Thursday, June 11, 2020

Thinking of going with a new Civic or Corolla

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I was set on buying a used 1-3 year old car with low miles as I've read suggested at many places but I am leaning on going with a new Civic or Corolla as I continue my search for the best prices. Tell me I'm dumb or if my logic makes any sense.

A little bit about myself and my spouse:

  • lates 20s
  • $50k saved up in cash
  • just started learning about IRAs and put $3k into each of our accounts
  • No CC debt
  • No cars right now
  • Wife has student loans from a grad program and pays about $300 each month
  • The big one...I don't have loans now but I am about to start medical school which is expensive. I am going to my state school which is one of the cheapest schools in the country and even then it's like $50k a year. The residencies I am interested are around 3 years or so. The plan is to take out loans for tuition but use our savings and wife's income ($40k approx) for living expenses. Luckily we are moving to a low COL area where rent runs about $1k for a 2 bedroom or large 1bedroom whereas our current place in a high absurdly high COL city is $1600 for a studio with no windows and no air circulation
  • We will try to get by on one car by trying to live near my school or near her work so one of us can walk or bike.

So why am I even considering a new car over a used one when I am about to go into debt for school?

1) We've had no luck finding the magical sub-$5k car that many drive for $300k miles. We also don't want a beater. The cars we've run into have some issues or the person is shady or is in a used car lot with a dozen other beaters. If we can find someone we know personally or a mutual friend we'd feel comfortable purchasing the car.

2) CPO cars are our favorite right now. Used so cheaper than new. The weird thing is that I was expecting a steep discount but the price between a new and 3 year old civic with 20-30k miles is like $4k. The diff between a CPO corolla and new one is like $3k. I also thought CPO cars came with the extended warranty but I just ran into 2 dealerships that charged about $1-2k for the warranty and in that case a new car is only $1-2k more.

3) None of the CPO Civics or Corollas have the new safety features like collision mitigation, lane assist, and so on. I don't care much for the features but my wife is a brand new driver so this is a big selling point.

4) We plan to drive this car for at least 10 years. We won't sell the car in 5 years. This is a sure bet. Won't be getting a new car during the 4 years in school and 3 or so years in residency. Then got to pay those loans so I don't see myself offloading this car for 1-2 years after I become an attending.

5) Check with Geico and asked for quotes using VIN numbers for a new car and CPO and the cost per month is only different by $3.

Am I being delusional? A $5k used car obviously is the best value and we are looking. A CPO car is also cheaper than new if we're looking at numbers only but the cost diff isn't much compared to new.



Submitted June 11, 2020 at 11:14PM by Snoo-87701 https://ift.tt/2Uy4Fw3

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