New or used: The debate continues
Should you buy New or Used? This is a question I often get asked and the answer really depends on the type of buyer you are, however I will tell you that most millionaires actually buy used over new.
If you are a value minded individual and are willing to invest a little time in shopping for your ride, then a used vehicle is the way to go.
Even the best vehicle at holding it’s value, the Mini Cooper, has a residual value of 86% currently, thus proving the fact that vehicles are depreciating assets at best.
This is why most people who are smart enough to make and hold on to a million dollars or more tend to go used.
That being said, when you buy used, you need to be more careful than when you buy new; you are buying a used complex piece of mechanical equipment. You will want to do your research on how reliable the vehicle is and what types of price range it should be in.
When you have picked the vehicle out, you should have it mechanically checked, see a CARFAX and make sure the title is clean. If getting the most for your money is your main objective than used is the way to go.
New vehicles may still work for you if the following is true; you prefer to be the only one who has owned your vehicle, having an extensive warrantee is important to you, you are planning on owning the vehicle for seven years or more, you put normal miles on your vehicles or there is a great factory incentive that makes it advantagous to you, like 0% for 72 months.
There have been a few times in my career that it was economically more effective to buy new rather than a late model used vehicle because of the incentives. Payments were actually lower on the new vehicle vs. the late model used vehicle because of the interest rate incentive.
If new is for you, your goal should be to keep your vehicle for at least seven years, that is when you have gotten the best use out of it on a yearly cost basis.
A new vehicle depreciates the most in the first two years of service. After that, the depreciation percentage becomes less and less, so for every year you keep your new vehicle after the two years you will be lowering you annual cost of usage on the vehicle.
New or used is a question that only you can answer. The key is to research and balance your needs with your wants and make sure you pay attention to the overall economy of what you are looking to do. Good luck and good shopping.
Cory
Ask Cory your car question
To ask Cory a question about buying, selling, or trading a car, just place it in the comment section and your question with Cory's answer will be incorporated in an upcoming post. It's that simple!
If you are a value minded individual and are willing to invest a little time in shopping for your ride, then a used vehicle is the way to go.
Even the best vehicle at holding it’s value, the Mini Cooper, has a residual value of 86% currently, thus proving the fact that vehicles are depreciating assets at best.
This is why most people who are smart enough to make and hold on to a million dollars or more tend to go used.
That being said, when you buy used, you need to be more careful than when you buy new; you are buying a used complex piece of mechanical equipment. You will want to do your research on how reliable the vehicle is and what types of price range it should be in.
When you have picked the vehicle out, you should have it mechanically checked, see a CARFAX and make sure the title is clean. If getting the most for your money is your main objective than used is the way to go.
New vehicles may still work for you if the following is true; you prefer to be the only one who has owned your vehicle, having an extensive warrantee is important to you, you are planning on owning the vehicle for seven years or more, you put normal miles on your vehicles or there is a great factory incentive that makes it advantagous to you, like 0% for 72 months.
There have been a few times in my career that it was economically more effective to buy new rather than a late model used vehicle because of the incentives. Payments were actually lower on the new vehicle vs. the late model used vehicle because of the interest rate incentive.
If new is for you, your goal should be to keep your vehicle for at least seven years, that is when you have gotten the best use out of it on a yearly cost basis.
A new vehicle depreciates the most in the first two years of service. After that, the depreciation percentage becomes less and less, so for every year you keep your new vehicle after the two years you will be lowering you annual cost of usage on the vehicle.
New or used is a question that only you can answer. The key is to research and balance your needs with your wants and make sure you pay attention to the overall economy of what you are looking to do. Good luck and good shopping.
Cory
Ask Cory your car question
To ask Cory a question about buying, selling, or trading a car, just place it in the comment section and your question with Cory's answer will be incorporated in an upcoming post. It's that simple!
posted by Cory Fosbenner at
12:08 PM
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