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.

Do Miles Matter ?

Good question....but it shouldn't be the first question necessarily.Condition should always be more important than miles.Miles are the basis as to what the value of a car is, but they are not the basis of it's worth.

For example, 2 cars....1 with 125k on the miles that has been well taken care of, serviced, oil changed regularly, and all around RESPECTED. The other with 43k on the miles that was abused, oil changes ignored, maybe raced, and all around treated very poorly. The banks, finance companies, Kelly Blue Book, and NADA will say that the one with 43k has a higher "book" value than the one with 125k. The one with 125k though is the one that is the better buy. It has the the better chance of offering many more years of service and use than the one that has been abused.

That said, the question arises..."How can you spot the ones that have been abused, and the ones that have been cared for and respected?" Test drive, test drive, test drive. With the media talking these days so much about identity theft, it is rare that a car is traded in these days with very many, if any, service records and receipts. Most folks nowadays take all that out of their car before they trade it in. Again, the best way to evaluate a cars condition is to DRIVE IT.

Still not comfortable with your own thoughts and feelings about the condition of a car? Then make an appointment with a mechanic that you trust to check out the car before you buy it.

Still want more peace of mind? Invest in a warranty that provides coverage in the event of a breakdown.

So, do MILES matter? Yes and no. Yes to determine the "Book Value" of the car, but no in determining the condition of the car.

Car 1 with 43k has a book value of $8,995.
Car 2 with 125k has a book value of $5,745.

A warranty on car 2 for 2 years/36k miles costs $690.

Sometimes even is car 1 has been taken care of, car 2 would still be a better deal....especially if the dealer you are buying car 2 from offers warranty coverage, but the dealer that has car 1 doesn't have warranty coverage available.What about really high miles? Cars over 175k on the miles can't get warranty coverage.

Three things to look for on really high mileage cars.
1. Condition...DRIVE it.
2. A Toyota badge on the back, or
3. A Honda badge on the back.

Avoid ALL domestics over 175k except diesels.RELAX....The Brothers Abide.The car buying experience doesn't have to be stressful.

For more car buying information visit www.leonardmotors.com