Is it a bad idea to buy a 5 year old car?
New cars are so reliable that, on average, one could be expected to remain trouble free for years at a time. A five-year-old car may encounter a problem every three years. Even 10-year-old cars would only be expected to have a problem every 18 to 20 months on average.
How many miles is too much for a 5 year old car?
To determine whether a car has reasonable mileage, you can simply multiply 12,000 by its age. That means good mileage for a car that’s 5 years old is 60,000. Significantly more or fewer miles could indicate a problem or trouble in the future.
How much will a five-year-old car cost you?
A five-year-old car will typically have lost around 60\% of its value. So, our $30,000 example vehicle can be yours for around $12,000 five years down the line. Vehicle models depreciate at different speeds. Luxury sports vehicles, for instance, have a high rate of depreciation because the typical buyer always wants the newest model.
Is it worth it to buy a car that is 2-3 years old?
After that, depreciation still happens, but at a slower rate. Taking these figures into account, buying a vehicle that’s 2-3 years old means you’re getting a nearly new vehicle while taking none of the depreciation hit yourself.
Should you buy an older or newer car?
Even further savings can be made if you purchase an older vehicle. A five-year-old car will typically have lost around 60\% of its value. So, our $30,000 example vehicle can be yours for around $12,000 five years down the line. Vehicle models depreciate at different speeds.
Is it worth it to buy a used car?
Just like your home, a car has many components each with different replacement costs and life expectancies. As a car ages, each component gets closer and closer to its expiration date. This means you can expect to have higher maintenance and repair costs for an older vehicle, all else equal. Buying used can save you a lot, but is it worth it?