Used Cars - All the Used Car Advice you Need
Guide4Home Used Cars
At the moment, new-car initiatives are very strong. You can get low-rate financing as well, so you might think its not the time to buy used cars. But remember that the minute your car leaves the car lot it loses about 20% of its value and becomes a used car. Used car prices are then differentiated by the speed of the depreciation of the different cars. If you are buying a used car then you may be more interested in buying a new car that loses a lot of its value over the first time period, so that the value it loses once bought isn't so quick. But if as a new car it doesn't lose a lot of value immediately it may be that you should wait before buying it as a used car.
There are some exceptions as to the reason some cars lose value rapidly its because they are known to be troublesome as they age. These are the used car models that you would want to avoid. Sometimes, rapid depreciation is based on changing tastes and the intangibles instead of the practical demerits, so these would probably be best buys on the used-car market. However, cars like the Toyotas and the Hondas, which depreciated slowly, could be excellent choices due to their long-term reliability and the amount of useful miles that remain. But they do cost a lot secondhand.
Prices have dropped on the whole, and the used-car prices haven't really followed industry rules. From 2001 to 2002 there was a big supply increase meaning that the used-car Consumer Price Index hit the bottom in 2004, but it is likely to go up. New car prices are also expected to rise, which will tend to have a direct impact on used vehicles.
There were some new car incentives which have dropped down to used-car prices as well. Cars sold with heavy incentives are found to be cheaper when they get to used car lots. Also, since 1999 used-car prices as a percentage of new-car prices has been on a trend downwards. The cars that dropped most in price are the minivans, full-size vans, midsize SUVs and full-size cars whilst compact cars and the midsize cars have substantially dropped. Luxury- and mini-SUVs and the big pickups have declined the least. Dealers are paying more at auction for these types of vehicles so you will too.
Whatever you decide to do, try to make sure that you are careful with your financing. Try not to owe more to the finance company than the car is worth as if you have to sell it then you still end up owing money which isn't good. So, buy within your means.