The Trap of Buying Used VS New

We often talk about the dilemma between buying new and used. The adage in personal finance is to always opt for used, especially for vehicles. Indeed, I was in the situation of having to buy a scooter. 🛵

On X (Twitter), I asked you and some will be, I think, surprised:

Comparison between New and Used

So, I did a calculation to determine whether I should buy used or go for new. I was quite surprised by the results. When buying used, we often forget to take into account several ancillary costs:

• The time spent searching

• The time to do the paperwork

• The potential risk of being scammed

Comparative Table

I created a comparative table (letting ChatGPT do the dirty work) using an hourly rate of €20 for a scooter costing €3000. The result shows that it is slightly advantageous to buy used, but the difference is not huge.😮

Hourly Rate and Absolute

Value If I take an hourly rate of €100, it is clearly more advantageous to buy new. It's important to always think in absolute value and not in percentage, a concept I explain in my book.

Exercise with a Vehicle at €10,000

If we redo this exercise with a vehicle at €10,000, which would rather be a car, the difference is also minimal. And I haven’t even included the time to go get the vehicle, which can vary between new and used.

Conclusion

There isn’t one rule that dominates all the others. You need to think before acting. By the way, I finally opted for an ADV 160 Honda.

Cryptos pay off, don't they? 😃

Until next time,

Antoine.