Once upon a time, before CarFax, Car Guru and the like, here’s how buying a car went back in the day when your dad or perhaps grandfather bought a car. They would go down to the local dealership in their town, perhaps run by someone they knew back in high school. Their buddy might cut them a deal or take a smaller down payment “for old time’s sake.” Or they would go to a used car lot to pick one out. That transaction probably went something like this: “She’s a beaut, ain’t she?” says the salesman to your dad or grandpa. “Runs like a top, too. Wanna take it for a spin?”
Your dad would take it for a ride while the salesman yammers on about all the cool things the car has (“AM and FM radio!”) and what it can do (“This baby corners like a champ!”). Back at the lot, your dad will walk around it, kick the tires (yes, they used to do that), they come up with a fair price, sign a single sheet of paper, shake hands and off your dad goes with his new used car.
That was then, this is now. Auto transactions have become a tad more complicated. There are many more forms to sign, banks to consult, credit checks run, loans to procure, additions and add-ons to negotiate, warranties to figure out, then you have to decide what make and model from the literally thousands of vehicles out there to buy.
Then there’s the age-old question, new or used? And if used, how used?
But before you even tackle the whole new/used conundrum, you have to look at yourself, where you are in your life and ask yourself — and answer honestly — a few questions.
Are you young and in your first or second job? Or are you middle-aged, have a family and a good career? Are you a student? Do you travel a lot? Do you have a career or job that requires you to drive long distances? Are you a camper, surfer, handyman or have specialized hobbies? Do you live in a rural or metropolitan area? Are you rich beyond measure?
If you answered yes to that last question, well, this article obviously isn’t for you. Just buy that new Mercedes S-Class already!
For the rest of you, you’ll have to answer the other questions first. For example, if you’re young and just in your first job (and we’re assuming your first job isn’t garnering you a six-figure salary), a used car is probably the best way to go.
If you’re settled in your life, making a decent living, but still have a mortgage, young children or children who will be going to college, you might want to depend on the safety features and reliability of a new car.
Once you’ve answered some of those questions, you can then take on the new/used question. The good news is that the Internet can help address those questions for you. The bad news is the Internet is also filled with a raging debate over the whole new/used dilemma too. Perhaps too much.
And the Internet, through websites such as AutoTrader and CarMax, has a ton of information on cars, from specifications and warranty information to reviews and owner history. So you don’t have to rely on the dealer or the salesman to see which car is the best fit for you and your budget. You just have to do your homework before you start your search.
And while the debate continues online about the advantages and disadvantages of new vs. used, the bottom line comes to cost and with cost comes what some experts call “car buying’s dirty little secret” — depreciation.
Depreciation is the loss of a car’s value over time and is the single largest expense of car ownership. It’s said that a new car loses 20% of its value as soon as you drive it off the lot. For a $30,000 car, that’s a loss of $6,000. By the end of its first year, it loses 30% of its value. That’s nothing to sneeze at.
According to the National Automobile Dealers Association, the average person owns 13 cars in a lifetime, at an average of $30,000 per car. So if each of those cars was three years old, you could save nearly $130,000 during your lifetime.
Sounds like a used car is the better way to go, right? Not so fast. Buying a new car has a lot of advantages, too, the first being, duh, it’s a brand-new car, so it’s perfect. No need to kick the tires on these babies. Unless you want to break your foot.
New car buying is much easier. Do a little research online, figure out what you want to pay and go get it. No need to have your mechanic check it out. Dealerships are always offering incentives, discounts, rebates and low-percentage loans to get you to drive away with one of their shiny beauties.
New cars also have all the bells and whistles that older models don’t. And not just things like XM Radio, but safety and comfort features that you won’t find on earlier models.
Two words: factory warranty. The risk you take with a used car is that they tend to break down more often, so that’s an out-of-pocket expense for you. Your new car breaks, you take it back to the dealer and have him worry about it while he gives you a loaner.
Plus, who doesn’t like that new-car smell? They should bottle that stuff and sell it as a fragrance! Wait! They do. In a handy spray so you can recapture the rapture whenever a case of Buyer’s Remorse begins to brew.
So there are advantages, and disadvantages to both sides. But before you decide, do your research. Automotive websites, such as Kelley Blue Book’s 5-Year Cost to Own or Consumer Reports’ Cost of Vehicle Ownership, can help in that regard.
Or as Consumer Reports says, “There is not a single sound-bite solution that suits all scenarios. While purchase price is a natural focus, don’t look solely at the cost to buy, but how much the vehicle will cost to own over time. Factors such as depreciation, insurance, financing, fuel costs, and other operating expenses can quickly add up through the years and may make that deal not look so good after all.”
All books are available at amazon.com. Click on title to learn more.
Buying a Car For Dummies 1st Edition
by Deanna Sclar
How To Buy A Used Car: A Complete Guide From Start To Finish On How To Buy A Used Car; From The Perspective Of An Experienced Licensed Car Dealer
by Dr. Zeke
Don’t Get Screwed When Buying a Car
by Drew Eubanks
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