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Comment by driverdan | Hacker News Reader

Buying a one or two year old car is far better than buying new. The first few years of depreciation are the worst and if the car is a lemon you'll generally know in the first year.

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The whole point is that this is easier said than done. Yes, cars depreciate rapidly in the first two years, which is why people who own quality non-lemons that are less the 2 years old are generally very reluctant to sell them. If you can find one, that's great, but the deprecation to me has always had more meaning as a reality check for a seller than an opportunity that can be easily obtained as a buyer. For instance, you often hear that a new car loses "10%" (probably more) of its resale value the moment you drive it off the lot. Yes, if you try to sell your car the moment you drive it off the lot, you will lose 10% or more. But go out there and try to buy a car for 90% of what someone just paid for it as they drive it off the lot!

Yes, I do not know where people imagine that this supply of 1-2 year old cars comes from. The ones that do exist are mainly from rental fleets, with 30k of miles per year. Not exactly a winner of a car there.

well, 60k miles in a 2 year old car is not that much. Still lots of miles to go before you hit a million.

60k miles in 2 years is twice the avg of a work commuter in the U.S. Not that much in that theres plenty of life but it was driven a lot though and you're a lot closer to the recommended repairs

Most leases are 2-3 years long and are then sold as CPO. 30-40% discount is typical with extended warranty and decent financing. That's a good source of lightly used heavily depreciated well maintained cars for those lucky like us. But that's not what this article was about really.

You also avoid some of the "people don't sell good cars" thing , because so many two year old cars are from people who just lease new cars every two years.

By that logic, if I know I got a lemon, I should sell it in the first year or two. Otherwise I should keep it. So most of the 1-2 year old cars on the market will be lemons, and no longer a far better deal than buying new.

https://en.wikipedia.org/wiki/The_Market_for_Lemons

This is true in cases where the manufacturer offers 5 year warranty with option to extend. We did just this recently ourselves and bought an 18 month old car. We still have a solid 3 years of factory warranty and can extend for an additional two if we so choose.

Some manufacturers only offer 3 years though with no option to extend so the value proposition is not nearly as good IMO if you're buying a vehicle with only a year left on the warranty.

Anyone ever buy a car off a car rental place (Enterprise, Budget, etc.)? They continually buy new cars, so they always have old inventory to sell, and they keep their cars in good condition. It seems that you might avoid both lemons and the immediate deprecation that way, but have a 'almost' new car.

Imagine if you went to buy a used car from Craigslist:

Q: Who drove this car?

A: Oh, whatever random people wanted to pay me money.

Q: What kind of maintenance did you do?

A: The bare minimum to get it to last a year.

Q: What options did you get?

A: The lowest ones the manufacturer would sell us.

Does that appeal?

Actually you can pretty much guarantee optimal maintenance, because all cars are on a schedule and regulated by the corporate office. Everything else is spot on. You'd be surprised about the % of used cars starting in a rental fleet, even if they aren't sold by those companies directly.

True, but on a new car with relatively low mileage, I would think maintenance is essentially oil changes and tire inflation, and maybe brakes if the car is really abused.

No more or less than any other used car, aside from going through a hundred owners. It's like comparing an apartment vs. a hotel room. No one I know gets freaked out over a nice hotel room.

It's risk vs. reward, to many people the increased cost of a brand new car is worth more than the risk of buying used.

Also, if you buy a car thats 2 or 3 years old you can actually figure out what is likely to go wrong with it, something you generally don't get with new cars (unless you're buying a model is about to be refreshed)

I generally find the maintenance required to keep the warranty generally exceeds the cost of repairs that might actually happen. It's not exactly rocket science to change air filters, oil, transmission fluid, and brakes.

The other thing about cheap used cars is when they break, you get a new one. I'm not going to spend $2k on a new engine, I'm going to buy a new car for $2000-4000.

I bought a 2009 Toyota Corolla a few years ago from Hertz. At the time anyway, their Rent-to-Own program gave you up to 3 days to decide on whether you wanted to keep it. The no-haggle price is given to you up front. In the meantime, you were renting it at their usual rate. If you returned it in less than 2 hours, you could get the rental fees fully refunded to you. In those 3 days, you would have plenty of opportunity to have a mechanic look it over for you, and for you to drive around for awhile and see if it suits you. If it doesn't, you return it and pay the rent. If it does and you buy, the rent is waived. You receive paperwork in the mail to sign and mail back, and you must have the money wired to them.

Things worked out well for me. The Corolla was a tad scruffy but otherwise presentable, and my mechanic gave it a clean bill of health (except for two of the tires being over-worn, which Hertz replaced). It's been a while, but I remember the price being ~$11k (4dr sedan, 43k miles, about 1.5 yr old), and all said and done came to ~$12k (taxes, titles, fees, what-have-you). The car was young enough and under-mileage enough to still be under manufacturer's warranty. The Hertz warranty was 60 days.

The 3-days rent is not much risk (maybe $200) versus $500 deposit most used car dealers want. This is probably not an easy way to go if you need to do this on a car loan. But if you can raise the cash, I think this is a good way to go.

I'd personally never buy a rental (how do I know though, they get sold at the same auctions that used car dealers attend too!) cause of how I treat them, but your experience mirrors that of a coworker which was good for him as well. He bought from Enterprise.

Agreed.

And many manufacturers offer an extended warranty on used cars. Buy a 1 year old "certified" car many times has a longer warranty than an identical new car at a lower cost.

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