I bought a new car below dealer’s invoice
Posted by Frugal on September 21st, 2007
I have been thinking of getting a new minivan because my old camry is getting really old, and things are starting to break down. With my friend’s help, we both each bought a new 2007 Honda Odyssey. Before tax and fees, we paid roughly $23,900 for the car, which has a price of $24,584 from carsdirect.com, an invoice price of $25,846 from Yahoo, and a MSRP of $29,330.
Why did I choose this car? I have been extremely busy at work, so I simply relied on my friends’ advice for the choice of car. In fact, I only spent part of the last 3 days shopping for the car. Because my friend told me that both Toyota and Honda have a promotion going on, with manufacturer rebating the dealer about $2000 if a sale is made before the end of September, dealers have more rooms to go down in price. And with Honda, you can easily request price quotes via internet at the honda.com website. So it made the price comparison much easier. At the end, my friend was able to solicit 3 different quotes all within $100 of each other. With the housing market slowdown, the inventory at dealers is definitely significant. Price concession is certainly easier, especially for 2007 models.
Certainly car prices have been going down after adjusting by inflation. I’ve paid almost the same amount for my old camry, some 10 to 15 years ago. And now I’m paying about the same price for a minivan. The power of technology brings deflation, and improves life quality. Relative to housing price, cars are getting quite insignificant these days.
P.S. I will adjust my net worth by the amount that I’ve spent on the new car through a period of a month or two. I will be putting a value of $0 for my cars, since I consider that is money spent already.
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September 21st, 2007 at 10:17 am
That’s really strange! I have been sold on getting “slightly used” cars ever since I bought my current car for $17,300 when a new one was going for $24,000, and my car had only 9100 miles on it. I thought, “why buy new when you can buy only slightly used and still get a good deal?” But your new Odyssey cost about the same as a used one with over 30,000 miles on it. Slightly used ones on cars.com were going for more than you were paying. I’ll be in the market for a car again next year, and I may hve to re-think this “slightly used” strategy. Interesting!
September 21st, 2007 at 10:17 am
That’s really strange! I have been sold on getting “slightly used” cars ever since I bought my current car for $17,300 when a new one was going for $24,000, and my car had only 9100 miles on it. I thought, “why buy new when you can buy only slightly used and still get a good deal?” But your new Odyssey cost about the same as a used one with over 30,000 miles on it. Slightly used ones on cars.com were going for more than you were paying. I’ll be in the market for a car again next year, and I may have to re-think this “slightly used” strategy. Interesting!
September 22nd, 2007 at 1:26 am
“Slightly used” strategy works great I believe, since new cars depreciate very fast. My only problem is that I don’t know cars well at all, and I can hardly tell a lemon from a good car.
And if you want to buy minivan/SUV, I would advise not to buy a slightly used car. I’ve heard true stories of “slightly used” mini-vans that are actually 200,000 miles previously used for commercial airport transportation. Yes, they are just 1 year old, but they are also driven for 200K miles back and forth to airport, except it’s not showing on the odometer (which is a crime of course).
Just be careful.
September 22nd, 2007 at 10:06 am
I hate to point this out, but you did buy a used car. It doesn’t have any miles on the car, but it is already one year old. Also, taxes and fees should be considered when comparing prices of the new car against prices for a used car.
September 22nd, 2007 at 1:00 pm
It doesn’t matter used or new as long as you paid cash!
September 22nd, 2007 at 4:01 pm
Frugal,
You are really frugal, with the asset you have cumulated so far, you should be able to get a better one. Why so frugal?
David
September 25th, 2007 at 4:15 am
Here in AZ it makes sense to buy used cars from private owners, as that avoids the need to pay sales tax. As far as judging the good ones from the lemons, I usually pay under $100 for a thorough inspection at a dealer for peace of mind.
September 25th, 2007 at 2:38 pm
I think used is the way to go. If you spend just a little time shopping you will find a good deal, and inspections are cheap when considering the total price.
November 12th, 2007 at 4:23 am
I think buying nearly new really is the way to go. That way someone else has run the car in a bit and hopefully sorted any manufacturing problems. Plus you don’t get hit with all that depreciation when you drive off the showroom floor.