If you're in the market to buy a car, the first question you might be asking yourself is whether you want to buy new or used. There are many factors to consider, including that great new car smell that you won't get in a used car.
I think for most of us, it really comes down to price. When buying, it's helpful to know that
- New cars depreciate approximately 25% when driven off the lot, and
- New cars lose approximately 70% of their value in the first four years.
When you buy used, the previous owner has already eaten that depreciation cost and you can get a car for a great price. The trade-offs of course are that you may have more maintenance costs, you are not the first owner and may not know the entire owner and accident history, you may not have the same warranties you would have with a new car, and you won't get that great new car smell.
Whether you're interested in buying a car or not, you may find this
Dave Ramsey video on how we could all be driving free cars interesting.
