Logic tells us that a used car is not as expensive as a new one. Then again, logic was a better guide when times were a bit more predictable.
That was then. This is now. And the future is anything but predictable. So a used car may not be such a good deal after all. Here’s how it works, according to a piece on the Forbes Web site.
The economy is in such bad shape that dealers are cutting new car prices to the bone. It means that some new cars are priced so low they sell for close to the price of a one-year-old used version of the same model.
The key to taking advantage of this lies in the financing — interest rates are usually less expensive for new cars than for used ones. You can get a new car loan for, say, a 5.9 percent rate, but a used car loan may cost you more than 10 percent, the forbes.com piece says. Using an analysis by the respected buying and research site, edmunds.com, Forbes did the math on a BMW 650i and found that “buyers can save $6,175 if they buy a new (one) instead of its one-year-old version.”
All well and good, but my feeling about all this is this: Save your money and get a car that’s about three or four years old. If you buy from a reputable new car dealer’s used car lot, your purchase may be a lease return, with service records, and, if it is extra clean, it will be in the so-called “certified pre-owned” (a fancy phrase for “used”) category, with a warranty.
If you buy something that has a reputation for reliability (Toyota, Honda, Buick, etc.), you could be getting a pretty good car for less than half of what it cost new. These days, some cars are made to go 200,000 miles if they’ve been serviced properly. If you get one with, say, 50,000 or 60,000 miles, it will still have a lot of life left.