Is the used car I'm looking at as good a deal as it seems?
I have been driving a 1985 Cutlass Ciera for the last 10 and a half years.
The car has 170,000 miles on it and is in terrible condition (no air or
heat, no horn, no headliner, no radio, lots of dents, and quite rusty). At
least one neighborhood where I parked people were concerned that someone
had abandoned a car in front of their nice homes.
I devote much of my time to work and education and feel like I "deserve" a
nice car. I have zero haggling skills, blond hair, a penchant for casual
dress and no discernible signs of mechanical acumen. I've done some
shopping and decided I'd like a 1995 Mitsubishi Diamante LS four-door sedan
with less than 30,000 miles on it. I've figured out that a fair price for
the car I want with the options I desire is about $19,000. What I don't
understand is why the 1997 model (which is advertised as costing less than
the '96) is priced at $30,000. Saving $11,000 by buying a 2-year-old car
seems to me to be quite a savings. Is it too good to be true, or does the
value of a car really drop that sharply in the first two years? --
RAY: For someone with no discernible signs of mechanical acumen, you sure
are pretty smart when it comes to cars, Marguerite. You want to pick out my
next car for me?
TOM: I endorse your choice 100 percent. Not only is the Diamante a very
nice car, but buying a 2- to 3-year-old car is about the most economically
sensible thing you can do.
RAY: We wrote a lengthy pamphlet on this subject, because we can't fit all
of our used car knowledge in a single column (if you're in the market for a
car, you can get a copy by sending $3 and a stamped (55 cents),
self-addressed, No.10 envelope to Used Car, PO Box 6420, Riverton, NJ
08077-6420). But suffice it to say it's NOT too good to be true at all.
Cars depreciate the fastest in their first two to three years. Why? Because
they're not "brand new" anymore. After a few years the warranty is running
out, the car has a few scratches or dings here and there, and the new-car
smell has probably evaporated.
TOM: But if you can deal with those "hardships," you get a practically new
car for about two-thirds the price of a new one, which is pretty terrific,
in our estimation.
RAY: Right. There are some things you certainly don't want to buy used --
like a toothbrush or underwear. But some "used" things, like cars and
houses, can have a lot of useful life left in them, if you pick a good one.
TOM: Our only warning is to be sure to have any car thoroughly checked out
by a good mechanic before you buy it. While, in theory, a 2-year old car is
a great buy, you want to be sure THIS 2-year-old car is a great buy, and
only a mechanic can tell you that. Get a good one and enjoy your new