My very first car cost me under $1,000.00. Granted it was a 1992 Buick Roadmaster with the tackiest fake wood siding and took about three turns of the key to start, Shelly successfully transported me to high school and back, even in the snowy tundra that is winter in New England. She eventually died on me during a road trip to Montreal, but the way her exhaust pipe was sputtering , she was beginning to sound like an old French woman who smoked too many cigarettes. I figured Quebec was suitable enough for her final resting place.
Buying a new car is never a good investment. Unlike property, vintage wine, and the Princess Diana Beanie Baby (if you don’t believe me, a quick Google search will dumbfound you), a car’s value does not increase over time. As soon as you drive a new car off the lot, its value begins to depreciate. So why does it seem like everyone is driving a new car?
The truth is, if you can afford to buy a new car without any financial struggle and are not saving up for any long term purchases, then by all means, splurge on the leather upholstery, heated seats, and 1.5 million horsepower engine. However, if you are like a majority of Americans and buying a new car would be a stretch, it may be a good idea to consider purchasing a used car.
Bottom line: like clothes purchased at a thrift store, buying a used car allows the consumer to save a ton of money off the original price. While you are not its first inhabitant, if you treat it right, your used car should last you just as long; depending on how many miles it has been driven. You can usually buy a quality used car anywhere between $5,000 and $12,000. If you don’t have enough money to pay in a lump sum, a lot of dealerships will allow you to finance, so you can also build credit and pay off the total price in a quarter of the time it would take you to own a new car.
The same logic can be applied to a number of other large purchases, such as refurbished computers, used refrigerators and microwaves, and televisions sets. Just last week, my co-worker purchased a TV and got $150.00 knocked off the total price since she bought the floor model. Case in point, she saved money and left with the same warranty as if she purchased an unused one.
With the money that you save, you can set it aside for those really important life purchases, like a new home, or that Princess Diana Beanie Baby you’ve been wanting since 1997.