Car Buying Tips - Don’t Invest

Car Buying Tips

It drives me crazy when people use car buying and investing in the same sentence.

O.K… excluding antique and classic cars, I’m talking about basic everyday car buying. So, here’s the number one tip… cars are not investments… in fact they are quite the opposite.

Your car begins to depreciate the before the ink is even dry on all those papers you just signed.

How much you ask?

On average both cars and trucks will lose more than 20% of their initial value in their very first year!

Ouch!!!

If no other reason you should now be convinced it is in your very best interest to get the best possible car deal you can when you buy your car… with that kind of depreciation hit, you sure don’t want to overpay for your car right out of the gate.

Using nice, round numbers to illustrate this hit you’re taking… if you paid $20,000 for your car; after but two years of driving your $20,000 car might now be worth about $13,000! In case you are wondering that works out to about $300.00 per month to the negative… nice investment eh?

If your house or your retirement account offered up to you those types of ‘investment’ numbers, you’d probably feel like jumping off a cliff… So, again… car buying tip number one… all together now… a car is not an investment…. it’s a major expense in your life.

Keep this at the forefront of your mind the next time you feel that itch to buy a car feeling… if you do, this type of reality will be the the cold bucket of water for you.

If you’re driving a car that is getting you around and is paid off, chances are it’s older and as such you’ve already paid for the depreciation, so get some good use out of your money and keep driving your car for as long as it will stay reliable and get you to your job and back.

If, however, you just can’t stand the thought of driving your current car and your going to scratch the proverbial car buying itch, at least get the best deal you can… so that’s where we’ll start our next set of car buying tips.