Just bought my first car and I’m freaking out

amother

Mon, Apr 24 2023, 1:13 pm

So after hearing and reading how much more buying vs leasing a car is financially reasonable, I pulled the trigger and signed on a new rav4 hybrid.
And now I’m freaking out.

Was this the right decision?
How long will the hybrid battery last?
Can I sell the car and make profit on it if I haven’t paid off the car loan?

amother

Yolk

Mon, Apr 24 2023, 1:30 pm

amother OP wrote:

Toyotas are very reliable. Hybrid batteries have been improving over the years. You car has a warranty and could last a very long time. I had an older Toyota prius that was 13 years old with no major issues, and probably would have lasted much longer, but we needed a bigger car.

It's not normal to be able to sell any car you buy and make a profit, regardless of car loan. And new cars lose a lot of value as soon as you drive it off the lot. That's not to say it's a bad choice, but that's just the way car pricing works.

amother

Mon, Apr 24 2023, 1:43 pm

Thanks!

So would buying an older car be a better choice?
Why would newer cars be of less value but older cars more?

If I want to sell the car in 8-10 years, will I be able to make money?

amother

Yolk

Mon, Apr 24 2023, 2:09 pm

amother OP wrote:

Thanks!

So would buying an older car be a better choice?
Why would newer cars be of less value but older cars more?

If I want to sell the car in 8-10 years, will I be able to make money?

New cars have an initial depreciation in value. They're still worth more than older cars. But cars are not an investment where you can sell my our car and make back what you paid initially. Things got a little weird with covid and car pricing, but normally you are generally never going to make a profit or even recoup costs selling your own used car.

If you already bought it, it doesn't make sense to sell it now. You'd still owe the amount of the loan which you would be unlikely to get back by selling it.

justforfun87

Mon, Apr 24 2023, 2:13 pm

Back in pre-covid days it was NEVER a good idea to buy a new car. You could get a young used car with low miles at a fraction of the cost. Unfortunately now the prices of used cars have exploded which has debunked that recommendation. They are closer than ever to new car prices making it much more difficult. No, you will not make any profit on selling you car unless something happens again like Covid. Leasing is not financially advised by anyone but for some reason people love it. I am in the same situation and just bought a new car against my own advice.

amother

Trillium

Mon, Apr 24 2023, 2:26 pm

amother OP wrote:

Thanks!

So would buying an older car be a better choice?
Why would newer cars be of less value but older cars more?

If I want to sell the car in 8-10 years, will I be able to make money?

You want to be able to sell and 8-10 year old car and make money? Meaning get back more than you paid? Would you pay that much for an old car?

amother

Yolk

Mon, Apr 24 2023, 2:34 pm

amother Raspberry wrote:

My prius went up in value.
I could sell it at a gain right now.

How much did you pay for your Rav4?

Right, but that's because of covid still and things have yet to normalize. But historically that is not the case for selling used cars, and things will eventually shift back to the way pricing ran for used cars.

amother

Raspberry

Mon, Apr 24 2023, 3:50 pm

amother Yolk wrote:

True.
But the depreciation value for a prius is amazing, when I bought It I estimated that event with depreciation would really be worth it.

Amarante

Mon, Apr 24 2023, 4:15 pm

Presumably you read reviews and the car fits your needs.

In my experience, buying a new car makes sense if you keep the car for a long time - which I always have. Yes a new car depreciates the first year or so but so what for me? That is more than compensated for because I know the history of the car and I have maintained the car properly to ensure that the systems last as long as possible.

A regular person can't sell a car at a profit because a car is a depreciating asset - in other words the older it gets - the more mileage it has - the less it is worth. That is completely normal and baked into the cost of car ownership.

But again, if you buy a reliable well reviewed car - Toyota, Honda, Lexus - it should last ten years or more with appropriate maintenance and care.