Buying used cars, as a means to save cash is really a wise choice these days. The days when used cars meant you had been buying trouble are over; due to new technology cars are staying longer than they did in the past. Today, buying used cars means you can get more car for the money.
There are lots of reasons for purchasing used cars. Probably the most obvious is that the car or truck does not have the big amount of depreciation that comes together with buying a new vehicle. Whenever you buy used someone else already took the big hit of depreciation which means you do not have to.
Let me explain what i’m saying…
The minute someone buys a new vehicle and drives from the smiling salesman, the vehicle loses anywhere from 15 to 40 percent of its value. That is a lot of cash whenever you add it up.
Here’s a story that illustrates what can happen to you without you even being aware of what are you doing.
My pal Jay always bought new cars until the lamp came on and that he saw why he was forever in so much debt with his cars.
It took him over 10 years to get this.
He bought his first car as he was 18 and financed the whole amount. In those days a new car, loaded was $4,000 dollars. (This was some time ago, in the event you were wondering!) Jay never put his own money into any of the cars because of his good credit.
He believed this was the way to buy cars. Pretty cool, he thought. Drive a brand new car and never having to come up with any one of their own money.
After three years he traded that car in on another new vehicle. He was $1,500 inverted. No problem the salesperson said. We can just roll that over into your new car.
So that they did.
You can see the pattern here. He traded every 2 to 3 years and kept allowing this to continue the negative equity each time he purchased another vehicle. Well your day finally came as he had to pay up everything negative equity. It wasn’t a great day when this realization hit him. He was more than $6,500 inverted over his early car-buying career.
It had been at that time that he learned that buying a second hand vehicle saved him all that big loss of depreciation on each car. From that day forward Jay has always bought used cars and never regretted it since.
By the way…
Jay has never been that much upside down again on any one of his cars.
Another way that you can cut costs buying used cars is through insurance, taxes and other related fees that come with buying new. Insurance coverage is most often less for any second hand vehicle than it is for a new car. Taxes and costs are also less on used cars compared to new.
You absolutely purchase that new car smell. People joke about it… however you can end up paying dearly for that new car smell. Buying used cars provides you with the chance to choose a car with increased options and it is less expensive than a brand new one.