I have been playing around with the idea of buying a car for probably over a year and a half now. I still own my very 1st car – a 1998 Saturn SC2 with approx 105,000 miles on it. I just hit the glorious 100k mile mark a few months back. I took pictures and all! I purchased the car in 2003 and will have owned it for eight years come October. My delay in purchasing a car hasn’t been affordability, it’s that I can’t justify spending tens of thousands of dollars when I have a car that still runs. The name of my blog is 100% true; I really am bad at spending money.
However, over the past six months I have come to terms with the fact that I will eventually have to buy a car, as much as I don’t want to spend the money. I have also decided that it is better to be prepared and know what I want to buy and actually buy it before my current car dies. So, I have begun the long process of researching potential replacement cars, thus commencing the whole car buying process. In the midst of all of my research, I have come across many articles on new vs. used cars. The general consensus from a financial stand point is that a used car is always a better choice than a new car – this is something that I also agree with. Mainly because a new car, once driven off the lot, immediately begins losing value; where a used car already took that deprecation hit allowing you to buy it at a discount. Well, at least that used to be the general consensus. Over the past few weeks, I’ve seen a few articles from “financial pros” (looking at you Clark Howard) stating that now it is actually better to buy new. This doesn’t quite make sense to me, but the logic behind this idea states that due to the crappy economy, buying new is actually cheaper than buying used. They claim that the demand for used cars is at an all time high (because of low supply), thus driving up the prices.
I don’t buy it. So I decided I am going to do my own pricing research and post the results here. To keep myself accountable, I will be posting this before completing any price specific research so my opinion is loud and clear. I shall conduct my research over the next few weeks or so; then, I will either claim victory over the “pros” or walk home humbled.
So what do you think, will the finance pros be right, are new cars currently a better bargain than used?