Shopping for a car can be a pain. You have to decide what manufacturer to buy from, what style of car, what color, which options, etc. However, one of the choices you have to make, whether to buy new or used, should be pretty simple:
Buy used cars.
Oops, I’m sorry; cars aren’t considered used any more, they are pre-owned.
Anyway, according to MSN.com, an average car will lose nearly half of its value (45%) three years after it is driven off the lot for the first time. However, after three years, the car should still have at least 70% of its “life” left, assuming it hasn’t had anything catastrophic happen to it.
So, you can buy a 20,000 car and keep it for 10 years, or you can buy that same car three years later for $11,000 and keep it for 7 years. That’s a $9,000 difference for only three years less.
In addition to the initial savings, you should also see a sizable savings in your cost to insure the vehicle, as well as any applicable car/personal property taxes.
I think it goes without saying, this is all predicated on the fact you’re going to buy your used car from either a reputable dealership that has thoroughly checked over the vehicle (and has a vested interest in not selling you a lemon) or from someone you know who has taken good care of the vehicle.
I know it’s nice to have a brand new car, knowing you’re the only person to drive the vehicle, but it should be near impossible to pass up a 45% savings on a big ticket item.
Plus, with the way pre-owned cars are treated now, you’ll probably still get the new car smell!