Buying a new car is one of the most exciting times in your life, especially if it's your first time buying a car. A lot of recent college graduates with their first real jobs will go off and buy a brand new car as their first "real world", grown-up purchase. But do they always make the right decision about what they buy? Buying a brand new car hot off the assembly line may sound great and yes you'll get that new car smell and the car that no one else has ever driven; but at what cost? Buying a brand new car versus a used car can end up costing a lot more money then you expect. And that new car smell may not be worth it.
In the first three months of a new car's life it will lose 30% of its value. After five years it will have lost almost 70% of its value and that new car smell will be gone. Most car purchases are made with a cash down payment and a substantial loan. If the loan for the new car is set to be repaid in more than five years, after the first five years the owner will be "upside down" on their loan. This means that the car will actually be worth less than the amount owed on the loan. In case of an accident where the car has to be totaled the insurance company will only pay what the car is worth; not the amount still owed on the loan. This could lead to some serious cash problems with repaying back that loan and trying to buy another car.
When you are on the lookout to buy used cars, make sure to always test drive the car. Don't ever buy a used car without taking it for a spin first. Keep in mind to be legally equipped for the drive. Make sure to have your drivers license with you and also have a look at the insurance papers of the car. If the insurance papers aren't in order, this may spell big trouble for you in case of any accident. The problems with this car would start even before you are the owner!
Buying Used Cars - What To Keep In Mind
When starting the car, take a good listen to the engine. Purists would say that the car needs to start in one go. However, many older cars take a second to start, but once the engine jumps on... it roars like a tiger. The sound the motor makes when it's running is the most important here. Listen to it. If it sounds healthy, then it probably is. Next to the engine, pay attention to the gearbox, the pedals and the steering wheel. Do they feel rusty? Do they feel flexible? The easier these things are to operate, the better the shape the car is in. If an old car has been well maintained throughout its life, it can still be a well oiled machine even at a ripe age.
If anything at all about the car feels as if it might need repairs in the future, be sure to bargain for a lower price. After all, you're about to pay good money for this car. You certainly don't want to pay too much! Also pay attention to the acceleration of the car. A well maintained, old car should still have enough juice left to accelerate fairly quickly. If it feels like the car is dragging itself up to speed, then that would be an indication of plenty of wear and tear on the engine.
Posted by 3:07 AM, Published at