Why buying used cars can save you thousands of dollars

Why is a used car a much better buy then a new one? To sum it up in one word, depreciation! Few car buyers realize that it can be the largest expense in owning a vehicle. What is it? It’s the decline in value a new car loses the minute you drive it off of the showroom floor. Remember, you paid retail for that automobile and the difference between that and the wholesale cost comes right out of your pocket the minute you take delivery. That number could be substantial and it just gets worse after that point. It’s a known fact that a new car can lose 15% to 20% of its value each year. Certain models, even luxury ones, can take a 50% hit in value within the first three years of ownership.

How can you use this
information to benefit yourself?

It’s simple, buy a used car and let someone else take that loss in value for you! The right used car can be an excellent value, providing years of use at minimal cost, but you’ve got to do a little homework and become a smart buyer. Brand, model, and condition of a car all contribute to a used cars value. Some brands depreciate much slower then others and do a much better job in holding their value from year to year. Edmund’s Automotive Buyers Guide and Kelly Blue Book both have web sites loaded with information on resale values of used cars.