| Some very wealthy people have never bought a | | | | Loan Term |
| new car in their lives. With so many super-low | | | | While the rate is normally lower for new cars, the |
| mile used cars out there, what's the point of | | | | term is usually longer. A prudent buyer can get |
| paying thousands more for a few less miles? | | | | the same payments on a used car that they can |
| Then there are those who refuse to buy used, | | | | get on a new car, only for fewer payments. |
| regardless of their financial situation. They would | | | | There is also the option of extending the term on |
| rather buy a brand new beater than get into a | | | | a used car purchase to the length of a new car. |
| high quality vehicle that has had someone else | | | | Vehicles last longer. There are loan companies |
| behind the wheel. | | | | that will extend a note to 6 or more years on a 3 |
| After all is said and done, it really comes down to | | | | year old vehicle because they expect it to still be |
| personality and goals when deciding between new | | | | running after that amount of time. In those cases, |
| and used cars. The 20/20 rule applies - 20 | | | | the payments can be much cheaper than on a |
| percent of people will never buy new, while 20% | | | | new car. |
| of people will never buy used. For the other 60%, | | | | Peace of Mind |
| this article is for you. | | | | Going back to the new car smell, the new car |
| Selection | | | | knowledge is very appealing. A rough driver who |
| Between huge dealer inventories, the option of | | | | doesn't do car maintenance and likes to drive 90 |
| dealers trading and bringing in a vehicle from | | | | mph in their Kia Rio can really hurt a vehicle, even |
| another dealership, and custom ordering becoming | | | | with low miles. When you buy a used car, you |
| more popular, the selection factor goes hands | | | | take the risk of getting that car and not knowing |
| down to new cars. | | | | the bad things it went through for months until it |
| For popular vehicles, it is definitely possible to find | | | | starts having problems prematurely. |
| a used car. The internet makes it simple for | | | | Equity |
| someone to search around the corner or across | | | | Vehicles are not like homes. They depreciate, |
| the country for that perfect used car. Still, it's | | | | regardless of what happens to the market. Some |
| nothing compared the options available with new. | | | | depreciate less than others, but no matter what, |
| Price Matters | | | | every day makes it worth less than the day |
| Even in today's ultra-competitive new vehicle | | | | before. |
| market where MSRP has been replaced by | | | | Used cars have already absorbed the initial |
| Invoice as the starting mark for price | | | | depreciation and are closer to leveling out on the |
| negotiations, a car still loses 10%-20% or more of | | | | depreciation scale. The first 2-4 years of a |
| its value the moment it hits the street. | | | | vehicle's life result in a loss of up to 75% of its |
| Low mile used cars a year or two old can be | | | | original value. In the first couple of years of a |
| dramatically less expensive than its brand new | | | | standard 5 year note, it is nearly impossible to |
| counterpart. There are exceptions - Honda, for | | | | trade in a vehicle that was bought new with no |
| example, tends to lose less off the top because | | | | money down and not have negative equity. |
| they rarely have rebates and their reputation is | | | | With used cars, it is still difficult, but not nearly as |
| very strong. | | | | hard as it is with new cars. |
| Other than the few exceptions, a used car is | | | | Final Thoughts |
| normally dramatically cheaper than a new one. | | | | How often you trade, how well you negotiate, |
| Interest Rate | | | | and the make and model of the vehicle you buy |
| For the 95% of us who borrow money and | | | | will determine a lot regarding the pros and cons of |
| make car payments, interest rate becomes an | | | | a new or used vehicle. Prudent buyers will seek |
| issue. New cars are less of a risk for the lender, | | | | out dealerships such as Used Cars Oklahoma City |
| so their bank rates are lower than on a used car. | | | | to help determine which is best. |
| The manufacturer loan divisions make it even | | | | If there is no local dealership that is trustworthy |
| more appealing to buy new with 0% financing | | | | enough, do the research online. Check out Kelley |
| available on most vehicles at some point after | | | | Blue Book for new car values and |
| their release. | | | | San Diego Used Cars - San Francisco Used Cars |
| Two or three points against a $30,000 loan can | | | | to compare used car prices. |
| mean big money on a 4-6 year note. For shorter | | | | Information is the key to making a good decision, |
| loans, the rate is less important. | | | | whether you buy new cars or used cars. |