Wednesday, October 9, 2019

The Golden Age of Cheap Used Sedans

I drive a 2008 Honda Element that's starting to get into the, "should I fix that?" stage of life. It's been pretty good and reliable for most of its life, but in recent years, it's required some major repairs. The parts for it are expensive compared to other vehicles. The cost per mile on it has been high compared to other Hondas I've owned. I'm getting closer to pulling the trigger on a replacement for it.

Used sedans are really cheap these days. Relatively low mileage cars that are just a few years old are sometimes 1/4 their original new price. You can buy a car that has most of its useful/trouble free life left for a small fraction of the sticker price. The average depreciation of a new car in its first year these days is something around $10,000. Another interesting facet of this market is "luxury" sedans end up in the same price bin as Civics and Accords and Camrys of similar age and mileage.

For the ultimate low cost per mile car, I think the recipe is: look up the model year for engine, transmission and other major problems. Lookup the total number of that particular model and variant sold and avoid oddball cars with unique parts. (My Element model, for example, sometimes requires parts shipped from Japan for repairs and it's pretty far from exotic.) Find a mid-mileage example from a private seller and pay cash.

I've been tempted to delve into the bargain/beater bin of old Lexus cars. In theory you'd have a car that doesn't depreciate and will be easy to repair, maintain, and resell, but it's too much of a pain to have a car break down every few months. If I didn't have to commute so far for my job I'd do it.

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