Used Cars

New cars or used cars, which are the better deal? Keep in mind that a shiny new car loses value the second the tires touch the pavement outside the car lot. Now that question is an easy one. Buy the car after it has taken the biggest value hit. Maintenance costs are also a factor. 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 auto is likely still under warranty and isn't in a state of needing constant work.

Many sources provide these slightly used cars. Car lots have a lot of traded in cars. The dealers want to sell those cars. eBay has a whole division dedicated to used cars, while specialty companies such as Carmax list thousands of them. There are car auctions in every city. 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. Cars are shown by year, model, then with prices shown for various conditions. 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 used car? The better idea is to save money to make a cash purchase. No matter how low of an interest rate or how low the monthly payments, nothing helps the monthly budget like not having to make any car payment. 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. Not that used car owners like to drive junk, but a little ding or dent means less on a simpler model.

Wealth isn't made by spending, even on a car. Wise spending turns into wealth. There are people living hand to mouth even though they earn a lot of money. Good used cars are a way to save.