As long as you can afford it, do you prefer to buy new when you buy a car?

[underahedgerow]

6. Used. Only Ever. And here's why;

Unless you get a 0% loan or pay in full in cash, it's a really, really bad investment.

Say the car costs 25,000K. Factor in that 3.25% interest rate for 36 months (if you've got a great credit score), and you'll pay another 1200 bucks just to own that car. Yet, after 36 months, that car is worth probably half of what you've paid for it, maybe less. And on top of that, if you've only put down 500 bucks, your monthly payment is over 700 bucks. Imagine, 700 bucks to drive a car for 3 years, not to mention insurance. So by the time you've finished paying for it, you've got a piece of equipment that hopefully will last another 2 years at least, during which time it continues to dramatically decrease in value.

Would you buy a house for 100K and sell it later for 50K and think you've done well? Of course not.

For 10,000 bucks cash, you can buy (someone else's car that they paid 26K for) a 3 year old car, and if you drive it for just 2 years, you'll have paid an average of 400 bucks a month, not to mention much lower insurance. Drive it and care for it for 4 years, and you're down to just 200 bucks a month to own that car, etc.

A car is a tool. Marketing however, has lead us to believe it's an image statement, that a car defines who we are, that it's sexy, or sporty, or denotes affluence, that it's all about our personality.

Take away all that, and buy a car that is comfortable, suits the purpose, is easy to drive, easy to get in and out of and has air conditioning, a decent radio, a navigation system and will perform economically in the types of conditions that you live in, and you can buy a nice car for under 10K. Think practical instead of 'image'. Function over form. It's just a car. It's just a tool.

My favorite car ever was the Toyota Scion. I bought the dealer demo for 11K cash off the lot, at a 3K discount. I drove it, loved it and sold it a year later for 11K. Cash. Now that's a deal.

I did the same with my Mazda Miata. Bought it for 8K and sold it about 1.5 years later for 9,500. That one increased in value, because it was in such great condition.

Buy low, sell high, right?