There are some that might suggest that one is better purchasing a used car for the price of a brand new Micra. Having taken that advice a decade ago with my previous car, I came to recognize a significant financial advantage in purchasing a two year old domestic car which had lost half of its value from its new price. The result was that I got to enjoy a nicely equipped car for a decade. However, I’m at a point where I can look retrospectively at my choice.
The alternative in 2004 that came closest to the Micra was the Toyota Echo which, at that price, would not have come with nearly as many features, but still would have had many of the features that mattered. After running the numbers, I discovered that, in the long term over the past 10 years, the Echo would have saved me more money, for many of the same reasons why the Micra will save money over comparably priced used cars today. Consider the following:
- Because the car was two years old, it already had two years worth of wear on its components. These involve wear and tear items like tires, brake components, the belt, wheel bearings, engine coolant, and the battery. This advanced my schedule for replacing and servicing these things by two years in comparison to the new car option, and, over a 10 year period, presented the possibility that I would have had to incur some of these expenses an additional time.
- Because the used car was a higher end model, parts like brakes and tires cost more. For example, I spent $30-$50 more per replacement tire, and a set of rear pads for the rear disc brakes cost over twice as much as would shoes for the rear drum brakes on the less expensive new Echo.
- Because my two year old used car had a more powerful motor and greater vehicle mass, it required more fuel. The difference in fuel economy over a 10 year period represented a significant expense.
That’s not all. When I buy a used car, I’m buying something someone else didn’t want to keep. It could be that whoever owned the car is wealthy and just wants to be in a new car every couple of years, or it could be that there was something about the car they didn’t like. Was it driven hard and abused? An on-going factory defect? There’s no sure way of knowing. These days, we might not know if a car had been in a flood or had been in an accident. Maybe it was driven up over a curb, fell off a jack? There are paid services like CarFax that can help us, but they only work if an accident had been reported. A new car provides peace of mind of knowing the entire history of a car. I’ll know for certain that the oil changes were all done on schedule.
When it comes to safety, I’m going to bank on the new car that comes with the full gamut of airbags, the latest technology in ABS, traction control, and steering wheel controls. Besides, I’m a believer that all accidents are preventable. I’ve been driving for over 25 years, and thanks to driving skill and paying attention, I had two minor not at fault accidents, or fender benders to be more accurate. I probably saved myself from serious accidents by leaving the cell phone alone, keeping my hands on the wheel and eyes on the road while paying full attention and looking down the road. All else being equal, a heavier car is safer than a lighter car, but all else isn’t equal, and there’s always variables that, when stacked up, demonstrate that proper car maintenance and driving skill matter most. I have the skill, and the Micra is an easy car to properly maintain.
With a used car, there’s just no sure way of telling if the savings will evaporate in running expenses. With a brand new Micra, which has earned a track record for economical ownership costs around the globe, I’ll be confident in the long term savings over the next decade.