Are used cars or new cars better? New cars begin depreciating the second you sign the papers. Now that question is an easy one. Since a car is a depreciating asset, meaning in general cars lose value with time, the best money decision is to purchase the car when it will tend to lose less value. That of course combines with the concern over the state when a car needs less maintenance. The slightly used car is about the best for both concerns. The value has already dropped from new car state. Someone else got robbed by that decrease. The car is still in good condition, often still under warranty, so that it won’t have need for constant and costly repairs like an older model car needs.
Late model used cars are available from a variety of sources. Car lots have a lot of traded in cars. Those vehicles are looking for new owners. Companies like Carmax specialize in used automobiles, while eBay has an entire subsection dedicated to car auctions, mostly for used vehicles. There are car auctions in every city. These include police auctions of impounded vehicles as well as dealer auctions that might involve, for example, cars purchased from car rental companies.
Kelly Blue Book is a valuable resource to determine the relative fair price of a used car. Categories include make, model, year and condition from poor to excellent. It also breaks down the prices between dealer sales and private sales. Dealers have overhead private sellers don’t have so that is important.
Have you thought about the financing for the used car? Think about saving up the pennies and making a cash purchase. No matter how low the monthly payments or interest rate, paying cash is better. It’s nice to own a top of the line auto. Remember, however, that even simpler models get from point a to point b. That not only helps your bottom line, but your blood pressure. People who own the luxury cars worry more about them. Many used car owners take pride in their cars, but don’t worry over a ding or two.
Sure cars are a status symbol, but wealth isn’t based on what you spend. It’s based on what you save and on net worth. There are people living hand to mouth even though they earn a lot of money. Good used cars help the budget.