1. Used Cars: Lower Price Tag, Less Depreciation
Remember
the old adage that a new car loses thousands of dollars in value the moment you
drive it off the lot? It’s still true, and it’s why used cars are better
bargains. It’s also why you can buy a 2007 Porsche for the price of a 2011
Honda. Someone bought the Porsche for $50,000 and now it can be yours for
$25,000.
Think about the average price of buying new. Figures from CNW Marketing
Research show that the average price of a new car in 2008 was $25,536 before
taxes and fees. That car could now be worth around $13,000. Would you rather
be the original buyer, who lost $12,000 or $13,000, or the second buyer
who saves that much?
If you buy a car that’s one or two years old, it’ll still depreciate,
but you’ll lose less money less quickly. And you’ll avoid that big initial hit
that the previous owner took.
2. Sales Tax on New Cars
Every ad for a new car glosses over the tax issue. Many state laws subject
new cars to state sales tax, but not used cars. In Georgia, for example, if you
buy a used car from a private seller, you won’t owe any sales tax at all.
Comparatively, the sales tax that dealers have to add to the price of a new car
can be thousands of dollars. Don’t underestimate the savings, and research your
state’s laws on the subject before you make a decision.
3. Falling Registration Fees
In most
states, the rate of your annual registration fee is based on your car’s value
and its model year. In Colorado, for example, registration fees fall
dramatically during the first few years after a car is manufactured. The rate
is highest in the first three years, and then levels off after five years. If
your state has similar rules, you can save about a thousand dollars by avoiding
the new car registration fees and buying a car that’s at least three, or better
yet five, years old.
4. Useless Extras on New Cars, Cheaper Features on
Used Cars
The
oldest trick in the dealer’s book is to install additional dealer options.
They’ll add a pinstripe, a protective film, or the immortal “anti-rust
coating,” but new car buyers who want these add-ons can easily get them for a
much lower cost from an after-market installer. Regardless, these changes don’t
add a dime to the car’s resale value anyway. When you buy used, you may not get
every feature you want, but you certainly won’t end up paying extra
for things you didn’t ask for.
On the
other hand, when you search for specific features that you do want in a
used car, like a sunroof or navigation system, you’ll pay far less than the
original owner did. Instead of needing to decline a dealer’s expensive
navigation package with fees and surcharges, you’ll be able to afford the
built-in features.
5. Dealers and Their Crazy Fees
As if
paying $500 for rust-proofing isn’t bad enough, dealers hit new car buyers with
shipping charges, destination fees, and “dealer preparation.” These fees feel
even worse because unlike the unnecessary, unwanted pinstripe, owners have absolutely
nothing to show for these charges except a lower bank account. When you buy
a used car, you’ll have to visit the DMV to pay tag, title, and registration
fees, but you won’t deal with any of the nonsense that dealers add. Used car
for sale at any location we will help
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