Before you buy your next car, you need to know why buying a new car isn't smart business. That's right! In many situations, buying a used car is much smarter than buying a brand new vehicle.
Why isn't buying a new car smart?
First of all, the moment you sign the papers to purchase a new car for many thousands of dollars, depreciation will immediately kick in costing you several thousand dollars. Once you drive away in your brand new, nice smelling car, its value will drop by as much as ten percent. That's a lot of money just to get to see the odometer have all zeros on it!
Sometimes new cars present service hassles. Perhaps everything wasn't adjusted just right at the factory. These things weren't found during the quality checks and you may have to return to the dealer several times to get changes made, parts tightened or adjusted or to have parts changed that don't work right. Time is money and therefore, you lose money because you lose valuable time.
Many people buy new cars because of easy financing. Sometimes you can even get a factory rebate with a cash-back option and get money to put in the bank. There's a catch! YOU pay that money over the life of your new car loan.
Some people say that buying a new car is smart because of the warranty. If you choose a used, late-model vehicle from a reputable dealership, you may find that they also provide a warranty for the vehicle or offer you the option of adding or extending the warranty options for a reasonable price. While the warranty won't last as many years as on a new car, the difference in the price you pay will usually cover any difference in repair costs.
Another reason why buying a new car isn't smart business is because of all the hidden costs in the price of a new car. There are dealer costs, transportation costs, and other hidden costs that are included in the price you pay. When a used car is purchased from the same dealer, there are no hidden costs included in the price.
If you agree that buying a new car isn't smart business, shop around until you find exactly what you want in a slightly used car. Some people buy a new car every year or two and their trade-in vehicles are in great shape. You will save a lot of money while getting a car that looks almost brand new and performs like brand new. Why throw money down the tubes when you know why buying a new car isn't smart business.
