Why Always Buying a Used Car Changes Your Financial Life for the Better
Ah, the smell of a new car! The seats have never been sat in (well, except perhaps by testers). The steering wheel has never been turned. The trunk has never been opened.
The hubcaps shine, the dashboard glistens, there’s no dirt on the windshields. It’s pristine. It’s beautiful. It’s new.
And it adds nothing to your bottom line and instead takes considerably from it!
After all, would you really want to be given $33,500 and in two years realize that it’s now worth $21,400? That’s what you actually do when you buy a new car. The average cost of a new car in 2015 was about $33,500, according to the Kelley Blue Book. Because a new car depreciates by as much as 11 percent as soon as you drive it off the lot and then continues to do so at a pretty alarming rate until it’s about two years old, it’s truly a bad financial move to buy a new car.
Do this again and again and again and you’re wasting – at the $33,500 price point — $3,685 right after you buy it each and every time you buy a new car. Two years later, your $33,500 car is now worth just $21,400, a loss of $12,100. Do that twice in four years and you’ve just lost $24,200, enough to have purchased a great two-year old car four years before!
Buying a two-year old car means that its first buyer paid for its extreme depreciation for you! In other words, buying used lets you reap the benefits of the first buyer’s financial foolishness!
Run to the bank to deposit all the money you save when you buy a used car rather than a new one.
If you still don’t see how buying a used car every time you buy a car will improve your finances for the better, take a look below.
- If you have the money to buy used, take the savings when buying a used car and invest it.
- Or you could simply save it, keep adding $200 a month or so to that savings and pay for another great two-year-old car in five years for cash!
- Use the money you saved and pay off some credit card debt, your student loans, pay for a wedding, a nice trip – or two – to a place you’ve always wanted, and so on.
In other words, saving money by buying a used car rather than a new one improves your life overall, because improving your finances naturally leads to a better life in general.
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