A Cybertruck owner shares his frustration following multiple failed attempts to sell his truck. After losing more than $20,000 in 2,800 miles, the owner says, “I want to cut my losses and move on, but I can't give this thing away.”
If analyzed in purelly financial terms, buying a brand new car is almost invariably one of the worst investments there is compared to other options (if you really need a car, aim for a car which is 1 or 2 years), and if you couple that with taking a punt on a Musk product on the user side (not even the shareholders’ side but quite literally the side of the people the shareholders, most noteably Musk, want to extract money from, so pretty much the suckers’ side) AND, maybe worse, doing it as an early adopter, pretty much adds up to a guaranteed lubless shafting.
Investing in a “I’m a sucker” tattoo for one’s forehead probably has a better return.
buying a brand new car is almost invariably one of the worst investments
Because it’s not an investment. There is nothing wrong with buying a new car if you plan on keeping it. You get the original manufacturer’s warranty, no worries about a previous owner having been in an accident or not keeping up with routine maintenance, and often times you can lower your initial cost of ownership via dealer financing that’s below market rates because they’re willing to take loses there to move vehicles. Just a quick look, 2022 Toyota Corolla SE with 33k miles is selling for roughly ~$23k. A brand new 2025 Corolla SE is selling for ~$26k. If you need to finance it, you’re going to get better rates on the new vehicle vs the used. You’re getting 3 years worth of improvements and you’re getting a full manufacturer’s warranty and not just the balance of what’s outstanding on a 3 year old vehicle with 33k miles on it.
You could easily be paying 19 for the 2022 and if you have good credit you might not have any difference in interest rates and paying the same payment will pay 19 off faster than 26.
Almost every purchase for oneself is an investment, not in the Financial Investment sense of putting money expecting to get more money out but in the broader sense that we buy things because they provide some kind of value to us, which can be a utility value, tge satisfaction of an actual physical need, the pleasure one derive from using it or even just the pleasure of owning it
People don’t just buy things with no reason at all at any level, though often people buy things for the emotional reason that it gives them a jolt of pleasure to buy that thing (not exactly the smartest thing to do IMHO, but quite possibly one of the core pillars holding up present day Consumer Society).
So in that broader sense even the peace of mind you refer to as a justification for buying a new car has an actual value which can be expressed into a rough money range or, even better, the more personal “how long do I have to work to pay for the peace of mind of a new car instead of buying a 2 year old car”.
Further once you look at it that way, you start identifying which objective/need/feeling you’re trying to satisfy and figuring out other ways of satisfying it for less - for example if a car is expensive enough you can literally pay to have many possible used cars you are considering checked by a mechanic before you buy, have car histories checked, and buy an extended warranty, to get that piece mind you wish and still save up a lot of money (or, in another “currency”, a lot of days of work to earn that money).
In that broader sense, IMHO, new cars are generally a bad “investment” versus cars with a year or two because you’re paying a huge premium for a piece of mind you might get for much cheaper or might not even need because your fears are just be the product of being widely misinformed about the probability of problems in cars relative (I can tell you from a broader Engineering sense, the rates of problem in physical products in general tend to peak first when they’re new, then go down, then start going up again when they’re aged, which for something like a car would be 5+ year at least, though beware that I only know this rule as a general thing and don’t have car-specific knowledge on it beyond some vaguely remembered stuff I read over a decade ago) and of imagining the worst possible scenario in your mind about what problems a 2 year old used car can give you when the reality is that scenario in your mind is incredibly unlikely and you can buy stupidly cheap insurance to cover it.
In that broader sense, IMHO, new cars are generally a bad “investment” versus cars with a year or two because you’re paying a huge premium
That’s where I disagree with you though. There isn’t a huge premium vs a car that’s a year or two old. If you’re financing too, it could be more costly to buy a used car as you’d be paying higher rates on the financing. I agree with the sentiment that buying a used car is better but not one that’s just a year or two older. People have long been preaching that buying used is better than buying new and as a result, a lot of prices have crept up to the point that its less beneficial to buy used these days. COVID jacked up prices too and while they’ve gotten better on used cars, they still haven’t fully recovered.
That’s a good point on the financing side: a used car with about a year or two is well worth it if you have the funds to pay it outright without financing, but if you have to arrange financing yourself you’re not going to get as good rates as what the car makers can achieve thank to their bulk deals with Financial Institutions for the financing, which together with other factors (such as, as you pointed out, some cars not falling as much in price from new to used) might wipe out most of the benefit, at which point the difference might just be small enough that it’s worth the “peace of mind” value one gets from buying new.
My point is that just going direct for a new car without at least doing some legwork and seriously investigating second hand options is a bad move, since the cost of a car in terms of “how long do I have to work to pay for it” is pretty high for most people and thus its well worth it to spend many hours of one’s time doing some researching and evaluating before buying rather than going to the option that’s the most heavily pushed in advertising, because for such an expensive purchase even 10% price savings will quite likely well exceed the value of those hours (and the easiest thing to figure out upfront and with little time investment nowadays is if the used car market for the vehicles one is interested in is expensive and close to brand new prices or not, so one can quickly ditch “second hand” as an option if it turns out the market is pricing it too high).
Personally I haven’t bough a new car in more than a decade (I ditched my middle-age-crisis-mobile some years ago and switched to cycling and walking, but then again I’ve been living in urban areas in Europe so a car is not required and generally more of a hassle and money sink than anything else), but a year ago my dad got a great deal on a small second hand city car which was less than two years old (so it even had some manufacturer warranty time in it) which saved him a pretty penny, though that was in Portugal rather than the US.
If analyzed in purelly financial terms, buying a brand new car is almost invariably one of the worst investments there is compared to other options (if you really need a car, aim for a car which is 1 or 2 years), and if you couple that with taking a punt on a Musk product on the user side (not even the shareholders’ side but quite literally the side of the people the shareholders, most noteably Musk, want to extract money from, so pretty much the suckers’ side) AND, maybe worse, doing it as an early adopter, pretty much adds up to a guaranteed lubless shafting.
Investing in a “I’m a sucker” tattoo for one’s forehead probably has a better return.
Because it’s not an investment. There is nothing wrong with buying a new car if you plan on keeping it. You get the original manufacturer’s warranty, no worries about a previous owner having been in an accident or not keeping up with routine maintenance, and often times you can lower your initial cost of ownership via dealer financing that’s below market rates because they’re willing to take loses there to move vehicles. Just a quick look, 2022 Toyota Corolla SE with 33k miles is selling for roughly ~$23k. A brand new 2025 Corolla SE is selling for ~$26k. If you need to finance it, you’re going to get better rates on the new vehicle vs the used. You’re getting 3 years worth of improvements and you’re getting a full manufacturer’s warranty and not just the balance of what’s outstanding on a 3 year old vehicle with 33k miles on it.
You could easily be paying 19 for the 2022 and if you have good credit you might not have any difference in interest rates and paying the same payment will pay 19 off faster than 26.
Almost every purchase for oneself is an investment, not in the Financial Investment sense of putting money expecting to get more money out but in the broader sense that we buy things because they provide some kind of value to us, which can be a utility value, tge satisfaction of an actual physical need, the pleasure one derive from using it or even just the pleasure of owning it
People don’t just buy things with no reason at all at any level, though often people buy things for the emotional reason that it gives them a jolt of pleasure to buy that thing (not exactly the smartest thing to do IMHO, but quite possibly one of the core pillars holding up present day Consumer Society).
So in that broader sense even the peace of mind you refer to as a justification for buying a new car has an actual value which can be expressed into a rough money range or, even better, the more personal “how long do I have to work to pay for the peace of mind of a new car instead of buying a 2 year old car”.
Further once you look at it that way, you start identifying which objective/need/feeling you’re trying to satisfy and figuring out other ways of satisfying it for less - for example if a car is expensive enough you can literally pay to have many possible used cars you are considering checked by a mechanic before you buy, have car histories checked, and buy an extended warranty, to get that piece mind you wish and still save up a lot of money (or, in another “currency”, a lot of days of work to earn that money).
In that broader sense, IMHO, new cars are generally a bad “investment” versus cars with a year or two because you’re paying a huge premium for a piece of mind you might get for much cheaper or might not even need because your fears are just be the product of being widely misinformed about the probability of problems in cars relative (I can tell you from a broader Engineering sense, the rates of problem in physical products in general tend to peak first when they’re new, then go down, then start going up again when they’re aged, which for something like a car would be 5+ year at least, though beware that I only know this rule as a general thing and don’t have car-specific knowledge on it beyond some vaguely remembered stuff I read over a decade ago) and of imagining the worst possible scenario in your mind about what problems a 2 year old used car can give you when the reality is that scenario in your mind is incredibly unlikely and you can buy stupidly cheap insurance to cover it.
That’s where I disagree with you though. There isn’t a huge premium vs a car that’s a year or two old. If you’re financing too, it could be more costly to buy a used car as you’d be paying higher rates on the financing. I agree with the sentiment that buying a used car is better but not one that’s just a year or two older. People have long been preaching that buying used is better than buying new and as a result, a lot of prices have crept up to the point that its less beneficial to buy used these days. COVID jacked up prices too and while they’ve gotten better on used cars, they still haven’t fully recovered.
That’s a good point on the financing side: a used car with about a year or two is well worth it if you have the funds to pay it outright without financing, but if you have to arrange financing yourself you’re not going to get as good rates as what the car makers can achieve thank to their bulk deals with Financial Institutions for the financing, which together with other factors (such as, as you pointed out, some cars not falling as much in price from new to used) might wipe out most of the benefit, at which point the difference might just be small enough that it’s worth the “peace of mind” value one gets from buying new.
My point is that just going direct for a new car without at least doing some legwork and seriously investigating second hand options is a bad move, since the cost of a car in terms of “how long do I have to work to pay for it” is pretty high for most people and thus its well worth it to spend many hours of one’s time doing some researching and evaluating before buying rather than going to the option that’s the most heavily pushed in advertising, because for such an expensive purchase even 10% price savings will quite likely well exceed the value of those hours (and the easiest thing to figure out upfront and with little time investment nowadays is if the used car market for the vehicles one is interested in is expensive and close to brand new prices or not, so one can quickly ditch “second hand” as an option if it turns out the market is pricing it too high).
Personally I haven’t bough a new car in more than a decade (I ditched my middle-age-crisis-mobile some years ago and switched to cycling and walking, but then again I’ve been living in urban areas in Europe so a car is not required and generally more of a hassle and money sink than anything else), but a year ago my dad got a great deal on a small second hand city car which was less than two years old (so it even had some manufacturer warranty time in it) which saved him a pretty penny, though that was in Portugal rather than the US.
100% agreed there.