There’s nothing like getting a brand new car. Everything is perfect. There is no wear, the body is perfect with no scratches or dings, and it even has that incomparable new car smell. But those things don’t last very long, as we all know, and you still have to make the new car payments.
Amazingly (at least to me) you can get a low mileage late model car for a a much lower price. Car dealerships have parking lots full of cars from last year or the year before. It baffles me where these nearly new cars come from. I recently saw a 2008 Infiniti G35 with 17,000 miles for sale at a used car dealer Houston. There’s a 2008 Hyundai Santa Fe available for ,000 at a Kern County Hyundai dealership. And a 2008 Nissan Sentra for ,000 at a Southern California 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 weren’t able to make their car payments.Perhaps their company buys them a new car every year? Who knows?The important point that you can own it for a lot less than they paid – and it’s still pretty new!
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 turns out to be a substantial percentage of the price. If you had bought that same car last year, you would still be happy with your purchase, even if the manufacturer has released a new model with the latest features. You would probably still owe more on it than it’s worth on the open market. Still, most people want the latest available model when they buy a car. Inside of a year, they’ll own a used car.
Why not benefit from this bias which inexplicably decreases the market price of used cars, trucks and SUVs? Identify a car you like, then find one that’s only a year or two old. Most car dealers will certify vehicles that are in good condition and have a limited number of miles. You’ll still be able to finance a used car, just like you could if it was new. Many of these cars are still under warranty by the factory, plus you can buy an extended warranty from the dealer.
More Information is Available Now
Often when a new model is released, there are unknown defects. Auto reviewers test the new car models and publish their reviews. But the testing on these cars can only be conducted for a relatively short period of time. Some information, like reliability just isn’t available until thousands of them are on the road over an extended period of time. Used car buyer often have some of this information before they decide which car to buy. Besides, even the best-built new cars have recalls over the first few years. When you buy a used car, many of these issues have already been handled.
So if you’re watching your budget, like so many of us are, consider buying a late model used car. The ideal place to get a good used car is the dealership that sells those same cars new. 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.