Buying New vs Used Cars
Buying New Automobile vs Used Car
New vs used. Which automobile is right for you? Think about the following.
Owning a brand new automobile is exciting. But financially speaking, it makes more sense to purchase a used car. As soon as you drive a new automobile off the lot, it loses a great portion of its value. This is because your automobile is no longer “new”.
New automobiles lose about 40% of their value within 3 years, then depreciation starts to slow down. Why not purchase a used automobile and grant someone else to take that depreciation hit?
The previous owner will have absorbed the steepest part of the depreciation cycle. At that point the costs of owning and operating the automobile will be reduced. The money you save on depreciation will surely go a long way.
Another benefit of buying used is lower cost. By buying used you pay less. You will also save on financing costs, insurance premiums, registration and licensing fees. You don’t have to worry about paying income tax.
As with everything else there are a few downsides to buying a used car. There are greater chances for pricey unwarranted repairs. You might very soon have to do major maintenance on your car, including replacing tires, battery, brakes, muffler, and perhaps even the transmission.
A used automobile is usually less reliable. You don’t know exactly what you’re getting into and how the previous owner treated the car. However, each situation is different and some used models might actually be far more reliable than some new ones.
If you can pay cash, go the new automobile way. Enjoy the feeling of knowing you’re the original owner of a new automobile in mint condition. Nothing can replace that feeling.
Otherwise do not hang your hat higher than you can reach. Practice financial prudence. Save your money and comfort yourself knowing that one day you will be healthy to afford that dream car. One day when money is no object.
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