Cars | Getting the most of

Cars and expenses related to vehicles form a major part of the average person’s budget. Hence careful attention needs to be paid in evaluating the motor vehicle scenario, in order to get the most bang out of the hard earned buck. In the modern day, cars have become a necessity of life rather than the luxury they were several decades ago. However, good hard earned money must be properly spent on cars rather than buy in an impulse. Sure everybody wants to be driving around in a fancy luxury vehicle but does it make financial sense or not is a different story.

The key to note is that the moment you drive off the car dealer’s lot with a new car, its value drops down; and it continues to drop down dramatically in the first couple of years and then the rate of decline in value slows down in the subsequent years. This of course is a generalization for most cars; there are always some exceptions. I have therefore found that the best value for my money is in getting a car that is a couple of years older, so that somebody else has taken the hit for the huge initial depreciation and thus I end up with a great vehicle at a reasonable price.

That is not to say that one should never buy a new car. I have found that if I buy a new car, I keep it until it basically dies. I do not trade cars often because every time I trade, I seem to lose money. What I have found works very well is that I will buy a new car for my wife and then after a few years, I will take over driving that car until it essentially becomes un-fixable. Then, I will purchase another new car for my wife and I will take over her car which was purchased new several years ago and repeat the process. This way, we always have dependable vehicles without having to eat the early huge depreciation for someone else.

One also needs to evaluate the kind of car that will meet the necessities of one’s lifestyle. I have seen people buy huge fancy pickup trucks when they do not plan to haul even a pound of groceries Pick up trucks are great as long as you put the bed of the truck to good use; why have all that towing capacity if you are not going to use it. The reverse psychology is applicable to a few people also; I know of a friend of mine that bought a hybrid car that runs on gasoline and electric batteries for the purpose of getting a high mileage on fuel – except that he drives only a few miles back and forth to work – the increased up front cost of the vehicle I don’t think justified the economies in fuel.