Saturday, February 18, 2012

Cars: Used Vs. New

I calculated with car insurance, car payments, gas, and car maintenance the average car costs about $11,000 a year, about as much as a child. Some cost much more with super long loan packages car dealers are pushing now. If you think 22,000 is a lot for a new car, consider you will have paid twice that and more when you finally pay off your six year loan.

Buying a car is like buying a house if you don’t have any money for a down payment, then you don’t need to buy one. New cars get better interest rates and dealers seem to be able to offer you better deals, and they’re new. What’s not to like?

The 25% to 40% depreciation the car gets by being driven off the lot. The car that loses value the fastest, is the Audi which has an el stinko resale value. Cars that hold their value well include Toyatas, Mustangs, and almost any hybrid. If you plan on keeping the car for a long time, and you have major money to put down, and a trade-in, a new car might be the way to go. Bargain for the car get an added maintenance package thrown in or extended warranty.

Do you plan on using the car for only a few years or only for business, then, a lease might be the way to go. While a lease saves you money monthly, you have nothing when the lease is done. Dealerships also ding you heavily for every scuff, every spilt cup of coffee, and extra mile. Leases are not for people with children or pets.

A used car might sound like your best bet, except it can be someone else’s lemon. When you buy a used car, pay cash for it, plus make sure the car has a savings account. You will need it for the repairs. It is great if you can track down a little old lady that only drove her Mercedes sedan to church once a week. Bring a mechanic with you to check out the car though. Sellers are often not totally truthful when ridding themselves of an unwanted car.

Regional issues come into play when buying a car, in the snowbelt check for rust since road salt tends to eat away the undercarriage. Living in one of the sun drenched southern states, beware of black used cars since their paint tends to blister, fade and peel much sooner than the light colored cars. Who wants a black car in Florida, anyhow?

If you are in a market for a car, remember regular maintenance. Some foreign made cars can only be serviced by a dealership that is probably not in your area. High end cars, even used ones, have high end repairs. Extremely old cars do not have replaceable parts. They quit making them. Keep this in mind, for particular brands they have recently stopped manufacturing such as Saturn.

Consider how you are going to use the car before deciding on new or used. Please shop around, do not go with the first car you see. Bargain, tell the salesman or seller you want to look elsewhere. Offer less money and ask for more. Decide on a particular price you can afford, don’t budge on it. Getting a loan, don’t go over three years unless you want to buy the car again. Trust me, dealerships don’t want the short loan because they make most of their money in financing and not on the actual car.

Currently with the tax season on us, is an excellent time for car shopping. Be strong, getting out a car lot without a six year loan is right up there with escaping a time share visit without owning a week in Pigeon Forge Golf Resort. Take a friend, spouse, or relative, who will play the grump who won't change his/her mind on price or terms, if you feel you can't do it.