Choosing to buy a new or used car ultimately depends on
balancing your lifestyle with your transportation needs. But if you’re looking
strictly at the money angle, here’s my take on it.
Buying Used Makes Cents
Let’s look at a real-world example, with a Ford F150.
New 2015 F-150 XLT Super Crew Short Bed price: $37,500
State sales tax (national average of 6%): $2250
Total: 39750
48 month loan at 2.5% interest: total $41814
Full coverage insurance to cover the lender: $1400 per year
Driving 12,000 miles at 20 mpg (V6 ecoBoost), $2.75 gas
price: $1650 per year
Cost to own the truck for 48 months: $54014
Used 2013 F-150 XLT Crew Short Bed, 32,696 miles: $28,500
Sales tax (6%): $1710
Total: 30210
48 month loan at 2.5% interest: total $31778
Full coverage insurance: $1400 per year
Driving same amount of miles as above, except V8 only gets
16 mpg: $2062 per year
Cost to own the truck for 48 months: $35240
We have not considered maintenance costs, it’s possible the
used truck will require more repairs and scheduled maintenance than the new
one. Still, there is nearly $19,000 difference between buying the new truck and
the used truck. That can buy a lot of mechanic time, tires, etc.
You do also miss out on the latest electronics and safety
features. But since when is an aluminum body and more buttons on the steering
wheel worth $19k? Better still, you can choose an even older truck and increase
your long term savings...
Buying a used car doesn't have to be risky. If you know what you want then it becomes a lot easier.
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There are tough decisions that need to be made every day. Some of them require intensive investigation and research while others come more by "luck." The discussion here is whether a new or used vehicle is the best deal in the long run. In this study, the final determination came to whether a few extra buttons on the steering wheel were worth $19,000. The decision is up to you.
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