Real Life Money and Credit

Everyone loves getting a new car. Everything is perfect. There are no scratches, no wear and tear, and it has that new car smell. But all those things go away with time, and you’re left with the car payments of a new car.

Surprisingly (to me at least) you can get an almost new car for much less money. Car dealerships have a huge selection of low mileage late model used cars. I don’t know where these barely used cars come from. I recently saw a 2008 Infiniti G35 with 17,000 miles for sale at an Infiniti dealer California. There’s a 2009 Ford F-150 available for ,000 at a dealership that sells new and used cars Palm Springs.  And a 2008 Nissan Sentra for ,000 at a Los Angeles Nissan Dealer. Who bought this brand new car and then gave it up before it was more than a couple of years old? Maybe they defaulted on their loans.Perhapes they trade in their car for a new one every year? Go figure?  The point is that you can get it for far less than they paid new – and it’s still a relatively new car!

Pricing

Logic would seem to tell us that a used car’s price should be it’s price when it was new, less the miles that have been driven, any damage, and of course depreciation because last year’s model is not as desirable as this year’s model. That depreciation is often a significant percentage of the price. If you had bought that same car a year ago, you’d still be happy with it, even if a newer model was available now. You would probably still owe more on it than it’s worth on the open market. But many people want the most current model when they purchase a car. Inside of a year, they’ll own a used car.

So why not get the benefit of this bias which excessively lowers the market value of used vehicles? Decide on a model you like. Most car dealers will certify vehicles that are in good condition and have a limited number of miles. Financing is available on a used car, just like on a new car. Most of these used cars are still under their original warranty, and the dealer usually offers extended warranties.

What Has Been Learned Since the Car Was New

Sometimes when a car comes out, there are problems that no one is aware of. Consumer Reports and others review the new cars and publish their findings. But they only have a short window of time in which to complete their testing. Some information, like how reliable a car is just isn’t available until thousands of them are on the road over an extended period of time. When you are buying a used car, you have access to some of this information before you decide. Also, even the best-built new cars have recalls over the first few years. With a used car, many of these problems have already been taken care of.

If you are watching your budget, like everyone else is, think about getting a used car with low mileage. A car dealer who sells new cars is the best person to buy a good used car of the same make from. You’ll find a good selection, sales people who are familiar with the car, and factory trained technicians who can service your car going forward.