Which Is Better Preowned Cars or New Cars?

Should you buy used cars or new ones?  Keep in mind that a shiny new car loses value the second the tires touch the pavement outside the car dealership lot.  The answer is a lot easier with that information.  Since a car is a depreciating asset, meaning in general cars lose value with time,  the best money decision is to purchase the car when it will tend to lose less value.  Balance that with the time when the car won’t need as much repair work.  The slightly used car is about the best for both concerns.  The big hit to car value has already occurred.  Someone else got robbed by that decrease.  The car is still in good condition, often still under warranty, so that it won’t have need for constant and costly repairs like  an older model car needs.

There are many places to look for late model used cars.  People who buy or lease new cars trade in their old ones to the dealer.  Those vehicles are looking for new owners.  eBay has a whole division dedicated to used cars, while specialty companies such as Carmax list thousands of them.  Speaking of auctions, most cities have a lot of auctions taking place every day.  These include police auctions of impounded vehicles as well as dealer auctions that might involve, for example, cars purchased from car rental companies.

Kelly Blue Book is a valuable resource to determine the relative fair price of a used car.  It lists cars by year, then the general prices for those cars in various conditions from excellent to poor.  Sale by an individual or dealer is also shown.  Dealers have overhead private sellers don’t have so that is important.

What about financing a discount used car?  The better idea is to save money to make a cash purchase.  No matter how low the monthly payments or interest rate, paying cash is better.  Sure, people like the fancy models.  Remember, however, that even simpler models get from point a to point b.  That can even mean a less stressful life.  Theft, wear and accidents are bigger worries for people with fancy cars.  Not that used car owners like to drive junk, but a little ding or dent means less on a simpler model.

Sure cars are a status symbol, but wealth isn’t based on what you spend.  Wise spending turns into wealth.  There are people living hand to mouth even though they earn a lot of money.  Saving money on a used car can be one step to being wealthy.

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