New Car vs Used: Total cost of ownership

Total cost of ownership greatly depends on what you’re buying.

I've always gone for certified preowned used vehicles that are 2-3 years old with 30k or less miles. Seems to be the sweet spot in terms of price/depreciation/condition/value, and still keeps you under the 3yr/36k mile threshold that they like you to be at to qualify for extended warranties

I got a 2022 F150 Platinum Ford gold certified with 19k miles back in March. Paid $48k and some change for it before trade-in and downpayment and shite. I was definitely blindsided by the interest rate they got me though. 7.94% with 806 credit score. Not a big deal since I always pay my shite off in 2 years or less, but was still shocked to hear that figure.

In the process of buying a new SUV right now. Two reasons we are going new:

We want the newest possible because we are keeping this thing until the wheels fall off.

My wife knows exactly what she wants, and the slightly used market for this vehicle isn't far enough away in price to justify it. 2023 models with between 10-15k miles are listed for only 4-5 grand less. That's not enough difference to me considering how long we plan to keep it.

With how easy it is to find a blogger or YouTuber that obsesses over some mundane question, I’m surprised this isn’t studied and documented somewhere.

For one thing, what do you consider the useful lifetime of the vehicle. 10 years? If so a 3 year old vehicle has to be at least 30% less than new. Do the same exercise for mileage. This is the crudest way I know of. Of course, you may have to factor in interest rates. Is peace of mind worth anything (that a newer vehicle will be less prone to issues for a longer portion of ownership)?

I’m pretty tight and each time I test this all out, I end up going new (but a new one that I felt like I could negotiate on).

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Same here. I like to know how it's been driven and the cost in recent years hasn't made a lot of financial sense for me.

We tend to drive a ton of miles in 5-8 years of ownership.

We have 2 cars, 5 years each with 135k on one and 90k on another.

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I would actually argue buying used would be a much better scenario here. If you're driving cars into the ground quick, why pay the max depreciation?

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seems like with the passage of time the gap between new and used rates is getting bigger and bigger.

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As the prices of new vehicles come down to (hopefully) more “realistic” levels, people will be forced to accept lower offers on used vehicles. I’m hoping this happens soon because my teen will be getting something in a year or so.

But I’ve been waiting on this price drop for years now.

Check out the certified used prices of the make/model you desire. You generally get a very good warranty, the vehicle has completed a thorough inspection, and you save thousands.

I can only cite our two experiences where we bought a 17 Acura RDX, certified with 7k miles. Saved about $8K vice new car price, and we have had NO issues with it other than routine maintenance. Did the same with a 22 Toy Tundra, saved about $4-5K going with a certified truck with 5K miles. It has been a great truck, and they are still providing the free oil changes & tire rotations.

It probably depends on what you can afford and what you are using the car for, daily driver that you are going to put 40-50 miles on I'd probably go used and wear it out.

I recently paid cash for a new F150 but I work from home and will only put about 5K miles a year on it.

I plan to get 10 years out of mine

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For some cars like Acura and Lexus you can pay around 50-60% of the original purchase price for the three year old vehicle.

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This is more like cars that actually depreciate like a rock. Not many lose 40-50% of their value in just 3 years. Maybe some american and european vehicles here and there...definitely not Honda/Toyota products.

You could expect to pay roughly 30% less for a 3 year old Lexus/Acura/Honda/Toyota than brand new in general. Some specific vehicles will be different but unless something has absolutely crazy mileage or has been lemon'd/rebranded title issues on it in 3 years you're not getting 50% off a 3 year old Acura/Lexus.

I can tell you from experience a $50k-$55k MDX from 3 years ago is not going for $25k-$27k today

We got my wife's 2022 MDX earlier this year for $40k and it was a $53k-$54k vehicle brand new.

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The gap between used and new today is not a large one. From what I've been seeing, 5-10k or so.

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Pricing has come way down over the last year+ or so on used vehicles, its not anything like it was 1-2 years ago.

Average transaction price on used is $27.4k this month. A year ago it was $29k, 2 years ago it was $30.5k. It was $31.6k at its peak back in August 2022.

Thats a very big decrease especially when you consider how much WAY more expensive new carsd have gotten over the last few years. Practically every model has gone up and gone up pretty substantially.

A 2020 F-150 XL started at $28.5k. For 2025 it's now over $37k. Trucks have done this across all the brands. Silverado saw a similar jump. $40k used to buy you a pretty solid spec'd truck people wanted. Now you're spending in excess of $50k easy.

Like I said above, we got my wife's 2022 MDX earlier this year for about $13k-$14k less than a brand new was, or about $16k less than an equivalent 2025 model.