New Or Used? What To Know When Shopping For Your Next Car

Many states now have a lemon law in effect, which means that you have a certain amount of time after buying a used car before you can return it. The law ensures that you don’t find yourself stuck with some old beater or junker because an unscrupulous seller wanted to take advantage of you. While the lemon law might protect you when it comes to buying a used car, you can save yourself some time and money when you know what to look for when buying a new or used car.

Resale Value

Did you know that a car depreciates with each mile placed on the engine? This means even though you just dropped $25,000 on a new car, the car is no longer worth $25,000. The resale value refers to how much you can sell that car for after you buy it. When looking at a new car, you want to consider how much it depreciates in the first few years of ownership, and with a used car, you need to look at the fair market value of the vehicle and decide if the selling price is a good one.

Cost of Ownership

The money that you spend upfront is only a drop in the bucket compared to the total amount that you’ll spend on that car. Most experts refer to the cost of ownership as the total amount you payout in the first five years after you bring home that car. This includes maintenance, gas, repairs and insurance. The cost of ownership can reach more than $30,000. Before you take your dream car off the lot, consider whether or not you can afford to pay an extra $5,000 to $6,000 or more every year.

Sticker Price is for Suckers

The only people who pay sticker price for a car are the ones who think the dealer is their best friend. A car dealer only makes money when people buy cars, and the more you pay, the more the dealer earns. You can’t even rely on the "invoice price" on the car either. Some dealers will tell you that this figure refers to how much the dealer pays for that car, but it’s usually just another markup. Let the dealer or seller know exactly how much you can afford, and if the seller balks, walk away. No matter how much you love one specific car, you won’t love it if you pay too much.

Tricia is a mom and a blogger from Beverly Hills. She recommends Diamond Honda of Puente Hills for your used or new car needs.

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