Cash The Checks

Personal Finance Blog With Advice On Making Money And Saving Money

Oct 16 2011 Spending by Edwin C 1 comment

Everyone wants a new car. Perhaps it’s because of the new car smell. Maybe it’s to show off. It could be because it’s easier. But it’s not the right choice. Buying a used car is better than buying a new car and I’m going to tell you why.

  1. Depreciation. The moment you drive a car off the lot it has lost at least a thousand dollars. The first couple of years a car will lose many more thousands of dollars. Yes, the car will continue to drop in price throughout the years, but never as much as the first couple of years. Therefore, buy a car that is at least 2 years old to soften the blow.
  2. Sales tax. When you go buy a new car, the sticker price on a car isn’t your total. You’ll have to pay sales tax in addition to that. This means your total could balloon up several thousand dollars more.
  3. Fees. Fees on new cars are much greater than fees on used cars. Buying a car at the dealer means you’ll be paying for fees like dealer preparation and advertising fees. There are also countless useless yet expensive add-ons the dealer will want to charge you for on a new car, like rust proofing.
  4. Condition. Nowadays, cars are built to last. The thinking behind buying a new car instead of a used car is because new cars last longer. But a used car can last you well over 100,000 miles. So if you buy a different car every 10 years, a well maintained used car can last you 10 years, just as a new one would.
  5. Negotiation. You stand a better chance at getting a good deal on a used car, rather than a new one. Sometimes the dealer simply cannot lower the price on a car anymore. When you’re dealing with a private seller, there is no limit to how low they can go. If they’re having a hard time selling their car, haven’t received an offer or just want to get it over with, you stand to get a really good deal.

Sam Moore on 11/15/11

I never buy new because I get bored of the same car after a while anyway, so I buy a different one every 5 years or so.

Leave a comment