Tell somebody you write about used cars for a living and after the typical reply of, “Really?” there is always a follow up question: Either it’s “Is now a good time to buy a used car?” Or, “Is now a good time to buy a new car?” I hate to sound like a used car salesman, but BOTH are the wrong questions to ask.
Instead, when it’s time to buy your next car, in this current economy, the question you need to ask is: I have x amount of money – should I buy used or new? Let me take you through the steps with some examples from mid-March 2009. I don’t normally date my used car advice, but I feel compelled to with the way the price of used and new cars continues to fluctuate.
I’m going to break this down into three categories:
• $10,000 To Spend
This category is a no-brainer in my humble opinion. You have to go with a used car here because the new cars in this price category are the most basic of transportation and generally lacking in some basic safety equipment.
• $15,000 To Spend
Similar thoughts here but your selection starts to widen in new cars with some great safety features for not a lot of money. Obviously, I write about used cars, so I am biased towards them. Thanks to a truly churlish economy you can still find a wide selection of three-year old used vehicles for $15,000 that are going to fit your every need. I’m not going to make the final call here – you are. In this category, if you can find a new car that meets your needs, buy it, but only if you can get fantastic financing and cash back from the new car dealer. It’s the financing that is going to be the final decision maker here.
• $20,000 To Spend
As you find yourself with more money to spend, the arrow tilts more favorably toward used cars. The simple reason is luxury. You can find some amazing deals on luxury cars in this price area. A used 2006 Cadillac DTS with less than 50,000 miles on it can be yours for about $19,900. I once drove a 2006 Cadillac DTS behind a Corvette on a secluded country road and easily kept pace. I’ll admit the driver in front did lose me once we hit some twisty roads. Another example of a good bargain is a 2004 Lexus ES 330 with just under 30,000 miles can be had for about $16,900.
So, if you want some luxury in your life, but don’t have an exceedingly fat bank account, a used car in the below $20,000 range is going to be your best bet.
• $25,000 To Spend
Frankly, if you have $25,000 to spend on a used car, you’re going to have to make this decision based on your ability to get financing and cash back from the new car dealer. There are a lot of great used cars to love in this price range. For example, a Certified Used 2006 Mercedes-Benz C350 4MATIC AWD Sedan with less than 31,000 miles can be bought for $24,900. Or, a certified used 2006 Volvo XC90 AWD 2.5T 7-Passenger with 26,500 miles on the odometer can be yours for a buck under $25,000.
