The American dream is a house with a white picket fence as well as two cars in the driveway. In the American culture, two cars are often necessary because of the distance between your home and work or other events. If you have children, you certainly need a car to take kids to school, drop them off and pick them up from extracurricular activities, and for the many errands that you must run.
But is a new car always necessary?
If you’re on a tight budget, and most families are, especially when one parent stays home, you might want to consider the thriftier alternative–buying a used vehicle.
I love to read Infographics, and I was surprised to read how much the true cost of owning a car can be. Did you know that one hour after driving your new car off the lot, it loses 10% of its market value. Ouch! On a $25,000 car, that’s $2,500 for one hour! Within a year, it loses 28% of its market value.
If you instead buy used, not only do you pay less out of pocket, but you let the first owner take the hit to the market value rate. Why should you be the one to take out a large loan, pay interest, and be tethered to the payment for 5 years? Why not buy a car a couple of years old, and get a much more modest loan from a company and only pay for 3 years?
There are other advantages to buying used, too. Likely, your insurance rate will be cheaper because the car isn’t brand new. This is especially important if you have younger drivers in the household.
If you worry that you’ll face many repairs if you buy a used car, rest assured that you can now buy certified pre-owned vehicles. For the vehicle to receive this distinction, the first owner must keep detailed records and follow a strict schedule of maintenance. You’ll likely face no more repairs than you would had you bought the vehicle new.
In an ideal world, we’d be able to get by with only one car per family. However, in the United States, two vehicles are often a necessity. There are steps you can take, though, such as buying a vehicle used, that will save you thousands of dollars on the cost of vehicle ownership.
Do you buy used vehicles or only new ones?