Depreciation or How Not To Waste A Lot of Money
Quiz Time:
What is the difference between buying a new car from a new car dealership with 50 miles on the odometer or a same year car with 51 miles from a used car dealership?
The answer really has a few different aspects.
The first of course is 1 mile.
The second is financing - both dealerships have different banks that offer different rates and terms to you. Bring your own financing and you make this second difference moot.
The third is vehicle history but you can make sure that your vehicle is fine by using www.carfax.com - so that is moot.
The fourth aspect is the biggie. Say you did buy from the new car dealership and negotiated well to get a good deal. You sign the papers and drive the vehicle off the lot and do a U turn back into the lot and ask the very same dealership how much they would buy your vehicle with 51 miles on the odometer for. The answer is going to be $2000 to $6000 less than what you paid for it. You just got hit by new car depreciation. It happens to every new car once it has been titled and driven off the lot.
So, what can you do about it? Simple, you can save yourself by buying a used vehicle where the depreciation has been taken. So go find a 2006 or 2007 model year vehicle with less than 8000 miles on it and you can benefit from that $2000 to $6000 difference that makes the mileage difference pale in comparison. In fact, use that savings and buy yourself your next 10 to 50 tankfuls of gas.
What is the difference between buying a new car from a new car dealership with 50 miles on the odometer or a same year car with 51 miles from a used car dealership?
The answer really has a few different aspects.
The first of course is 1 mile.
The second is financing - both dealerships have different banks that offer different rates and terms to you. Bring your own financing and you make this second difference moot.
The third is vehicle history but you can make sure that your vehicle is fine by using www.carfax.com - so that is moot.
The fourth aspect is the biggie. Say you did buy from the new car dealership and negotiated well to get a good deal. You sign the papers and drive the vehicle off the lot and do a U turn back into the lot and ask the very same dealership how much they would buy your vehicle with 51 miles on the odometer for. The answer is going to be $2000 to $6000 less than what you paid for it. You just got hit by new car depreciation. It happens to every new car once it has been titled and driven off the lot.
So, what can you do about it? Simple, you can save yourself by buying a used vehicle where the depreciation has been taken. So go find a 2006 or 2007 model year vehicle with less than 8000 miles on it and you can benefit from that $2000 to $6000 difference that makes the mileage difference pale in comparison. In fact, use that savings and buy yourself your next 10 to 50 tankfuls of gas.
posted by w00t at
4:56 PM
0 Comments:
Post a Comment
<< Home