By:
Mantius Cazaubon
New vs used. Which car is right
for you. Consider the following.
Owning a brand new car is exciting. But financially
speaking, it makes more sense to buy a used
car. As soon as you drive a new car off the
lot, it loses a great portion of its value.
This is because your car is no longer 'new'.
New cars lose about 40% of their value within
3 years, then depreciation starts to slow down.
Why not buy a used car and allow 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 car 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 sales tax.
As with everything else there are a few downsides
to buying a used car. There are greater chances
for costly unwarranted repairs. You may very
soon have to do major maintenance on your car,
including replacing tires, battery, brakes,
muffler, and perhaps even the transmission.
A used car is usually less reliable. You don't
know exactly what you're getting into and how
the previous owner treated the car. However,
every situation is different and some used models
may actually be far more reliable than some
new ones.
If you can pay cash, go the new car way. Enjoy
the feeling of knowing you're the original owner
of a new
car 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 able to afford that
dream car. One day when money is no object.
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