I want to encourage you to buy only used cars from now on. Never new!
I know, I know, you don’t want to buy somebody else’s problem. But cars these days are built to last a long time and I’m not suggesting you buy a car from the 80’s1 Instead, I’m gonna show you how to buy a used car at the exact moment that it’s lost the most value but is still a great vehicle.
I”m sure You know that cars go down in value, but did you know that a car’s steepest depreciation occurs between ages zero and three –an average of 45%? That means buying used is not a bummer. It’s a benefit. It opens up a whole new range of vehicles to you.
For instance, which would you rather drive, a Lexus or a Taurus? Gosh, I’m going to go out on a limb and guess that the vast majority of you said a Lexus. A brand new Lexus ES3350 costs about $47-thousand dollars. Ouch.
But guess what? You can drive a Lexus for the same price as a Taurus. (It’s just that it will be slightly used.) I did a price comparison between a new Taurus and a used Lexus:
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2017 Ford Taurus SEL sedan brand new: |
$23,500 |
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or |
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2014 Lexus ES350 sedan with 38,046 miles: |
$23,500 |
Amazing. You can get a three year old Lexus with low mileage —37-thousand miles— for the same price as a brand new Taurus. That’s the story of vehicle depreciation. Dramatic, isn’t it? The key is to get a used car that’s 2-4 years old. That’s the sweet spot for scoring a deal based on the biggest period of depreciation. Of course, if you REALLY want to save money, you’ll buy a used Taurus! SO let’s do that math real quick.
Once again, I based this on a low mileage, 3-year old vehicle. And 9-thousand in savings? Fantastic! My work here is done.
