Worth Buying A New Car [CRACKED]
According to Ben Le Fort, buying a new car is a really bad idea. He calculates that if you make the median salary, financing, depreciation, gas, maintenance, and insurance cost 25% of your after-tax income.
worth buying a new car
Edmunds only looks at the first 5 years of ownership, so we need a hack to calculate costs for 10 years. We estimate that by summing the 5-year cost of buying new to that of 5-year-old vehicles of the same model.
To summarize, depending on the car you choose, buying a non-luxury car new and keeping it for 10 years costs about $6000 a year on average. Of our examples, the least expensive was the Soul at $5623/year, and the most expensive was the Camry at $6334/year.
For the Camry hybrid, buying used saves about $45 a month. You may choose go for that savings; or you may prefer to drive a new car for the first 5 years of its life, especially if you make significantly more than the median salary.
Having said all that, the above method gives you a reasonable handle on how to think about the cost of buying a new vehicle and driving it for 10 years vs. the cost of buying a 5-year-old model and keeping it for 5 years until it reaches the same 10-year age.
But many Americans make big mistakes buying cars. Take new car purchases with a trade-in. A third of buyers roll over an average of $5,000 in debt from their last car into their new loan. They're paying for a car they don't drive anymore. Ouch! That is not a winning personal finance strategy.
"The single best advice I can give to people is to get preapproved for a car loan from your bank, a credit union or an online lender," says Philip Reed. He's the autos editor at the personal finance site NerdWallet. He also worked undercover at an auto dealership to learn the secrets of the business when he worked for the car-buying site Edmunds.com. So Reed is going to pull back the curtain on the car-buying game.
And shop around for the best rate. "People are being charged more for interest rates than they should be based upon their creditworthiness," says John Van Alst, a lawyer with the National Consumer Law Center.
So Reed says having that preapproval can be a valuable card to have in your hand in the car-buying game. It can help you negotiate a better rate. "The preapproval will act as a bargaining chip," he says. "If you're preapproved at 4.5%, the dealer says, 'Hey, you know, I can get you 3.5. Would you be interested?' And it's a good idea to take it, but make sure all of the terms, meaning the down payment and the length of the loan, remain the same."
So at the dealership, Reed and Van Alst both say, the first step is to start with the price of the vehicle you are buying. The salesperson at the dealership will often want to know if you're planning to trade in another car and whether you're also looking to get a loan through the dealership. Reed says don't answer those questions! That makes the game too complicated, and you're playing against pros. If you negotiate a really good purchase price on the car, they might jack up the interest rate to make extra money on you that way or lowball you on your trade-in. They can juggle all those factors in their head at once. You don't want to. Keep it simple. One thing at a time.
Once you settle on a price, then you can talk about a trade-in if you have one. But Reed and Van Alst say to do your homework there too. A little research online can tell you what your trade is worth in ballpark terms. Reed suggests looking at the free pricing guides at Edmunds.com, Kelley Blue Book and NADA. On Autotrader, you can also see what people in your area are asking for your car model. And he says, "You can get an actual offer from Carvana.com and also by taking the car to a CarMax, where they will write you a check on the spot."
"Concerning the extended factory warranty, you can always buy it later," says Reed. "So if you're buying a new car, you can buy it in three years from now, just before it goes out of warranty." At that point, if you want the extended warranty, he says, you should call several dealerships and ask for the best price each can offer. That way, he says, you're not rolling the cost into your car loan and paying interest on a service you wouldn't even use for three years because you're still covered by the new car's warranty.
"We're actually living in a golden age of used cars," says Reed. "I mean, the reliability of used cars is remarkable these days." Reed says there is an endless river of cars coming off three-year leases that are in very good shape. And even cars that are older than that, he says, are definitely worth considering. "You know, people are buying good used cars at a hundred-thousand miles and driving them for another hundred-thousand miles," says Reed. "So I'm a big fan of buying a used car as a way to save money."
NPR has a personal finance Facebook group called Your Money and Your Life. And we asked group members about car buying. Many said they were shocked by how much money some other people in the group said they were spending on cars. Patricia and Dean Raeker from Minneapolis wrote, "40 years of owning vehicles and our total transportation purchases don't even add up to the cost of one of the financed ones these folks are talking about."
It is no secret that vehicle troubles are less than ideal. The worst-case scenario for many drivers is finding themselves with a blown engine. So can your engine problems be repaired? Is an engine replacement worth it? Or should you invest in a new vehicle? The mechanics at Chapel Hill Tire are here to answer all of your engine replacement questions.
How else will you save money by buying a used car? Insurance companies reward drivers who purchase used cars with lower rates. Since insurance rates are determined by the value of the car, used cars are cheaper to insure and cover if, for instance, they are totaled in a wreck. New cars are usually more expensive to replace or repair (thanks to all those bells and whistles), which is why insurance companies charge higher rates.
Most of these vehicles are nearly as expensive after a year as they are when buying new. This means it might be worth your money to pony up to a current model year and pocket the extra year and miles of new-car warranty that come with it.
AtBalise Subaru, we know buying a new car is a huge commitment, but we'rehere to help you ease your mind. There are many benefits of purchasing anew carfor your travels around Warwick, Providence, Cranston, and Pawtucket. And if you've never shopped with us before, Balise Subaru is your resource for a giant inventory and selection of new vehicles.
Unless you are a race car driver needing more consistent pressure from your tires, the additional cost is not worth it. If you really want nitrogen, stopping by a local body shop will you cost $10 to $30 per tire.
Situation: Car dealers are heavily promoting new car sales. Your client is thinking this might be the right time to buy and wants to know whether the tax incentives for buying a new car are worth it.
More than half of all used car sales are made by car dealers. The best used cars are often those found within manufacturers' approved used schemes. You'll pay more for them, but the customer experience isn't that far removed from buying new.
Private purchases will give you better prices, while buying at auction will generally be the cheapest route to buying a used vehicle, but genuine bargains are rare and buyers have little comeback with sellers.
The biggest downside of buying used is uncertainty about a car's history. 'Clocking', or tampering with the recorded mileage, is still an issue. Ideally, a car will have a complete service history: if not, you can buy some reassurance in the form of a history check.
Nearly new cars will have covered up to a few thousand miles. Not enough to have any impact on their appeal or driveability, but enough to take that 'new car' feeling away. For some buyers, that's reason enough to avoid them. Others will appreciate the fact the saving they represent over buying new.
It's important to confirm the build date of a pre-registered car with the dealer before you commit to its purchase. You might think you're buying a 2016 car, but it could actually be a 2015 model. This will obviously hit its value when it comes to sell it on.
The key thing to remember when buying any car is to set a budget and stick to it. It's a buyer's market. If you can't reach agreement on the car of your dreams, don't worry: somewhere, there'll be another one that's just as good.
It's no secret that prices of both new and used cars in Australia have increased over recent months. With the average purchase price of a new car in Australia now more than $40,000, and used cars not far behind, it's no wonder many car buyers are hesitant. However, the simple fact is that car sales figures are still relatively high. This means prices are not likely to come down significantly anytime soon. So, if you're thinking about buying a new car, it's best to start saving now!
There are a few things to consider when trying to figure out if it's worth buying a new car. The first is whether you can afford it. If you have the money saved up and don't need to finance the purchase, then it's worth considering. However, if you need to take out a loan or put the purchase on a credit card, it's important to factor in the interest you'll be paying.
The third thing to think about is whether you're looking for a long-term investment or something that will just get you from A to B. If you plan on keeping your car for a decade or more, buying a new one may be the better option since used cars depreciate more quickly. However, if you're not looking to keep the car for very long, you may be able to get a great deal on an ex-demo with only a few thousand miles on the clock or a second-hand car that's only a few years old.
Electric cars are becoming more and more popular, with many people predicting that they will eventually replace petrol cars altogether. However, there are still a lot of advantages to buying a new petrol car now. 041b061a72