Decision on buying new vs used mid size SUV.
I’m running the numbers on a car search that I’ve done a fair amount of research and landed on 3 options, which I will outline below, then mention which one I’m leaning towards.
My question to the folks here is to understand if I’m missing anything, or if I’m going to shoot myself in the foot by going with the option I’m leaning towards.
Option 1:
- 2026 Kia Sportage SX Prestige Hybrid 35-38 MPG
- 42,000 OTD including taxes and title
- 0% APR, no money down
- 10yr/100,000k mile warranty on drive train
- 5yr/60,000k bumper to bumper warranty
- 12 month cash flow out after 12 months including insurance = $12,600
- Equity after 12 months = $6,510
- Total paid over 48 months including insurance = $50,400
- PV of total cost (because 0% APR) = 45,594
- Conservative vehicle value / equity after 48 months = $26,000
Option 2:
- Used car - rav4, CRV (would not buy a used Sportage)
- have about 20k I could spend on this up front
- likely no warranty
- could also finance this, I was thinking 10k down, finance 10k
- 12 month cash flow including insurance and taxes = $22,100
- 48 months including insurance = $28,400
- PV = roughly $28,000
- equity at 12 moths = $18,400
- equity at 48 months = $13,600
Option 3:
- 2026 Kia Sportage X Line Hybrid
- 37,000 OTD
- 0% APR, no money down
- 10yr/100,000k mile warranty on drive train
- 5yr/60,000k bumper to bumper warranty
- the numbers here are pretty close compared to the SX Prestige. 4k less over 48 months, but that nets out when you add back in vehicle equity at 48 months.
I’m leaning towards the new 2026 Kia SX Prestige. This is because I get 0% APR, and a 10 year warranty on the drive train and 5 year bumper to bumper. The used car analysis does not include any repair costs.
I realize that over time the new car is more expensive, but the cash flow is less volatile, and it feels like the financial security and volatility is less with the new car.
Lastly, I COULD if I needed to pay off either financed car on the spot, but doesn’t make sense to do so at 0% APR unless I needed to. This would be a last resort situation and I would have to sell a small fraction of equities to do so (wouldn’t touch emergency fund) and eat the long term cap gains on it, but I COULD if I had to as a last resort for some reason.
Anyways, if I do go with the new car, is this a terrible decision? Am I missing anything, will this ruin me financially?
Finances:
- 300k household income
- conservatively high expenses at 100k
- max Ira contributions and discretionary income goes to investments