Buying a second (actually third) car.

At some point over the next year we will probably need another car.  My oldest son needs daily transportation back and forth to school about 50 km away and my second son is just over a year away from getting his drivers permit.

I was toying with the idea of getting myself a new car next year but I want to move up to a compact luxury and to get one with the same options as my Optima gets a bit pricey, even for leasing as mentioned in my previous post, so I think I will put that plan on hold for maybe two or three years (subject to change as usual).

There are two basically three options to choose from:

1) Buy a used beater and hope they get some good use out of it
2) Buy a gently used decent car
3) Buy a new car

I am thinking a compact sedan would be best, the sub-compacts almost seem too small and there are a lot more compact sedans to choose from, especially used.  There is also not a big price difference between the two but you can actually fit full sized humans in the back of most compacts, not so much with the sub-compacts.

Obviously the first stop is Kijiji to see what is out there in the used car market.  There are usually about 1,000 sedan type cars for sale at any given time.  The most abundant being in order Chevy, Toyota, Hyundai, Pontiac, and Honda.  So here are a few problems with that list..... I would never buy a used Chevy for starters, you just don't hear anything good about them.  Hyundai models before the restyling in 2011 are just plain ugly, the Accent hatch is not too bad but not great either.  Pontiac.... well since they no longer exist I would stay away from them as well.  Toyota only has the Corolla, Matrix or Yaris in smaller cars.  The Corolla will last forever, but it's just soooooo boring looking.  There is no way I can have a pink or beige Corolla parked in my driveway.  Next on the list is Honda, you really can't go wrong with a Civic, the problem is that used Civics are fairly expensive.

Then you have the Kia, Mazda and Fords.  Like the previous generation Hyundai, the Kia's just look so dated, although the Rio5 does not look too bad and can be had fairly cheaply.  The Mazda 3 makes for a good used car, the only problem there being we already own one and I can't have two of the same car.  As for Ford's, I wouldn't buy a used one.

If you look at the pricing of the used 2010 Civics, they are on dealer lots from about $12,000 - $14,000 with 40,000 km and up.  A 2013 Civic LX goes for $21,000 including delivery and pdi, so for about $8,000 you get a three year newer car with full warranty, no possible problems from previous owners, all the latest car gadgets and lower interest rates.

When buying used most times the rates are similar to bank rates, around 6% over 5 years.  Most new car rates now range from 0% (like my optima) to 3%.  Right now the 5 and 7 year rates on a 2013 Civic is 1.99%. Also, if you are so inclined you can get longer term loans on a new car to bring down the monthly payment.  The longer term and lower rates help bridge the gap between new and used.

There are a lot of things to consider and while conventional wisdom is that its always better to buy used since a car loses 15% - 20% of it's value once it leaves the lot, try to buy a one day old car for 20% less than a new one........  There is a lot of upside to buying new.

To be continued..... and I'm sure I'll change my mind 100 times by the time we get something.