Brand new vs CPO: The Path To My First Car, Part 6

My gratitude to everyone who participated in the poll, specially those who left comments bringing enlightenment to my dilemma. Others, perhaps finding the poll questions rather limited and limiting, chose to send me personal email to share their advice and expound on their opinion.

All in all, the exchange of ideas has been and still is very insightful. Thank you all for helping me in this major path I’m traversing.

I’m already on the last lap. It took this long because I do not have the luxury of physically present company to pick brains with during research and when eventually in the car lot. Except for emails, phone calls, the blog poll, and small talk at work, I am basically on my own.

To compensate, I collated print-outs of every Internet article I found significant about car- buying and filed them according to topics with subcategories. I will carry these along as I turn the bend from internet research to car lot search.

At the beginning of this path, I was pretty sold on the idea of getting a CPO vehicle, but further research - poll opinions included - is now prompting me to buy new instead.

There’s a lot to check on a used car, and if you’re not careful you might end up with a lemon. Though I consider myself fairly thorough, if not overly, the task seems daunting for someone like me who is truly new to car buying.

There are a lot of points to cover from outside the car, to inside the car, to under the car. Someone who has gone through buying and owning a car many times is in a much better position to make a used car purchase. It’s a familiar terrain for them they can probably do it in a breeze.

If I cannot even begin to synthesize the complexities of buying a new car, how much more buying a used one?

One advice about used car-buying is to choose a unit that’s at least 3 years old because it would have saved you the first leg of depreciation which is estimated at 45%. Unfortunately, I did not find any 2004 to 2005 Toyota certified Priuses within a 1000-mile radius.

CPO 2007s cost almost the same, about 87%, as new ones. They are priced high in auctions so sellers mark up the price as well. The shift to small cars a few months ago was not foreseen, so production then does not meet demand now.

A point to consider: older models come with less warranty, if there is any left.

Another advice about used car-buying is to have it inspected by a trusted mechanic. I don’t know anyone since I have not owned a vehicle here in the U.S.

Yes, I could bring it to a friend’s trusted mechanic or even an independent mechanic, but the burden of certainty that lies in the used car’s history which is quite impossible to lift rests in me - the consumer end of the car buying process.

In addition, I do not have the luxury of resources and company to go to a mechanic for an independent inspection so there will most likely be no second pair of eyes to inspect my certified prospect.

Car experts advise to stay away from CPOs if price is priority because the price to pay for a CPO label is not worth it compared to a used one. They attest the CPO market is not for bargain hunters.

Peace of mind is non-negotiable and I know I will find it in a brand new 2008 Toyota Prius. The only thing left to do now is find a good deal.

Polling the People: The Path To My First Car, Part 5

With my car buying research verging on the fanatical, I had become more equipped with information on what to look for and what to watch out for.

As I've previously written, it's a major expenditure, and careful study must be put into it. I cannot be any more specific or redundant than that. I'm glad I hadn't given in to peer pressure into buying a car ASAP.

It’s been quite a path keeping the search ball rolling. I have endured sleepless days [I work nights], missed exercise routines, slept on the couch, taken swift showers, subsisted on quick-cook food and the always reliable Oriental delivery, and fallen behind on literary and academic readings.

If you're a new car buyer like I am, or have a car and want to brush-up on your auto intelligence, here are a few sites that may come in handy.

An investigative report at edmunds.com uncovers the tricks of the trade with a journalist going as an undercover car salesman.

MsMoney.com, a personal finance web site primarily for women and families, offers a helpful guide to buying a car.

User-friendly cost calculators and interesting articles about auto finance and insurance are available at Bankrate, Inc., an aggregator of financial rate information.

At this point, some friends have actually advised me to postpone buying a car because of rising fuel prices. Demand for hybrids has risen. As for Toyota's Prius, there's a shortage of supply as production is at a halt.

A certified '07 Prius I was eyeing online for about a month priced at $28,500 (options and accessories included) at a certain dealer lot is not anymore listed. A similar unit, albeit on a different lot this time, is selling at $29,991. Are hybrid price tags marking-up all of a sudden due to high demand? Is there still a good deal I can look forward to?

The argument between financing and leasing a car is, for me, a no-brainer. Cars are usually leased for the first three years and that is the same amount of time it will incur the most depreciation. Needless to say, the lessee will bear this brunt.

I'm not as status-conscious as to need a new car every three years and subject myself a slave to the vicious cycle of car leasing. Financial common sense tells me to shun lease and go for buy. What do you think?

One factor I plan to consider is a broker, the type that works for the consumer. Have you heard of this? The broker works to get the buyer a better deal than what the dealer offers. Of course, you'll have to pay the broker for the service. I've read about people saving hundreds of dollars, with 15 to 30% of the savings going to the broker. A 70% savings isn't bad at all, right?

I'm not considering a used Prius from a private party because the inherent risk is just too high to take on, so the deliberation now is between a brand new 2008 Toyota Prius and a certified pre-owned 2007 Toyota Prius.

According to NADA Guides and AutoTrader.com, the MSRP (Manufacturer Suggested Retail Price) for a brand new '08 base model is around $22,875; for a CPO '07 is about $22,175.

Basically, a certified pre-owned vehicle is a used car that has been certified in good condition and is being sold by a dealer or automaker with factory-backed warranty. Toyota vehicles in Toyota dealer lots undergo a 160-point inspection.

I haven't quite finished researching. Can you spare your two cents worth?

Which one do you think outperforms the other in terms of depreciation, fuel cost, sales tax, interest, insurance, maintenance and overall cost-to-own?

Confirm your choice by pressing the "Vote" button.

You can also elaborate on your answer by leaving a comment.

Thanks in advance!