Depreciation

Yes, we all know how fun it is to walk onto an automotive lot and pick out a brand new car for yourself.  But in fact, from the dazzling glitter of that fresh paint job to the heady smell of a new car, what you’re really paying for is the metaphorical sizzle, not the steak.  The sad fact is that just as soon as you drive that car off the lot, it will lose as much as 40% of its value.  Why?  There are several reasons.  First, there’s a big difference, if you’re a potential buyer, between a car with 20 miles on its odometer and a car with 0 miles.  If these two cars were both the same price, which would you buy?  Thus, dealers have to must barely-used cars down to get people to buy them.  But that’s not all.  Drive a car for a day and return it, and any other potential buyers are going to be wondering why.  Is the car a lemon?  No one wants to get saddled with a car that doesn’t work, so others will probably steer clear of that model of car.

Does it work?

And that same factor also plays into why you should go used instead of new when purchasing a car.  Walk onto a car lot, take a look at the newest models, and all you’re going to hear from the salesman is how wonderful these cars are.  But how do you know it’s true?  When you buy used, you protect yourself from buying a substandard car, because you can do research and see what previous owners have thought.  With a new model of car fresh off the assembly line, that’s not an option.

The Economy

Lastly, with the economy in the shape it’s in right now, the last thing you need is $20,000 of debt sitting on your credit report.  How do you know you won’t lose your job tomorrow?  So, for all these reasons, I urge you to buy used cars.