Preowned Cars Vs New Cars

Are preowned cars or new cars better?  The moment a new car leaves the dealership it's value falls.  Now that question is an easy one.  Because autos depreciate, make the purchase only when it will lose the least value after you own it.  Balance that with the time when the car won't need as much repair work.  Those are most balanced in the late model used car.  The big hit to car value has already occurred.  Someone else absorbed that loss.  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.

Late model used cars are available from a variety of sources.  Dealerships take in trade-ins from customers who purchase or lease new vehicles.  The dealers want to sell those cars.  Companies like Carmax and eBay motors have tens of thousands of used cars available for browsing.  In America there are car auctions every weekend.  These include police auctions of impounded vehicles as well as dealer auctions that might involve, for example, cars purchased from car rental companies. 

The most trusted source for used car prices is Kelly Blue Book.  It lists cars by year, then the general prices for those cars in various conditions from excellent to poor.  It also breaks down the prices between dealer sales and private sales.  That does make a difference because dealers have overhead that private sellers do not have.

What about financing a used car?  Think about saving up the pennies and making a cash purchase.  That saves money in the long run.  Yes, cars are status symbols.  But consider something a little simpler with a few less bells and whistles.  That not only helps your bottom line, but your blood pressure.  People who own the luxury cars worry more about them.  Many used car owners take pride in their cars, but don't worry over a ding or two. 

With wealth it's not what you buy.  Net worth comes from saving.  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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