Pre-Loved Car vs. New Car

While there's nothing like being the first to sit in a new car's leather seats and inhale that fresh-from-the-assembly-line perfume, it's an expensive romance.
If the idea of saving thousands of dollars is more thrilling to you than that new-car smell, you'll find your heart's desire in the used car market.
And there's no beating the price. "People don't think of depreciation as an out-of-pocket cost, but it is," says Philip Reed, senior consumer advice editor at Edmunds.com. "There's a steep drop off in [value] in the first year, and 30 percent depreciation by the end of the third year."

For example, Edmunds looked at the Lexus GS 430 and GS 450. "The first-year depreciation on the new car is $14,000; if you bought a two-year-old model, the depreciation is $3,000 in the first year of ownership," says Reed.To offset the first year depreciation on a luxury car, your monthly payment needs to pay down at least $1,167.00 worth of principal each month for the first year. If not, you will be officially upside down in your car loan. To pay down that much in principal, your monthly payment total principal plus intrest would have to be $1,483. Thats $17,803 in payments for the year at 6% intrest. WOW, thats alot of money.Flip that kind of budgetting around in a car that has already taken that first year hit, and you can be several thousands of dollars to the good.