Blue Book For Used Cars

Q.My wife is planning on spending roughly $15K on a car, and I suggested that rather than buying a new Honda/Saturn/whatever, she consider buying a nice used car. Cars that come to mind include: ~1985 Mercedes 3** S*, 1986-88 BMW 5 Series, 1987 Cadillac Allante, etc. Basically, a nice ride... In any event, I have little knowledge of such beasts and would appreciate any opinions or experience that people have had.

A.Except that you are NOT getting a new car. You are getting a USED car that is close to a year old and has several thousand miles on it (and all bets are off as to whether or not it was properly broken in). That's fine except for the fact that you're paying what is essentially a NEW car price (i.e. you're paying well above blue book value). It's a good deal - for the *seller*. Let's look at a hypothetical situation: You buy a new car. Let's say you get a good deal and pay X, which works out to be $50 over the dealer's invoice price. As soon as you drive it off the dealer's lot, its value drops by a large amount (15%? 20%? I forget what it works out to be). For the sake of argument, let's say it's now worth 15% less than what you paid, or 0.85X. Let's now say you drive it for 9 months and put 5,000 miles on it (mostly short trips in which you let your friends drive it around the block). Now let's say you get tired of it, and decide to sell it. According to the used car pricing blue book, your car is worth maybe 80% of what you paid for it originally, it's definitely used (although still in terriffic shape), and you manage to sell it for 0.8X. Not too bad for you. Now, suppose you could take that same car and sell it to someone as if it were still new. This would mean that instead of a used car price, you could charge a higher price, say 0.9X. The car is still used, it still has 5,000 miles on it (which is 5,000 more miles than a truly new car would have) yet you're making an extra 10% or so on the sale. Great for you, right? This is EXACTLY what car dealers are doing. A car with 3,000 or 5,000 or 7,500 miles on it is USED. It has depreciated, it has wear and tear, it has been sitting and driving in the sun and rain and snow for months. Yet the car dealers have conned the public into paying more for these vehicles than they should by calling them "Demos" instead of "Used" as they really are. This is similar to the con job that the big car rental agencies pull when they sell off their rental fleets - they plant an image in the customer's mind that their cars are somehow "better" than other used cars and therefore worth a hefty premium. And people buy it (literally!) To the original poster: if you want to buy a used car, then buy a USED car. Something 1-1/2 to 2 years old that hasn't been abused is an excellent deal. The major depreciation hit has alredy been taken (by the original owner), but the car is still nice, shiny, dependable, and above all it's a lot cheaper than a new car (which is, after all, the true goal here, right?) Demos and former rentals/fleet cars are a ripoff.

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