New vs. Low Mile Used

jm91rs · Aug 16, 2014

Hi All,
I'm waiting for September 3 to roll around to see if there are any purchase incentives on 2014. If there are not I can't wait any longer and will try to work my best deal on a 2015 or possibly consider some of the low mile (under 10,000) vans I've seen on lots. Someone help me understand the pricing on these very low mile vans. At one dealership I found the price on a new exl and walked next door to the used car lot where they wanted more for a 4000 mile used one. They said the "certified" honda warranty made it more valuable than new, which I know is complete BS. Someone must be paying these prices because dealers all over are asking darn near new prices for their used vehicles, and they all point the Honda Certified Warranty as a reason. I'm certainly not willing to pay more for a used vehicle, but I would accept a used one for the right price. I'm thinking at least 10% less than the best deal I can get on the same thing new (Basically I'll lose at least that value the minute I drive the new one off the lot anyway). This would assume under 10,000 miles, and absolutely flawless new condition. Any opinions? Don't go by what edmunds, etc says they're worth, I find that on these slightly used vehicles their price is always higher than what I could buy a new one for.

bobodaclown · Aug 16, 2014

I understand your frustration. New ones come with factory offered incentives, those don't affect the dealers bottom line. Used vehicles are strictly profit/loss for the dealers (no rebates/incentives). Depending on where the dealer got the vehicle (trade in/auction) will determine how much he's got into it. Then add in the inspection for "certified" rating.
Honda Certified Pre-Owned Vehicles - Warranty Information
Certified Pre-Owned - Wikipedia, the free encyclopedia
What Are Certified Used Vehicles?

Some one has to cover those cost. I'd go with a private party, with a good inspection. (Actually that's what I did.)

BigBoat · Aug 16, 2014

My ignorant guess is that dealers also do it in part as a marketing/negotiation ploy to show potential buyers of a new car the resale value of it used. After a few weeks, if no buyer buys into the certified mambo jumbo, the car gets rotated to another dealership or sold to a used car dealer for less (without losing, I bet they got the pre-certified vehicle on the cheap as a trade-in or similar). Used car sales is not their main business IMO, they just need them to move their inventory.

ProudPaPa · Aug 16, 2014

My wife and I just went through the same decision, buying 2-3 weeks ago. It seem to us, as long as you're going to hold onto the vehicle for many years, that there was no significant long-term financial benefit to buying a low-mileage/recent used vehicle. Coughing up the dough for the new purchase, however, is certainly not insignificant!

There were some helpful thoughts on evaluating new vs. used (particularly by pkrface) in my intro thread HERE that I would recommend you check out. I had a big spreadsheet tracking various used vehicles price, mileage, and several cost/mile numbers based on how many miles we'd put on the vehicle. Used was often more expensive, over the shorter life of the used minivan, in the end. Plus, there was always the uncertainty that comes with a previously-owned vehicle.

Also, remember that the '14s & 15's are not the same vehicle as the '11s-'13s. The frame is different, and the '14 is the first minivan to get the highest rating on the newer "limited overlap" crash test. We thought that the keyless entry was basically a marketing gimmick, but already love it with less than a month of use. As a result, we may be changing the lock on our front door to keyless as well!

It took some budget crunching for us to get around to the new vehicle purchase, but with Honda's 0.9% financing, that worked out okay too. Once we were ready to purchase, I called ~10 dealers to get the email of their internet sales manager. With that, I got total "Out the Door" quotes from 7. I then re-emailed with the best offer to see who could beat it. That definitely set the market, and saved us some money. (I basically followed THIS advice, other than skipping the TruCar value, which was higher than our purchase price.) We decided not to wait for September (just our personal needs/timing) and we're really happy thus far.

I hope that helps... Happy shopping!

II Kings 9:20 · Aug 16, 2014

After looking at low mile used prices, getting new is a no brainer. Deep discounts and nerly free 0.9% money is begging you to take it.

As mentioned above, Keyless entry and start is brilliant. MB started that in the late '90s with their "Keyless Go". Keys are so 100 years ago.

Public Service Announcement:
Beware with Keyless start: People in a rush forget to shut the car off in a garage and CO poisoning deaths have occurred. Numerous articles on google

Make sure you shut it down, it even beeps to let you know you left it running. There is a class action against Toyota in part because there is not an auto engine shut off timer if it is left running and several deaths have occurred.

With Keyless or any chip key, bring the spare fob with you on trips. Otherwise, if you lose your fob or it malfunctious, you're not getting home until the dealership opens on Monday (of course, it will hapen on a Saturday eve just before the Sunday trip home).

OdysseyTE · Aug 16, 2014

jm91rs said:
Hi All,
I'm waiting for September 3 to roll around to see if there are any purchase incentives on 2014. If there are not I can't wait any longer and will try to work my best deal on a 2015 or possibly consider some of the low mile (under 10,000) vans I've seen on lots. Someone help me understand the pricing on these very low mile vans. At one dealership I found the price on a new exl and walked next door to the used car lot where they wanted more for a 4000 mile used one. They said the "certified" honda warranty made it more valuable than new, which I know is complete BS. Someone must be paying these prices because dealers all over are asking darn near new prices for their used vehicles, and they all point the Honda Certified Warranty as a reason. I'm certainly not willing to pay more for a used vehicle, but I would accept a used one for the right price. I'm thinking at least 10% less than the best deal I can get on the same thing new (Basically I'll lose at least that value the minute I drive the new one off the lot anyway). This would assume under 10,000 miles, and absolutely flawless new condition. Any opinions? Don't go by what edmunds, etc says they're worth, I find that on these slightly used vehicles their price is always higher than what I could buy a new one for.

Yep, pretty much how Odysseys are valued on a secondary market. When I was shopping for my then 2011 Ody I came across a 2009 Touring (older body) with 36,000 miles at a Mercedes dealership. Dealer wanted $31,000 for it after some talking they agreed on $30,500 and not a penny less. Needless to say I walked away and purchased a brand new 2011 EX-L for $33,000.

Sienna on the other hand can be had for much less.

pkrface · Aug 17, 2014

BigBoat said:
My ignorant guess is that dealers also do it in part as a marketing/negotiation ploy to show potential buyers of a new car the resale value of it used. After a few weeks, if no buyer buys into the certified mambo jumbo, the car gets rotated to another dealership or sold to a used car dealer for less (without losing, I bet they got the pre-certified vehicle on the cheap as a trade-in or similar). Used car sales is not their main business IMO, they just need them to move their inventory.

Well, you have the ignorant part right

Sorry, just couldn't help myself lol.

As somebody in the business I can assure you that all your assumptions are wrong.

Why can they sell them so close to new price and sometimes the same or more? Because not all customers are paying attention and sooner or later, usually sooner, someone comes by with the mindset that because they are buying used they are saving significant money. A very small percentage of buyers have any idea how much more a new car is or how much less a used car is and the rest of them just buy what they are going to buy. Go do the research on a late model Honda or Toyota via KBB or TrueCar and see what they say is a good price for used '13 vs new '14 and you will see that the data supports what I am saying. As for constantly rotating cars to anther dealership or sold to a used car dealer, almost never with late model (within 3 years of current). A cars value is continually dropping, so while its true that the initial hit when you drive off the lot is the biggest, every day that a used car sits in a dealers inventory it is worth less than the day before with rare exceptions where market trends are going the other way, but in any event a car is always worth more retail than it is wholesale, so a dealer just marks it down and/or incentivises the sales people enough to find a buyer. And yes, sometimes they lose money, but usually it is measured in hundreds rather than thousands of $$.

The majority of the year old or current model year cars come from rental fleets, are loaners, etc. The reason dealers don't negotiate on them very much is there just isn't much margin available. With people able to easily shop a 50 or 100 mile radius you have to keep the pricing competitive or you won't be moving cars.

Now for the concept that "used car is not their main business". Far from the truth. Yes, the franchise sign is extremely valuable to drive customers to the business, just like a major hotel chain compared to no name motel, but dealerships would go broke (as would sales people) selling only new cars. Used cars are one of the profit centers, as are the service and parts departments. We give away new cars to get the trade in so we can make money.

BTW, only franchised dealers can sell "certified" cars, but there are pretenders.

pkrface · Aug 17, 2014

OdysseyTE said:
Yep, pretty much how Odysseys are valued on a secondary market. When I was shopping for my then 2011 Ody I came across a 2009 Touring (older body) with 36,000 miles at a Mercedes dealership. Dealer wanted $31,000 for it after some talking they agreed on $30,500 and not a penny less. Needless to say I walked away and purchased a brand new 2011 EX-L for $33,000.

Sienna on the other hand can be had for much less.

In your case not an exact apples for apples comparison with the Touring vs EX-L, but when we bought our '06 EX-L the best comparison deal I could find was an '05 EX-L with 18K miles for $27,900. I paid $28,200 ($31,300 list) for brand new with the same equipment, only $300 difference. Not saying a deal worth having on a used year or two old can't be had, but look very closely if there is significant savings. Probably a good reason like an accident, smoked in, etc.

OdysseyTE · Aug 17, 2014

pkrface said:
In your case not an exact apples for apples comparison with the Touring vs EX-L, but when we bought our '06 EX-L the best comparison deal I could find was an '05 EX-L with 18K miles for $27,900. I paid $28,200 ($31,300 list) for brand new with the same equipment, only $300 difference. Not saying a deal worth having on a used year or two old can't be had, but look very closely if there is significant savings. Probably a good reason like an accident, smoked in, etc.

Perhaps not exactly apple to apple however for $2500 more I got a brand spanking new next gen van with 0 miles, full warranty and no fart spots in the seat. The pros of the new van heavily outweigh the pros of the older van. Money well spent in my book.

I bet if they were selling a used 2011, price wise it would be extremely close to a new, since these vans were in such demand that people paid full MSRP to just get one.

BigBoat · Aug 17, 2014

pkrface said:
Well, you have the ignorant part right Sorry, just couldn't help myself lol.

As somebody in the business I can assure you that all your assumptions are wrong.

Why can they sell them so close to new price and sometimes the same or more? Because not all customers are paying attention and sooner or later, usually sooner, someone comes by with the mindset that because they are buying used they are saving significant money. A very small percentage of buyers have any idea how much more a new car is or how much less a used car is and the rest of them just buy what they are going to buy. Go do the research on a late model Honda or Toyota via KBB or TrueCar and see what they say is a good price for used '13 vs new '14 and you will see that the data supports what I am saying. As for constantly rotating cars to anther dealership or sold to a used car dealer, almost never with late model (within 3 years of current). A cars value is continually dropping, so while its true that the initial hit when you drive off the lot is the biggest, every day that a used car sits in a dealers inventory it is worth less than the day before with rare exceptions where market trends are going the other way, but in any event a car is always worth more retail than it is wholesale, so a dealer just marks it down and/or incentivises the sales people enough to find a buyer. And yes, sometimes they lose money, but usually it is measured in hundreds rather than thousands of $$.

The majority of the year old or current model year cars come from rental fleets, are loaners, etc. The reason dealers don't negotiate on them very much is there just isn't much margin available. With people able to easily shop a 50 or 100 mile radius you have to keep the pricing competitive or you won't be moving cars.

Now for the concept that "used car is not their main business". Far from the truth. Yes, the franchise sign is extremely valuable to drive customers to the business, just like a major hotel chain compared to no name motel, but dealerships would go broke (as would sales people) selling only new cars. Used cars are one of the profit centers, as are the service and parts departments. We give away new cars to get the trade in so we can make money.

BTW, only franchised dealers can sell "certified" cars, but there are pretenders.

Good stuff, but I thought we were talking about Honda specific dealerships, and more specifically about the Odyssey. For example the comment about the majority of the of the year old or current model year cars come from rental fleets, are loaners, etc. would not really apply in the case of the Odyssey in my opinion, I'm yet to see a fleet/rental Odyssey, and the stats confirm it:

2012 Fleet Sales (commercial, government and rental) Registrations as compared to Total Registrations

Odyssey: 1.8%
Chrysler T&C: 35.5%
Toyota Sienna: 14.8%

affb13car-reg.pdf - Statistics - Automotive Fleet

Anyway, tough to really have a definite answer for the Odyssey, I guess the summary of story here is to do your homework when shopping

ishtori · Aug 17, 2014

I never see a point of buying a low milage honda/toyota unless you are willing to go older to previous model year. There isn't much price difference and the little money you did save is going to pay toward a higher finace rate, if you are financing.

pkrface · Aug 17, 2014

OdysseyTE said:
Perhaps not exactly apple to apple however for $2500 more I got a brand spanking new next gen van with 0 miles, full warranty and no fart spots in the seat. The pros of the new van heavily outweigh the pros of the older van. Money well spent in my book.

I bet if they were selling a used 2011, price wise it would be extremely close to a new, since these vans were in such demand that people paid full MSRP to just get one.

The only reason I made the point is that the customers that do their research and decide to go used is because generally a 2 year old car can be financed for the same term and only a slightly higher if not the same interest rate, so with $2500 = to roughly $50 a month in the payment that might make the difference for them being able to handle the payment. Not that it makes economical sense, but from a payment stand point it may for certain buyers.

BigBoat said:
Good stuff, but I thought we were talking about Honda specific dealerships, and more specifically about the Odyssey. For example the comment about the majority of the of the year old or current model year cars come from rental fleets, are loaners, etc. would not really apply in the case of the Odyssey in my opinion, I'm yet to see a fleet/rental Odyssey, and the stats confirm it:

2012 Fleet Sales (commercial, government and rental) Registrations as compared to Total Registrations

Odyssey: 1.8%
Chrysler T&C: 35.5%
Toyota Sienna: 14.8%

affb13car-reg.pdf - Statistics - Automotive Fleet

Anyway, tough to really have a definite answer for the Odyssey, I guess the summary of story here is to do your homework when shopping

It all applies, and the only point I was making was that it is a common issue across the board, not just with Ody's, though a used Ody, like certain other models, will sell for closer to new price and make even less sense to buy used.

As for the issue of such a low percentage of Honda's being fleet, that brings up another point. Why did someone ditch such a brand new Ody? If it was a private individual I would be asking for the full warranty history to make sure it wasn't a lemon that they avoided the official lemon law on. Courtesy cars, special event cars, estate cars, etc. are a few other possibilities, but in any event there are far less year old or current model year Honda's on the market than any other volume auto maker causing used values to be unreasonably high.

Personally I don't find it that tough to get a definite answer on new vs used on the Ody. Unless you absolutely can't swing a new one, there is rarely a situation where buying used makes real financial sense. Simply take the purchase price of a new one and divide by 150,000 to get a cost per mile to drive, then take the used one and divide the purchase price by the number of miles remaining between the existing miles and 150,000 to get that cost per mile, ie; a 20,000 mile Ody has 130,000 miles remaining. Of course you can use 200,000 or some other number if you want, but the end result will be the same when contrasting the two. You can even calculate cost per year as well if you know your average miles driven, but of course buying a 20k mile used van will likely result in a year or two less ownership. Obviously this assumes the same repair costs between the two vehicles and doesn't account for opportunity cost on your money if you are paying cash, as well as other variables, but it at least gives you a means of quantifying real cost.

ishtori said:
I never see a point of buying a low milage honda/toyota unless you are willing to go older to previous model year. There isn't much price difference and the little money you did save is going to pay toward a higher finace rate, if you are financing.

Exactly. In fact, my purchase of a 2007 EX-L NAV RES with 113K miles for $13,500 a year ago doesn't make financial sense if you assume it will make it to 200K. 87,000 miles remaining to 200K results in a $.155 per mile cost, the same as a brand new one for $31K and we gave up 36K worth of driving with zero repair cost because of the factory warranty. Also, at 20K miles per year driven it will last us 4.4 years for a per year cost of $3,068 with a new one costing $3,100 a year for 10 years, again giving up 1.8 years of repair cost free driving. To be fair, since our '06 had been totaled, our shopping window was very small and I probably could have done a bit better given more time, but I also did at least $1,000 better than any similar unit in a 100 mile radius. The only reason we bought used was because of a recent job loss and banks don't make loans to people drawing severance pay

, so we paid for it with insurance proceeds + cash.

OdysseyTE · Aug 18, 2014

I've bought/leased over 40 vehicles in my life and never did I see an interest rate on a used vehicle to be the same or close to a new one. Maybe I am spoiled with 0% or close to it APR but on a used vehicle, no matter how excellent my credit is the rate was always at least 3 points higher. So on a used $30,500 with 3.9% apr over 5 year term the payments would've been 560.00 when on a new $33,000 van with 0.9% apr the payment would've only been 562.00. The numbers may of course be different depending on people's credit, down payment and other factors but to someone with an excellent credit and a small down payment it doesn't make sense to buy slightly used vs new unless the price difference is big enough to justify the payment, which is not the case with an Ody.

II Kings 9:20 · Aug 18, 2014

OdysseyTE said:
I've bought/leased over 40 vehicles in my life and never did I see an interest rate on a used vehicle to be the same or close to a new one. Maybe I am spoiled with 0% or close to it APR but on a used vehicle, no matter how excellent my credit is the rate was always at least 3 points higher. So on a used $30,500 with 3.9% apr over 5 year term the payments would've been 560.00 when on a new $33,000 van with 0.9% apr the payment would've only been 562.00. The numbers may of course be different depending on people's credit, down payment and other factors but to someone with an excellent credit and a small down payment it doesn't make sense to buy slightly used vs new unless the price difference is big enough to justify the payment, which is not the case with an Ody.

I would agree and I am at over 50 vehicles many purchased with cash like my '85 Peugeot for $800 or '79 LeSabre at $700.

jm91rs · Aug 19, 2014

Thanks for the replies. I recently sold a very low mileage 2014 Altima. I wanted to trade it on the van so I found a dealer that had Nissan counterparts and tried to work out a deal. They wanted to give me $19,000 for the exact same car they were trying to sell on their lot for 29,000 (and could be had new at the time for 28,500). I ended up selling private party for 25,000 (what I paid for it, so all I lost were taxes) so I figured that dealer asking price on new cars were just wild guesses at what people would be willing to pay. I guess I was hoping you all would say the dealers asking prices are crazy and these low mileage vehicles could be had for much less. Instead it sounds like buyers are crazy and dealers are more than happy to take advantage.

As far as loaners, one dealer near me has 2 service loaners (considered used because they were titled to the dealership). Both EXL w/Nav, both approx 9k miles. Asking price for each was 32,999 and I have a quote at just over that for a new one. Obviously I would not pay asking price, but I approached the dealer and said "why would I buy used when new can be had for the same asking price? You probably titled this to yourself back in April and got incentives from Honda, then you put 9,000 miles on it and try to sell it for more than you paid?" They told me the Honda Certified Warranty was better than new warranty and I told them that there's no way they'll convince me that 0 miles plus factory warranty is worse than 9000 miles plus factory extended warranty. I guess if they didn't appreciate being called out, because they told me to go back to the new car side and buy it new if I had a problem with it. I said I'll buy it new, but from someone else. 2 days later they called and asked if I was still interested in the used one, but only had the color I wasn't interested in so that's out. Looks like it's back to the waiting game.

ishtori · Aug 19, 2014

pkrface said:
Exactly. In fact, my purchase of a 2007 EX-L NAV RES with 113K miles for $13,500

Holy crap, a 7 year old car with 113k miles still goes for $13,500? God bless Honda.

pkrface · Aug 19, 2014

ishtori said:
Holy crap, a 7 year old car with 113k miles still goes for $13,500? God bless Honda.

Pristine condition with complete TB service done only 8K miles previous. And that was a little more than a year ago, so 6 years old at the time. Under the gun due to totaling other van, but by far the best deal I could find in a 100 mile radius over 10 days of hard shopping. Saw a few with ~90K miles, but not near as nice cosmetically. Mine came with a retired military man's spread sheet documenting every penny he spent on the van including wiper blades, air filters, etc., but all oil changes, trans fluid, etc. was done at the dealer.

As I documented, still no real savings over new when you calculate cost per mile or per year to own.

ishtori · Aug 19, 2014

In actuality it is more expensive. The old and new has same cost per mile but the old definitely has less gadgetry and the car is also a lot less safe than the new models. I'm pretty sure the 7 year old car (now) won't pass the now standard small overlap crash test or have any of the pre-collision or blind spot warnings.

pkrface · Aug 19, 2014

ishtori said:
In actuality it is more expensive. The old and new has same cost per mile but the old definitely has less gadgetry and the car is also a lot less safe than the new models. I'm pretty sure the 7 year old car (now) won't pass the now standard small overlap crash test or have any of the pre-collision or blind spot warnings.

Agreed. Also, the initial 36K miles are driven with zero repair expense exposure. Of course there are a lot of other factors. Higher insurance costs, opportunity cost for the money, etc., add to the cost of driving new. Less gadgetry usually results in less repair costs. We could go on and on, but keeping it simple you generally save little if anything to buy late model used over new.

brady33 · Aug 24, 2014

There are a lot of great points made here. I have spent months thinking through our next purchase and discovered that some Honda dealers will work with you to find vehicles coming off Honda's corporate lease program; these are vehicles driven by sales reps and other qualified corporate staff. A month ago I asked if they could find a 2014 TE in black, and over the last 3 weeks there were 4 available to bid on. The timing is good because Honda's sales reps are starting to get the '15s. For my situation, the deal was shaping up to be about $6000-7000 (depending on installed accessories) less than the new MSRP, and I was offered a new one for about $4000 off MSRP (no ext. warranty though). The auction deal seemed like a better value since i was talking numbers under $40k, plus I would be getting a certified model with the extended warranty included. Like mentioned in earlier posts, my interest rate is higher than the sweet 0.9% offers, but I am able to do a longer financing term to lower the payments until I'm ready to throw more at it each month.

There are drawbacks to this approach, including the bit of uncertainty that comes with making a deal on a vehicle you don't see in person until its time to get it. My salesman and I have a deal made up to protect us both on that, so it's not a big deal in my situation. Secondly, it'll likely work better at certain times of years. I also imagine there are fewer corporate Odysseys running around than Accords, so selection might be an issue. I can think of a number of general "used car doubts" that would apply, some already mentioned in this thread.

There is very little that makes financial sense about my trade, but I'll be honest and say that I really want the '14 TE and found a way to make it work for me. Perhaps some of you could find this approach useful.

New vs. Low Mile Used

jm91rs

bobodaclown

BigBoat

ProudPaPa

II Kings 9:20

OdysseyTE

pkrface

pkrface

OdysseyTE

BigBoat

ishtori

pkrface

OdysseyTE

II Kings 9:20

jm91rs

ishtori

pkrface

ishtori

pkrface

brady33

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