New-car smell or used-car price?
Used. Pre-owned. Previously enjoyed. Gone are the days of the shark-skin-suit used car salesmen offering old heaps that were owned by little old ladies who only drove to church on Sundays. Today, used cars are not only a safe buy, they make good financial sense.
I did a bit of research on this and came up with a general rule that a car will depreciate about 20% per year. Now, I’ve seen some ridiculous depreciation estimates like 30-40% as soon as you drive it off the lot. All I can say is that if you know someone who is willing to sell their car for a huge discount after driving it off the lot then buy it. Has anyone ever sold their car on the day they bought it?
In the end, all things have a price and, of course, there’s that new car smell, often at several thousand more dollars. Is it worth it? If you are looking to stretch your vehicle-buying dollar as far as possible, it’s hard to argue against buying used! I think the biggest issue with new cars is the massive depreciation after the first year. If you are a new car person, why not buy an “almost new” car that is one or two years old? At least that way you still get the new car feel, intact warranty, AND you don’t need to pay for the initial 20% depreciation.
While the new car smell can be quite inviting, don’t forget to do the math. STEERING YOU IN THE RIGHT DIRECTION, Barry Jackson