Economics of New Car buying
 

Found this on the Dave Ramsey web page - a financial advice guy who promotes getting out of debt and living within your means.

This is a slideshow talking about how much money people REALLY spend when they buy a car.

http://www.daveramsey.com/etc/lms/drive_free/player.cfm

I've seen this before and I must say, it is an excellent slide show. Some of the financial math is boiled down a bit much at the cost of accuracy, but it still proves the point (don't tell me car prices won't go up in 4, 6+ years, with inflation). What impressed me more the the message was the actual show :)

Intellichoice
 

I got bored at an airport terminal and bought the "Intellichoice Used Car Buyers Guide". My life was changed forever...

Intellichoice.com

Basically, it outlined the depreciation of vehicles over the last 5 years. ALL but 2 models depreciated drastically in the first year (In this case, the Mini Cooper and BMW 3-series appreciated in the first year, but took a nose dive thereafter).

The advice? Buy at least a 3-year old vehicle to avoid hassles of depreciation, but remember not fall victim to high miles and older models (unless you're a good wrencher).

I love my payment-free, 10-year old 'Teg. The money saved, goes to -- umm, well, my wife's new TSX :o It was her turn to get the new car, and I'm driving her car she bought new in '97. Works out, right? Maybe :rolleyes:

My next car will be used. That's for sure.

RH77

Hello -

Ha ha, yeah I did this calculation with my mechanic the other day. If I had a new car, I would probably have a payment in the $300 range. That's $3600 a year. If I pay $1800 in unscheduled repairs, I would still have $1800 in my pocket, in addition to lower insurance.

In the last few years, I think I have transmogrified into a used-car-only person. Most of the cars I end up "wanting" go out of production before I am tempted to pull the trigger anyway, :o .

The 25% loss driving off the lot is a real version of my computer joke to people. It's a play on the 3-Step Poisonous Snakes in Vietnam :

When you buy a PC at Fry's, the PC loses 10% of it's value on your first step out the door. On your second step, it loses 25%. On the third step, it's lost 50% of it's value ... Time to get a new PC!

(my notebook PC is 5+ years old)

CarloSW2

Another advantage to buying a used car is that you can look at the Consumer Reports reliability records, whereas when buying a new car, all you can do is hope that the new model will be as reliable as the previous year's models.