Am I crazy for considering this?

[Dean2]

Well.... maybe... but let's do the math and consider all factors. There is a lot more in the math than just assuming a service life and the cost per mile of that. There's financing, depreciation, etc... all of that plays into a potential future decision to sell/trade the truck down the line.


We'll have to make a couple of assumptions with interest rates, but that's not too difficult. Depreciation is a huge factor the first 4-5 years on a new vehicle but let's just look at the first 3 years. I assume that you're considering keeping the truck until it falls apart but I would mention that probably 90% of the population do not. So resale needs to be a consideration.

New truck cost: $52,400
1st year depreciation is ~20%: - $10,480. New value: $41,920
2nd year depreciation is ~15%: - $6,288. New value: $35,632
3rd year depreciation is ~10%: $3563. New value is: $32,069

Let's assume that you only drive around 1k miles a month. So, in 3 years (or 36 months) the truck has racked up 36k miles. Without even bringing financing into the equation, the truck has ACTUALLY cost $1.77/mile solely based on depreciation.


Used truck cost: $37,000
By year 9, depreciation has slowed to roughly 3-5% per year (could be less).
10 year depreciation is ~5%: $35,150
11 year depreciation is ~ 5%: $33,392.50
12 year depreciation is ~ 5%: $31,723

Using the same driving assumptions above, the actual cost (just in terms of depreciation) is about $0.14/mile. To add... the new truck will have lost roughly $20.3k in value over the course of 36 mos, whereas the used truck will lose roughly $5,200 in value.

Is having the bumper to bumper warranty worth the extra $15k?


Let's consider adding financing into the equation (72 mos loan, no down payment, 7% interest, 7% sales tax, $2,700 title/reg fees).

$52,400 - Total cost after repayment is $72,139.39
$37,000 - Total cost after repayment is $51,912.18

That's a difference of over $20k.


Is a new truck REALLY cheaper or are you simply paying a premium for the peace of mind? If you never plan on selling or trading, it makes reasonable sense to buy new. But if you even have an inkling that you will want to upgrade again and plan to use the truck's remaining value towards the new one... you'll take a hit.

Sorry but you math and assumptions are completely wrong. Most simply put, why is the 3 year old pickup with 36000 miles only worth 32,000 when a nine year old unit with 125000 miles is worth 37,000. In fact, in your ezample the used unitt at 12 years old with 160,000 miles is still worth as much as the 3 year old new pickup. That makes absolutely zero sense. Using service life, and assuming both are worth zero at 350,000 miles is the only unbiased and assumption error proof way of calculating the per mile cost to own.

 

[Hudson]

I think the 2018 Express will eventually become a "classic". But that might take another 12 years. Course the Cummins could raise a lot in value too.

Is this your first TT? How often do you legitimately think you'll use it? And would those caper trips be shorter distances or longer hauls? Do you think there's a chance you or significant other might not take to TT life? I knew a guy who got tooled-up with a big camper and HD diesel truck ...and they went camping exactly twice a yr ..for yrs (Memorial D/Labor D). And his high-priced diesel became his DD.. vs the lot higher MPG car he had before. Then again, I know people who drive all over the country in TT's. That's why I ask if you have a smaller TT now and use it much. And it might be something you don't know till you have it a while.

Longer wheelbase tk's are more of a pain for daily parking, esp if you have a wife/kid that might drive it. Smaller trucks are a lot easier. But LWB trucks are more steady and comfortable to drive longer distances too.

2016 is easier to use OBD tools than 2018. Parts usually cost more for the 2500. Overall, for hauling your new TT, a longer wb tk is probably a wiser idea.

There are plenty of plusses/minuses on both those trucks. KEEP BOTH!! There's your answer!! LOL

First TT for us. I have a written agreement with the family that we will be camping at least 4 times a year....we will see how long that will last. So far everyone took to camping like pig to mud. We stay local for now but have taken couple of trips to TN over an 8% grade.....I didnt have a white knuckle ride, but didnt like the hemi at 4000RPM all the way up the hill. I would not feel comfortable pulling the trailer from GA to say Yellowstone with the 1500 which we would eventually like to do. Never mind that fact that the Hemi is running 9 MPG.

 

[nlambert182]

Sorry but you math and assumptions are completely wrong. Most simply put, why is the 3 year old pickup with 36000 miles only worth 32,000 when a nine year old unit with 125000 miles is worth 37,000. In fact, in your ezample the used unitt at 12 years old with 160,000 miles is still worth as much as the 3 year old new pickup. That makes absolutely zero sense. Using service life, and assuming both are worth zero at 350,000 miles is the only unbiased and assumption error proof way of calculating the per mile cost to own.

The math is the math. Depreciation is true, and accurate.

A new vehicle depreciates at an average rate of 9% when you drive off the lot. Within the first year, the average depreciation rate is 20% of the purchase price. It continues at ~15% through year 5, before tapering off. By year 10, depreciation is roughly 5%. You can look this up for yourself.

What you are suggesting is to ignore everything but 0-350k miles based off the sale price and ignoring depreciation AND financing costs. Both play a huge factor in the real cost of ownership.

 

[CanuckRam1313]

Well.... maybe... but let's do the math and consider all factors. There is a lot more in the math than just assuming a service life and the cost per mile of that. There's financing, depreciation, etc... all of that plays into a potential future decision to sell/trade the truck down the line.


We'll have to make a couple of assumptions with interest rates, but that's not too difficult. Depreciation is a huge factor the first 4-5 years on a new vehicle but let's just look at the first 3 years. I assume that you're considering keeping the truck until it falls apart but I would mention that probably 90% of the population do not. So resale needs to be a consideration.

New truck cost: $52,400
1st year depreciation is ~20%: - $10,480. New value: $41,920
2nd year depreciation is ~15%: - $6,288. New value: $35,632
3rd year depreciation is ~10%: $3563. New value is: $32,069

Let's assume that you only drive around 1k miles a month. So, in 3 years (or 36 months) the truck has racked up 36k miles. Without even bringing financing into the equation, the truck has ACTUALLY cost $1.77/mile solely based on depreciation.


Used truck cost: $37,000
By year 9, depreciation has slowed to roughly 3-5% per year (could be less).
10 year depreciation is ~5%: $35,150
11 year depreciation is ~ 5%: $33,392.50
12 year depreciation is ~ 5%: $31,723

Using the same driving assumptions above, the actual cost (just in terms of depreciation) is about $0.14/mile. To add... the new truck will have lost roughly $20.3k in value over the course of 36 mos, whereas the used truck will lose roughly $5,200 in value.

Is having the bumper to bumper warranty worth the extra $15k?


Let's consider adding financing into the equation (72 mos loan, no down payment, 7% interest, 7% sales tax, $2,700 title/reg fees).

$52,400 - Total cost after repayment is $72,139.39
$37,000 - Total cost after repayment is $51,912.18

That's a difference of over $20k.


Is a new truck REALLY cheaper or are you simply paying a premium for the peace of mind? If you never plan on selling or trading, it makes reasonable sense to buy new. But if you even have an inkling that you will want to upgrade again and plan to use the truck's remaining value towards the new one... you'll take a hit.

I also don't disagree with your logic as numbers support your ideology on this.
However, buying used, especially a diesel, has its inherent risks, especially if you're not going to use it like a diesel needs to be used

It's a gamble, and one can only hope that this roulette wheel that has one in the pipe doesn't land on you as the used vehicle purchaser when you pull its trigger.

Peace of mind is a valuable thing (as is a new vehicle factory warranty)!

 

[Hudson]

Payload of the diesel is not a concern (in your case), you are well within the limits for what you are towing and then some. What you will gain is much more stability and towing power.
Just keep in mind a HD truck drives like a truck, where your 1500 will feel more like a passenger car so if ultimate comfort is your goal there will be a sacrifice.

I'd make the trade personally, I think you are pushing the 1500 at the limits of what I would be comfortable towing often.

I would try and talk them down a little, I think you can do a little better then $37k in this market.

.

I have noticed that my ram gets a bit squirely at higher winds, more stability would be great

 

[Hudson]

My last comment is that maybe I'm just old school, but just can't imagine trading in trucks to get something 2 years older with twice the miles for almost double the price. This has nothing to do with the 2500 Cummins being worth more, it's just that I'm a cheap skate and would hate to be making payments on a 10 year old truck with 150k on the clock (just think a couple years down the road).

ME and you are of the same mindset sir

 

[nlambert182]

I also don't disagree with your logic as numbers support your ideology on this.
However, buying used, especially a diesel, has its inherent risks, especially if you're not going to use it like a diesel needs to be used

It's a gamble, and one can only hope that this roulette wheel that has one in the pipe doesn't land on you as the used vehicle purchaser when you pull its trigger.

Peace of mind is a valuable thing (as is a new vehicle factory warranty)!

I don't disagree with you. Buying new trades risk for peace of mind. There are steps to take to try to minimize the risk (buying one owner, having all service records, etc...) but of course it isn't fool proof. It all boils down to what the person can stomach the most.

Having bought a couple of new vehicles and having taken the depreciation hit (ahem... looking at you Ford), we chose to allow someone else to eat that cost. We bought the Armada in early 2023 with 16k miles on it for $52k. A new one was $72k. That's a 28% depreciation in less than 2 years that someone else ate. We purchased the extended warranty for $2,600. For $54,600, we have a full powertrain warranty out through 100k miles. We were able to minimize the risk.

For my 2018 Ram 2500, I bought it with ~116k miles for $42k. Since I know the typical longevity of the engine (1 owner, plus all service records) and know that the only real things I have to watch for is emissions issues, it made sense to buy it used versus paying $82k locally for the same truck in a newer model. I avoided a 51% depreciation.



If someone isn't going to tow often I don't suggest diesel if a gas counterpart can do a similar job.

 

[Dean2]

The math is the math. Depreciation is true, and accurate.

A new vehicle depreciates at an average rate of 9% when you drive off the lot. Within the first year, the average depreciation rate is 20% of the purchase price. It continues at ~15% through year 5, before tapering off. By year 10, depreciation is roughly 5%. You can look this up for yourself.

What you are suggesting is to ignore everything but 0-350k miles based off the sale price and ignoring depreciation AND financing costs. Both play a huge factor in the real cost of ownership.

Well, bend it any way you like, but you have NOT explained how a 3 year old pickup with 36,000 miles can possibly be worth less than a 9 year old one with 125,000 klms. Your depreciation numbers are clearly wrong so all conclusions derived therefrom are also wrong.

 

[nlambert182]

Well, bend it any way you like, but you have NOT explained how a 3 year old pickup with 36,000 miles can possibly be worth less than a 9 year old one with 125,000 klms. Your depreciation numbers are clearly wrong so all conclusions derived therefrom are also wrong.

https://www.kbb.com/car-advice/how-to-beat-car-depreciation/

Car Depreciation: What It Is and How It Works | Bankrate

Car depreciation is the reason why used cars are cheaper to buy than a new car of the same model. And it happens faster than you might think.

www.bankrate.com

Car Depreciation: How Much Is My Car Worth?

New cars lose around 20% of their value in the first year, and they’ll be worth about 40% of what you paid after five years. This process is called depreciation.

www.lendingtree.com

Car Depreciation Calculator

Forecast your car's value over time by using our car depreciation calculator and see what it might sell for in the future.

www.progressive.com

Not real sure how to spell it out any other way.

After 5 years, depreciation decreases. A 10 year old truck depreciates at a much slower rate than a brand new one.

 

[Hudson]

Thank you all for your comments and advice. I guess long hauling would be my biggest concern with this truck since i know i wont be doing enough of that to keep the emissions system happy.
We went to look at the truck. Overall the truck looks and feels good. Loved the room in the mega cab. I noticed what looked like water stains in the back of the cab on the headliner, possibly due to a leak from the rear window or the drainage tubes from the sunroof. Truck drove well but had a slight clunk in the steering. I am thinking tie rod ends need service. Engine was surprisingly clean with no oil stains even around the turbo. Truck stayed at the lot and we are moving on to look for another one.
Again thank you all for the advice.

 

[Dean2]

nlambert - Address the ACTUAL question. Does it make any sense to you that a 3 year old pickup is worth less than a 9 year old one with 4 times the mileage. I don't care how you slice it, that isn't logical, and in fact is utter nonsense.

 

[Cummins diesel]

nlambert - Address the ACTUAL question. Does it make any sense to you that a 3 year old pickup is worth less than a 9 year old one with 4 times the mileage. I don't care how you slice it, that isn't logical, and in fact is utter nonsense.

I’ll address the question. You are not comparing two trucks that are even remotely similar. There’s no way that you will get a new Longhorn mega cab Cummins for anywhere close to 52,000. That’s about what you can buy a tradesman for but the truck he was looking at was a Longhorn. The new Longhorn I’m guessing will run you close to 85,000 if not more.
His depreciation numbers are fairly close if you use two similar trucks. The reason the older truck is worth more is because it’s a lot higher trim level with a lot more goodies than the base model truck price he used for the numbers.

 

[Hudson]

Yup it was a Longhorn Laramie. I think the only thing it was missing was airbags in the rear

 

[Jeepwalker]

Well...you'd sure have a blast on some of the longer camping adventures (Yellowstone, etc)!! Those are things the kids (I assume that's what you were refering to) memories they'll have forever. Yellowstone is a great adventure. You'd need the larger truck for a journey like that. An Express really isn't safe...IDT pulling that big of a TT. Esp if you get some windy days there in the plains.

I think you've pretty much answered your own question on what you ought to do. After a couple years you can always buy a different truck or used Express... or whatever if need be.

 

[Jeepwalker]

It was probably staining from a leaking 3rd brake light. They all do that. Just needs a new gasket. Check under the carpets...if they're wet, put some lathe under there as spacers so there's an air-gap ....and they should eventually dry out in a couple weeks...just drive like normal. You don't want it to start smelling 'musty'.

Well ...hopefully that's the issue.

 

[nlambert182]

nlambert - Address the ACTUAL question. Does it make any sense to you that a 3 year old pickup is worth less than a 9 year old one with 4 times the mileage. I don't care how you slice it, that isn't logical, and in fact is utter nonsense.

I have.... numerous times. You just refuse to listen.

Regardless of whether or not you are looking at trim levels the depreciation rate is the depreciation rate. IF you find a brand new base model truck for $52k and then compare it to a fully loaded used truck, it will be worth less than the used truck in a few years because of DEPRECIATION. It's literally math.

No one (unless close to the border) is going to drive to frickin Canada to buy a truck when we can spend a little more and buy one here, so $52k isn't realistic to even toss out for a new Laramie truck. They don't exist. But, using YOUR numbers, I showed you the math.

I get it... for you, peace of mind is more important than the total cost of ownership. It isn't the case for everyone so buying used can make sense for a lot of people from the financial perspective.

Service life is not the only consideration you need to use to determine what is the most cost effective. In the real world, depreciation and finance charges are the reality 9 times out of 10 and those have a great impact to the total cost of ownership. You have to consider that as well.

I can appreciate that you want to buy new though because when you sell it, you'll take the depreciation hit and I won't. If it weren't for people who make those decisions I wouldn't be in the truck I'm in now.

OP - the water staining is likely the 3rd brake light. It's an $8 gasket on Amazon and 10 minutes of your time. All of the Rams do it.

 

[tron67j]

Well.... maybe... but let's do the math and consider all factors. There is a lot more in the math than just assuming a service life and the cost per mile of that. There's financing, depreciation, etc... all of that plays into a potential future decision to sell/trade the truck down the line.


We'll have to make a couple of assumptions with interest rates, but that's not too difficult. Depreciation is a huge factor the first 4-5 years on a new vehicle but let's just look at the first 3 years. I assume that you're considering keeping the truck until it falls apart but I would mention that probably 90% of the population do not. So resale needs to be a consideration.

New truck cost: $52,400
1st year depreciation is ~20%: - $10,480. New value: $41,920
2nd year depreciation is ~15%: - $6,288. New value: $35,632
3rd year depreciation is ~10%: $3563. New value is: $32,069

Let's assume that you only drive around 1k miles a month. So, in 3 years (or 36 months) the truck has racked up 36k miles. Without even bringing financing into the equation, the truck has ACTUALLY cost $1.77/mile solely based on depreciation.


Used truck cost: $37,000
By year 9, depreciation has slowed to roughly 3-5% per year (could be less).
10 year depreciation is ~5%: $35,150
11 year depreciation is ~ 5%: $33,392.50
12 year depreciation is ~ 5%: $31,723

Using the same driving assumptions above, the actual cost (just in terms of depreciation) is about $0.14/mile. To add... the new truck will have lost roughly $20.3k in value over the course of 36 mos, whereas the used truck will lose roughly $5,200 in value.

Is having the bumper to bumper warranty worth the extra $15k?


Let's consider adding financing into the equation (72 mos loan, no down payment, 7% interest, 7% sales tax, $2,700 title/reg fees).

$52,400 - Total cost after repayment is $72,139.39
$37,000 - Total cost after repayment is $51,912.18

That's a difference of over $20k.


Is a new truck REALLY cheaper or are you simply paying a premium for the peace of mind? If you never plan on selling or trading, it makes reasonable sense to buy new. But if you even have an inkling that you will want to upgrade again and plan to use the truck's remaining value towards the new one... you'll take a hit.

This is really good information. A used truck has already depreciated at the higher first few years rate so can be a better financial decision. Mechanically , well, just do your due diligence and get a mechanic to go through it all. Financing a new truck means that in the first couple years you are paying on something that isn't worth what you owe.

But the issue is more about why a diesel, and that has been discussed already. I have a 2018 2500 CC gasser with a 8' bed and 3k of payload capacity. Have really enjoyed it, tows great up and down hills, the ride is actually pretty decent, 1k of weight in the back makes it even better but I don't do that too much. Just sharing to provide an alternative story in case the OP considers going to a gasser.

 

[Dusty]

The 1500 is my daily driver. Thanks for the short trip comment....did not know that

So i just looked up the payload on the 2016 mega cab...2030lb. Not much more gain here over my 1500 1760lbs. I know the numbers are just numbers and the 2500 is better for towing because of the carrying weight of the axels, frame strengths, etc... I guess if you want towing big towing capacity reserves, you are not allowed creature comforts.

Thanks for all the advice so far, you folks are great...

CTD 2500s are great for towing. But they are not cost effective as a daily driver. My advice is if your towing less than 1000 miles or so per year, a capable 1500 is more practical.

Regards,
Dusty
2019 Ram 1500 Billet Silver Laramie Quad Cab 2WD, 5.7 Hemi, 8HP75, 3.21 axle, 33-gallon fuel tank, 18” wheels. Build Date: 3 June 2018. Now at 123497 miles.

 

[62Blazer]

Well, bend it any way you like, but you have NOT explained how a 3 year old pickup with 36,000 miles can possibly be worth less than a 9 year old one with 125,000 klms. Your depreciation numbers are clearly wrong so all conclusions derived therefrom are also wrong.

I understand where you are coming from. But I believe the disconnect is that they are not equivalent vehicles in this conversation. They are comparing radically different price point trucks. In this case the "new" truck is a fairly base model $50k-ish version and the used one started out as a $70k-$80k ish truck. The reason the used truck maybe worth more is simply because it cost $30k more to begin with.

 

[nlambert182]

That's true. If you do an apples to apples comparison, it will take a little longer to break even.

I don't really know the price of a brand new Laramie Longhorn, but assuming it's $80k we can re-run the depreciation math and get a ballpark on what the new one will be worth within the first 5 years:

Year 1 - $64,000
Year 2 - $54,400
Year 3 - $48,600
Year 4 - $44,500
Year 5 - $41,000

If I were even going to consider trying to find something close to new... I would absolutely try to find one that took the initial 20% hit, but I would try to find one that's ~2-3 years old with low miles.

That's pretty spot on with what I paid for mine though.... it wasn't far off that $41k mark when I bought it and that was in 2022. I'd say the math checks out.