| Financial matters have never been more important in a | | | | maintenance. How much maintenance will $300 a |
| tough economy. Spending our dollars wisely is the best | | | | month pay for? All of the routine work that a car |
| protection any family has against recessions and a | | | | requires is much less than that; four oil changes, two |
| bad economy. When it comes to buying either a new | | | | tire rotations, and a few replaced filters, fluids, and |
| or used car, there are a lot of cost issues at play. | | | | accessories might be $300 for an entire year. With the |
| Obviously, a used vehicle has a lower purchase price | | | | other 11 months of finance payments, a used car could |
| than a new car, but is it worth it to own a vehicle with | | | | have a total engine tune up, buy a new set of tires, |
| miles already on it? Where is the money better spent | | | | flush the transmission system, redo the front and rear |
| during car sales? | | | | brakes, and then throw in an alignment and a new fuel |
| Let's run some of the numbers: New Car Sales | | | | filter. |
| As an example, take a new car sold at $20 thousand | | | | As you can see, the cost of ownership for a used |
| with $2000 down and the remainder financed for 6 | | | | vehicle is much less than a string of monthly payments |
| years at 6%. What is the total cost of this vehicle over | | | | over the life of a car loan. When you add up all the |
| the life of the loan? With interest and finance charges, | | | | number, used cars are really the most economical |
| that $18 thousand remaining principle becomes nearly | | | | choice. |
| $26 thousand after six years. So that new car ended | | | | Another Used Car Perk |
| up costing a total of $28 thousand when the sticker | | | | Some people are skeptical of used car sales for a |
| price said only $20 thousand. | | | | number of reasons, but they are not always true. For |
| That is the power of compound interest. While interest | | | | example, there is a myth that older cars get poor gas |
| can make your 401k and savings grow, it will also | | | | mileage. In reality, new fuel mileage standards have |
| generate debt on the other hand. | | | | been in place for so long now, that used cars are not |
| Monthly Payments And Maintenance | | | | technologically behind their new counterparts. A well |
| One of the benefits of a new car is that the entire | | | | maintained vehicle, used or new, will have great gas |
| purchase price is spaced out over many months, | | | | mileage. The same can be said for many amenities |
| making it affordable to own. New car sales typically | | | | and features; they have been coming standard on |
| require less maintenance costs in the first few years | | | | even base models for years and are showing up in |
| of ownership and are covered under warranty if | | | | most pre-owned vehicles. |
| anything does happen. But what price do we end up | | | | Some people have to have the latest model, but for |
| paying for those benefits? | | | | those watching their budget, used car sales are the |
| Take a typical monthly car payment of $300. A used | | | | economical choice. |
| car has no monthly payment, but may require more | | | | |