I've got great advice and it's high time I start sharing. Now, I'm not original with this next piece of advice, but its worth repeating. In the market for a new vehicle? Should you buy new or buy used? Some would say it depends. I wouldn't. Like many things in life, there is a right and wrong anwer, at least from a financial perspective. Contrary to what I would like to believe, cars aren't investments. They are money pits. The trick is to minimize your cost over the life of the car. The solution: buy used. It's that simple. Instead of comparing the purchase price alone, I think a better measure is to estimate the $/mile, or $/year. Let's assume you buy a Honda Accord, keep it for 6 years, put 100,000 miles on it, then sell it. Should you buy new or used? Compare the following two scenarios:
New
2008 Accord EX Sedan (New, V6, Automatic, Leather)
Selling Price(after 6 yrs & 100k miles): $10,740 (Based on 2002 Accord EX Sedan w/100k miles)
Cost per mile: $0.18
Cost per year: $2992
Purchase Price: $14,760 (Kelly Blue Book, Private Party Value)Selling Price(after 6 yrs & 100k miles): $5,690 (Based on 1997 Accord EX Sedan w/160k miles)
Cost per mile: $0.09
Cost per year: $1511
I didn't consider taxes, fees and maintenance. If you were to do the math, they don't really factor in. You pay higher taxes/fees for the new car and higher maintenance for the used car. In the end it's a wash. The point is that you end up paying twice as much per mile or per year for a new car than you would for a used one. You might object that my comparison isn't a fair comparison, since one car is new and the other used. What is different about these two cars, besides the new car smell? There isn't one. They are both extremely reliable and are very unlikely to leave you stranded by the side of the road. If you take care of your car, you really shouldn't expect any major problems before 160,000 miles, especially those with good reputations, like Hondas & Toyotas.
Next time you think about buying a new car, consider getting a used one instead and just giving it a good shampoo. That way you get a new car smell at half the price.
3 comments:
You are bossy, but this is good advice. I do think a new car will always be nicer than a used car, but that to me that is not worth paying twice the price. I like used cars that are still pretty new. You are right that a good detailing can do a LOT to make a used car clean and nice. Of course we have to feel this way since we just bought used.
Yeah, don't new cars depreciate in value the most in the first 2 years? I've heard you should buy a 2-year-old car if you want something new.
great advice.
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