The last two vehicles I've owned (which includes my current vehicle) have provided excellent service. I did not buy them new; I bought my current car with 32,000 miles on it and it now has almost 105,000 miles.
Both of these vehicles have been premium cars, and at the time I bought each of them I paid half, yes I said half, of their new value. I maintained them well and they had and have proven to be great purchases. Yes, there have been repairs from time to time, but that's expected for something that gets used everyday.
The Factors Regarding The Selection Of A Car
- Maintenance: how much is this going to cost you in repairs and day-to-day running of the vehicle, including gas and tires?
- Insurance: how much will you get slammed when it comes to insurance premiums compared to the car you're trading in?
- Lifestyle: how much do you drive in a day? If you drive a lot, make sure the car is comfortable and "fits" you. Do you like to have new cars every two or three years, or do you keep my cars a long time? If you like new cars, then perhaps a lease instaed of a purchase would be ideal for you. If you keep them a long time, make sure you really like the color; choose a color that is neutral. Trendy colors, well, they're just trendy and go out of style after a few years, at most.
The Hidden Costs of Owning a Car
- Depreciation: this can be excessive, especially when buying new. You drive it off the lot, and suddenly it's worth a stunning 85% of the purchase price. You're now upside down if you've financed more than 95% of the purchase price.
- Interest: if you bought the car and you financed it, think about how much interest you're paying on the loan. How much more are you actually paying for the car? This could add thousands to that price you just negotiated. Great deal, huh?
The Common Mistakes People Make When Buying a Car
- Maintenance: not maintaining the car properly. I know this is excessive, but I change the oil every 2,500 miles and rotate the tires every 5,000 miles. When the oil is changed that often, the serviceman can catch problems before they explode into something costly. By rotating the tires that often, you can adjust the alignment at the same time. Cars now get out of alignment more often due to our roads that are in bad need of repair. We have a lack of tax dollars to thank for that. See "Factors" above.
- Negotiation: walk away from the first meeting with a salesperson. Give yourself time to relax and think about the deal. Don't be too quick. Also make sure your credit is cleaned up so you can get the best possible interest rate and save money over the life of the loan.
- Gas costs: people get so emotional when buying a car they think, "I don't care that it only gets 12 miles to the gallon; this'll be so fun to drive, the cost of driving it will be the last thing on my mind." Think again when the novelty and newness of the car has worn off.
What are some of the most shattering mistakes you've made when looking back at the buying experience? Let me know in the comments below.