Is this a good method to get a relatively new car for comparatively less money?

Question

Given, saving money on a car loan may be kind of an oxymoron, but that's the nature of the beast.

I'm a typical middle class guy, and I like to drive midsize sedans. But I never buy new, because I can save a lot of money just buying slightly used cars, so I just go for cars 1-2 years old with low miles.

But it just hit me: Is there even more money to be saved? Am I doing it all wrong buying from dealerships?

I'm fairly open as far as like new, midsize newer sedans go, as long as it's a sound make.

Well what about buying repo cars from finance companies?

Many of these will be in my criteria of a year or two old with low miles. They had to be financed after all.

And as I understand it, finance companies and banks aren't in the business of selling cars. They don't want the car, they want the cash, but it came to that through the last resort which is repossession. And now they want to unload it and fast.

Could I likely get a lower price buying a one or two year old repo car than any price a dealership would let the same car go for?

Sure, there won't be any kind of limited warranty that many dealerships offer on much of their used stock, but I figure the few and far between mechanical repairs a newer low mileage car will need in the near future could be more than offset by the amount I save on the purchase itself.

What do you think?

charlie · Answer

Do not go tobuy

Anonymous · Answer

99%+ of repos are sold at dealer only auctions. How will you be able to buy?

And they don't sell for thousands below wholesale. Its a competitive environment and lots of dealers want late model cars and have way more money than you.

Buy a 4 year old car from a private party and keep it for 5-10 years and then rinse & repeat.

G. Whilikers · Answer

Long story short, repos can occasionally be bargains. They can also be a pig in a poke because they tend to be seized from people too irresponsible to pay their bills... who knows how well they treated the car itself?

ANDRE L · Answer

No, far from it.

While the practice of buying 1-2 year old cars can offer significant cost savings over buying new cars, the flip side of that is that when selling off what is then a 4-5 year old car, one has in that period lost almost the greatest possible depreciation, so that the money you get for the 4-5 year old car will be a low one.

Thus, while your plan gets you cars for less than new cost, it also loses you a LOT of money when selling the cars off. And, those losses multiply with each such cycle.

The far better plan to save money is buy a 1-2 year old car, and drive it until it is at least ten years old. Most modern cars can provide good service through such a period without major repairs.

arther · Answer

If someone can't meet the repayments you think they are going to get it serviced?

. · Answer

Yes.  Perform regular maintenance and drive your car (at least) until it has 150,000 miles on the odometer.

Is this a good method to get a relatively new car for comparatively less money?

6 Answers