Its A Brand New Car!

So much fuss is made over the new car models this time of year with all the auto shows going on. There's lights and models and all kinds of professional reviews on the new cars. Dealers will try to convince you that you need the most recent model because of the latest gizmos and technology. But is it worth buying a new car when new vehicles usually fall as much as 20 percent to 25 percent after they are sold, even if has all the latest and greatest gizmos inside?

With the exception of ancient hard to find collector cars, cars are depreciating assets. They lose value over time, and lose their greatest value as soon as they are driven off the lot, at about 20%. The second year isn't much better, as they lose 15% or so in value.

Buyers of new cars often have hefty payments even if their interest rates are a little lower. The banks will make a lot of money off of interest payments for 4 or 5 year loans. Some buyers might even find themselves owing more than the car is worth, making it difficult to sell if need be.

Banks especially like to lease out vehicles, because the borrower will make large monthly payments and then turn the car in after a set number of months, usually thirty-six. Then the lessee will have to either sign a new lease for another new car, or buy one. Many will choose a new lease as they like the idea of having another brand new car. This can keep customers making a car payment indefinitely, which the bank would love.

What proponents of new cars love the most isn't the fancy gizmos or the new car smell, but the fact that they can expect to get many years out of the car before it starts to have any problems. They argue that this reliability is worth the extra cost, because they know their car will work, and they won't have to spend any money on repairs.

Repairs can be an issue with used cars, but a car with low mileage that was maintained well can be a great bargain for a buyer. They generally will last a long time before they start to have problems. Vehicles with forty thousand miles and under make great used cars. And as newer cars are being built to last longer, cars with even higher mileage can be good deals so long as they were maintained well.

Unless a buyer is mechanically inclined, they should avoid buying 15 year old junkers that could break down at any second. These cars will end up costing a lot more in repairs then they are worth.

In the end, the regular maintenance of the vehicle is what makes all the difference. Even a brand new car that isn't maintained well will break down early. Regularly scheduled oil changes and other scheduled maintenance should always be performed, either by the owner or a trained professional.