6 Top Ways You Lose Money When Buying a Car
A lot of people consider a car purchase to be a bad investment. However, they also understand that this is a necessity for many people. Most people wonder how to avoid losing money when a new car leaves a dealer and already loses twenty percent of its value.
There is no exact formula for saving money when buying a vehicle as it highly depends on your personal situation.
It might be the case that buying a car from a private party is the best option for you, while the dealership might be the solution for other people.
Some common factors to consider when buying a new vehicle are never acting on impulse, being aware of all possible options and assessing them well.
This is a very serious decision due to the fact that it involves a significant amount of money and you do not want to make the wrong financial decision.
Therefore, we have prepared a list of things that will prevent you from losing money when purchasing a new car.
1. Try To Minimize The Net Price
When purchasing cars for cash you need to take the future into consideration. Only a limited number of people do this, but in reality, it can save you a lot of money in the long-run.
You should always try to evaluate the cars’ future value. The net price of the vehicle will be minimized if you will be able to sell this car for the same amount or close amount in the future.
There are actually cars that can be sold for almost the same price as they were bought. It sounds impossible to make such evaluation but there are services such as online sales calculators, which will assist you in getting an understanding of how much you should expect to sell your car for in the future.
Obviously, it is almost impossible to estimate the period of time that you will own a car or how much millage it will have when the time to sell comes, but these services will give you a general estimation by conducting simple research.
2. Go In Favor Of Cars That Are In High Demand
It is important to look at cars that are in high demand and the ones that are selling really well. Check the sales of the vehicles that you like.
In most f cases, vehicles that are always popular are more likely to be in high demand in the future when you will be selling your car for cash as a private party.
3. Make An Economic Decision Rather Than Impulse One
Miles per gallon and the car’s reputation are factors that you need to take into consideration if you want to make a financial decision.
There are certain types of cars that you should avoid if you are looking to save money. These types include luxury vehicles and sports cars with low mpg.
Without any doubt, these cars are appealing but they don’t add value for people looking to satisfy the basic need for transportation.
4. Do Not Seek To Buy A New Car If You Are Looking To Save Money
As mentioned above, as soon as a new vehicle leaves the dealership it already loses 20% of its value.
A huge amount of money can be saved if you simply avoiding the temptation to look at a clear odometer, experience the smell of a brand new car, and the status symbol that comes with driving a new vehicle.
These cost savings are not just because of the fact that used cars are less expensive, but rather because they depreciate less.
It should also be mentioned that after 75,000 miles the car’s depreciation starts decreasing significantly.
Therefore, if you buy a car for cash, which has already reached 75,000 miles you are running out of the red depreciation zone.
5. Look At Cars That Have Clean Titles
You should not even look at cars that have the title “salvage” or “rebuilt”. These vehicles might be running well as if they are new and might possibly pass the inspection; however, it is important to keep in mind that most likely you will be having problems with them in the future.
6. Mileage Overage
The majority of people think that the older the car is the worse it is. This is partly true. Although, you have to assess the car by considering two factors, its age and also mileage.
If you find a car that is 3-5 years old but has low mileage, do not wait any longer and contact the seller for more information.
They are normally sold by private parties who sell cars for cash and the owners of these vehicles are older people who have not driven long distances. By making use of this advice you will be able to get the benefits of a car with less wear and tear.