Tips on Buying Cars: A brand-new Honda Civic v/s a 1-year Honda Civic with high mileage, bumper to bumper warranty, new car dealer

Question
Hi Jeff,

I'm going to buy the first 'real' car I've ever owned, and I've decided on a Honda Civic. I'm planning to buy either a new Civic or a one/two year old Civic, and I seem to have found two deals in which a 2007 Civic LX sedan is being offered for $16K (as compared to a brand new one that costs 18.4K). The only hitch is that both of the 1-year-old Civics have about 45,000 miles on them!

What should I do and what does this mean for me as a buyer? I would love to be able to save that $2.5K and put it into my savings account, but I'm fearful of buying a car that's been driven so hard for the first year (my own driving habits take me about 7,000 miles a year)... Any advice would help.

Vikram

Answer
I've been thinking about this for a couple days, as it's not an easy question to offer advice on.  It seems your main reason for wanting to buy used is that it will save you a couple thousand dollars upfront.  But lets consider a few things:

1) The main warranty has expired on the used cars (new Hondas come with a 36-month/ 36,000-mile bumper-to-bumper warranty), and the powertrain will expire at 60 months or 60,000 miles. Hondas are incredibly reliable, but they can break down just like other cars, and you'll have to foot the bill if you don't get an extended warranty, which will push your total cost closer to the new model.

2) No warranty will cover wear-and-tear items like tires, belts and hoses, brake pads and rotors, battery etc...  Unless you're buying these used cars from a new-car dealer that's already replaced these items as part of their reconditioning process, you'll be paying for them yourself in the near future.

3) Generally speaking, you'll get a better interest rate on a new car than a used one, and Honda is certainly spending a lot of ad dollars right now to tell us that they're offering great deals right now to clear out the 2008s.

In all fairness, 45,000 miles in one year is not necessarily hard on a vehicle.  The only way I can imagine one has done that is to drive on the interstate all the time, and nothing's easier on a car's mechanicals than highway driving (how do you put 45,000 miles on a car in one year by driving in the city all the time?).  If you do decide to go with the used car, look at its condition carefully.  Does it look like it's had a hard life?  Is there a lot of wear on the gas and brake pedals, the carpets and seat upholstery?  Are there a lot of nicks and scratches on the outside, or evidence that a lot of scratches have been touched-up?  Have an independent mechanic look the car over to see what he or she thinks.  Bottom line: I think you could get a really good deal on a new one right now, with a lower interest rate, and I think you'd probably be happier in the long run (assuming that you'll keep the car a long time).