1. Used Cars: Lower Price Tag, Less Depreciation
Remember the old adage that a new car loses thousands of dollars in value the moment you drive it off the lot? It’s still true, and it’s why used cars are better bargains. It’s also why you can buy a 2007 Porsche for the price of a 2011 Honda. Someone bought the Porsche for $50,000 and now it can be yours for $25,000.
2. Sales Tax on New Cars
Every ad for a new car glosses over the tax issue. Many state laws subject new cars to state sales tax, but not used cars. In Georgia, for example, if you buy a used car from a private seller, you won’t owe any sales tax at all. Comparatively, the sales tax that dealers have to add to the price of a new car can be thousands of dollars. Don’t underestimate the savings, and research your state’s laws on the subject before you make a decision.
3. Falling Registration Fees
In most states, the rate of your annual registration fee is based on your car’s value and its model year. In Colorado, for example, registration fees fall dramatically during the first few years after a car is manufactured. The rate is highest in the first three years, and then levels off after five years. If your state has similar rules, you can save about a thousand dollars by avoiding the new car registration fees and buying a car that’s at least three, or better yet five, years old.