I use to love that new carpet, those firm seats and beautiful paint job without a single scratch. After I paid off both my cars, I’ve come to the conclusion that I really hated car payments. No. I despised those payments every month.
I recently found a great used car for my sixteen-year-old daughter. It did have some mileage on it and needed a few repairs, but so what?
I’ve come to the conclusion that I don’t need all the latest new “stuff” on a car. Maybe its maturity or frugality. I much prefer the freedom of not owing money on a car. But that’s just one reason.
Here are the reasons I’m not buying a new car anytime soon:
1. Lower car insurance. It’s no secret that car insurance is expensive for new cars today. An average repair can be hundreds or even thousands of dollars. I recently read that the average new car price for 2013 is $32,000! Wow. That’s more than some of my retirement clients paid for their first home.
I don’t skimp on the limits and liability levels on my car insurance. When I bought my daughter’s car, the insurance it was only about $27 per month more. It pays to buy a “mature” car. With some much older cars, it may not be cost-effective to have full coverage. In this case, I only purchased liability. That kept my bill to a minimum.
2. Lower property taxes. Another great reason to buy a not so new auto is a lower tax bill. When I went to the title transfer office, this little mechanical gem only put me out $75 for property taxes. When I bought new cars in the past, this bill was always four to five times that sum. Remember this bill is annual.
3. No car payments. Oh what a beautiful feeling! I’ve had a car payment a good portion of my young adult life. A few years ago I bought a pre-owned vehicle and paid it off quickly. As much as I like the new car thing, I enjoyed the freedom without car payments much more.
4. No depreciation. Depreciation is the amount your car drops from the moment you drive it off the lot after purchase. New cars usually have depreciation of some amount. The beauty of buying a used car is that someone else took all that depreciation. When I buy a used car, I find out the Kelly Blue Book value and try to pay as close, or better than that price.
5. Lack of paranoia. I’ may be stretching it here a bit. When I had a new car, I’d always park it 50 miles away. I was always fearful of that first scratch or dent. With a previously owned car, it already has these marks of character. So I’m not so worried when another blemish shows up.
It would be nice to buy a new car again someday. I’ve changed my feelings about a car. It’s about reliable transportation, not the status symbol. And yes, I’ve probably missed out on 0% interest offers too. To be honest, I’d rather have the extra money for my retirement or a nice vacation every year. If you’d like to get my articles delivered to you automatically, subscribe here for free