCorp
I love my 2011 but if I could nab a 2018 that would be very cool. I have several buyers for my truck anytime I want to get rid of it.
Anthony

 

[jwestpro]

What if you're not a USAA member? No family members in the military.

I've always just hard ball negotiated and made sure I knew exactly what other stock there was in the region and remember, a one way flight and drive home is often not really that expensive so don't let a difficult local dealer try to strong arm you if they're the only one in the immediate area. You can even find other dealers online showing discounts right up front.

What works in your favor with this sort of vehicle is that while they may only have 1, not many people come in to buy these and the more they can sell, the better their dealership looks to corporate. YOU are doing them a favor, not the other way around

 

[arich]

I have travelled across the country to cars. Last one was a 2007 M5 with a 6 speed that want moving. New it was $112k. I got it for 42k at 3 years old. Sucks for the first owner.

 

[NMNORSSE]

The Costco membership is only $50.

 

[nuclearn8]

Well, after 1.5 years of shopping we finally pulled the trigger and bought a lightly used GX460/Prado Luxury with DSP.
The LC200 was just too much vehicle for our needs and we'd be wasting money on something we'd never use in terms of additional towing capacity over the GX. The Prado has everything we both want and need so couldn't be happier, especially with the deal we found combined with the new car finance rate. Thank you all for the feedback and input with my original question... it helped guide our purchase of new verse used...

 

[fireball]

You’re dead to us now!!!

Just kidding. Congrats. It’s still in the toy/lex family so we can still be friends.

 

[T4Runner]

You’re dead to us now!!!

Just kidding. Congrats. It’s still in the toy/lex family so we can still be friends.

You’re still in the family, but you have to sit at the kids table

 

[mcgaskins]

Well, after 1.5 years of shopping we finally pulled the trigger...

That's it? I'll bet the sales guys you met along the way loved you guys!

 

[NorthFJ]

Well, after 1.5 years of shopping we finally pulled the trigger and bought a lightly used GX460/Prado Luxury with DSP.
The LC200 was just too much vehicle for our needs and we'd be wasting money on something we'd never use in terms of additional towing capacity over the GX. The Prado has everything we both want and need so couldn't be happier, especially with the deal we found combined with the new car finance rate. Thank you all for the feedback and input with my original question... it helped guide our purchase of new verse used...

Congrats on the new rig, I'm sure she'll be a good truck to you guys!

 

[Hammeredsole]

Used! I just picked up a babied ‘14 in Blizzard Pearl with 55k on the clock. One owner, full service history at the local Toyota dealer, and not a dent or leak on the thing. I clay barred it and waxed it very well, and the thing looks like new. Under the hood appears show room new. There aren’t a lot out there, so you’ll have to look, but I got lucky and found mine after looking for about a month. The only downside is the drivers butt leather is a bit worn/wrinkles on the bolster. I paid $44,500, and truly feel that I got a roughly $40,000 discount on a new model.

 

[aging fleet]

That's it? I'll bet the sales guys you met along the way loved you guys!

Over 3 years of contemplation in this thread and 1.5 years of shopping, that's a well informed purchase decision.