5 Reasons Not to Buy a New Car!

A car is transportation, it is NOT a big hunk of ego sitting in your driveway. When thinking about a new (to you) car consider what you really need, fit those needs and nothing more. For various reason cars are one area of a lot of our lives where we don’t align our family economics with our choices. For some reason a lot of people have no problem choosing to work longer and put off an early retirement in order to have shiny new cars sitting in the driveway year after year. Here are a few reasons that you should NEVER buy a new car.



 

  1.  Depreciation – we all know that a vehicle looses value the minute you drive it off the lot. The amount varies per vehicle, but at a minimum you can count on a 10% drop in value. So, in other words if you turn around and try to sell you would have a big loss. If you buy used that loss has already been accounted for so you’re not paying new car premium. Car lots are overloaded with very low mile late model cars. Based on this there is no reason to buy new.

  2. You will pay more interest – since a new car is more expensive than a used car, you will likely need a bigger loan to buy it, you will therefore likely spend more on interest. See Compound Interest, He Who Doesn’t Understand it Pays it. if you need a refresher on how paying interest on things makes the things you buy more expensive.

  3. Insurance is more expensive on new cars – more expensive cars cost more to insure. It’s just a fact of life, if the insurance company has more at risk they charge more. It may not seem like a huge difference, but over the life of the vehicle it can really add up.

  4. New cars can actually require more maintenance – this one may leave you scratching your head. But, if you’ve ever bought a new vehicle to find out a couple years down the line then you know exactly what I’m talking about. It happened to me, a few weeks after the warranty expired… When you buy used there’s a lot more information on the vehicle quality, and you are able to do more research across how a variety of brands have performed. Make sure that you do your research, visit consumer reports – used car buying guide.

  5. It’s terrifying to drive an expensive new car – ok, I’m just guessing on this one. I’ve never driven an expensive car, and frankly worrying about a door ding has never even occurred to me. I can imagine that I would be a train wreck driving an expensive car around town, or parking it pretty much anywhere…



 

You can find plenty of great low mile late model used cars that may actually be better than a new car for significantly less money. This choice is a no brainer.

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