How I Will Be Rich

This past year, and ever since those gas prices began to rise to ungodly heights, I have been debating on purchasing a car. Right now my current vehicle is a 2000 Ford Ranger and gets roughly 17 MPG. As of late, I have been paying much closer attention to how many miles I am getting per tank and comparing that with the possibility of what I could get with a much more gas efficient car. Prior to this, I would find myself filling up once a week at about $50 a pop. Sure, I would gripe over the cost while watching the dollar signs trickle higher and higher, but once I drove away, that thought would quickly drift from my mind. After years and years of this process, I am finally coming to grips with all of the cash that I have been burning and want to do something about it. I would say the largest motivation for me to make this move is realizing how much driving I’ll soon be doing. Beginning next week, I’ll find myself trekking over nearly 100 a day to attend school. Time to make a change…

Knowing where to begin looking for the “right” vehicle is definitely the most difficult step. While discussing my situation with a group of friends, I realized how many options immediately opened up in front of me. After this conversation, I learned that one friends’ parents owns a dealership, and two have close friends that purchase used cars for smaller shops. Getting these connections is always number one, but they could also bring many new options into your mind.

There are many advantages to owning a new car. Sometimes people just love the feeling of driving a fresh car off the lot. Maybe it’s a peace of mind knowing that you’ll be the first one to break it in and seeing what it’s all made of. Some other advantages, and disadvantages include:

• Warranty coverage: Many manufactures will cover your car for three years or longer for any defects. Upgrading what the warranty covers is always another option. The bottom line here is that you know you’re nice and covered if that new car turns out to be a “lemon”.
• Low maintenance: When driving off that lot, you’ll know that the car will not need a tune up or any other mechanic work for quite some time. For a several thousand miles, oil changes will probably be your biggest worry, and even those are sometimes covered from the dealership.
• Financing: Normally dealers will sucker you in to buying a new car with nice financing rates. I’ve heard numbers around 4-5% APR for the term to pay the car off, but beware, not everyone qualifies. In fact, only about 7% of people purchasing a new vehicle qualify for those advertised deals. Choose wisely.
• Depreciation: This is definitely a disadvantage. Once you drive off the lot, your car just lost a couple thousand dollars off the sticker price. You’ll see roughly 15% of those dollars you purchased your car with fly out the window.

Going with the Used Car

Driving away with the brand spankin’ new car doesn’t have to be the best feeling in the world, knowing that you got a great deal does! That’s what people are looking at when searching for used cars, and lucky you, there are millions of choices out there. The only limit on what kind of car you want is how much research and time you want to put into it. That is advantage number one, here are more:

• The used, new car: Many dealerships now offer pre-owned certified cars. Usually there is a slightly steeper price tag on these cars compared to those you’ll find on AutoTrader. With this deal, you’ll be able to walk away with the similar piece of mind as purchasing a new year, you’ll be covered if something goes wrong in the near future.
• Depreciation: Contrary to new cars, depreciation really isn’t much of a problem with used vehicles. If purchasing a vehicle that is a few years old, you have the sense of mind you didn’t lose thousands of dollars by driving it new off the lot. From that point on, miles and condition are what matter most. Keep that average of 15,000 miles added per year with all the routine maintenance and your car shouldn’t have a spike in depreciation.
• Passed down warranties: If you purchase a car that is still covered under the original factory warranty, then lucky you! Wherever you end up purchasing a used car, there is always the possibility of being able mooch the advantage of a pre-bought warranty. Add that into your purchasing research; it’s a huge perk!
• Look in the past: Checking out the previous life of your future purchase is key. Look into all of the history reports that are available online and see if the vehicle has been in an accident or if there are any other important factors to know before dishing out thousands of dollars. Check out a few of these sites to get started: DMV.org, CARFAX, Is It A Lemon.

Hopefully these perks and disadvantages have helped you understand the comparisons of new and used cars. Even if you’re not in the market to buy now, it’s always great to do research and get ahead before you’re in a position of scrambling to buy a new car. By writing this post, I have learned a lot with the research I’ve done. So, go and check out what’s around online and at the local dealerships, just do enough research before making that large purchase.

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