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Written by 9rules Blog on March 12, 2016
People love their cars. Some people love their cars so much, they buy a new one every few years. A car can often be a symbol of status. The nicer your car, the more money you make, and the cooler you come off to other people. Luxury is an absolute necessity, and all of the new gadgets and features have to be included.
This is all fine as long as you realize that cars depreciate in value the moment they’re driven off of the lot. This infographic shows the reality of this matter. An almost $30,000 car, true market valued at 100% is driven off of the lot. One minute later, the value of the car goes down to 91% at just over $27,000.
Just one year down the road, your car, though maybe in near perfect condition, is now only worth 81% of its true market value. You’ve lost almost 6 grand on your car in one year. Fast forward 5 years. Your $30,000 car is now worth less than half of it’s value at just over $12,000. Have you ever thought to yourself, “Is there a smarter way to do this?” There is.
Only Buy New If You Can Afford It
Some people really like new. That’s okay, but you should really think about the facts. If your car loses half of it’s value in 5 years, was that 5 years worth fifteen thousand dollars? Why spend the money when there is an inventory of other options that are just as nice-if slightly used, that will cost you a third of the amount of money.
If you’re concerned that your used car is going to have issues, that’s why you buy from a trusted source. Which brings us to the next option:
Kelley Blue Book It
No matter the circumstances surrounding the purchase of your new vehicle, you should always look up the car you’re interested in on Kelley Blue Book. It’s the best resource you’ll have in regards to purchasing wisely.
People who know more about cars than you might not be honest people…they may try to charge you more than you should be paying for a vehicle. The Blue Book allows you to easily check how much a vehicle is worth. It also lets you read reviews on its performance and any problems it might have as a model.
Know the Facts
As cars are depreciating assets, you know that you’re going to end up pouring money into them that you’ll never get back. That’s the nature of the game. Before you purchase a vehicle, you’ll want to know the facts about the particular car you’re looking at. Is it American made or is it foreign? Does this individual car have a salvaged title? When did this car last have an oil change or have a timing belt installed?
These details are things you need to know before purchase. The last thing you want to do is buy a car and then immediately have to put thousands of dollars into it for maintenance that should have been done before the car was sold. You’re saving yourself by checking the facts in this regard.
As long as you consider all of these options before buying a car, you’ll be able to be confident that you purchased a car the right way. No throwing money down the drain, no overpaying for vehicles that aren’t worth their rubber, and no regrets. Buy the car you love in the end, but don’t let your love lead you astray. Buy on facts and know what you’re literally getting into.