While the great feel and overall pleasure of driving a brand new car is
undeniable, it almost always makes more financial sense to buy a used
car, truck suv or van.
New cars lose about 40% of their value within 3 years, at which point the depreciation starts to slow down.
With used cars, the previous owner has absorbed the biggest or steepest portion of the depreciation cycle. You buy at the beginning of the low-cost part of the car ownership cycle, and almost all of the costs of owning and operating a car will be reduced. Some of the benefits of buying a used car include:
- Lower purchase price
- Lower depreciation
- Lower sales tax due to generally lower purchase price
- Lower financing costs (in the form of fees and interest paid)
- Lower insurance premiums
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