Money Management

A New or Used Car, Both the Same Price. Which Should You Buy?

Know what you need vs. what you want. Have your love affair with a person, not a car.

My daughter bought a 3-year old Mercedes GLA 250 after driving a very costly clunker around for years. She could have purchased a small, new car at the same price, but she felt safer driving the Mercedes.

Her friends and colleagues chastised her for buying such a car just to “show off.” I told her to ignore those people. She works in the mental health field, and my wife told her that if she were a doctor, nobody would even notice. Ignore their comments.

My brain woke me up at 3:30 AM to let me know that it did not like that response. I assign my brain problems, go to sleep, and wake up with solutions. So, I read novels before bed and don’t dwell on problems. Last night, the brain took on the problem on its own accord.

Her Mercedes cost less than most new cars, feels safer and costs less to run. It makes the most sense.

She drove a clunker around for years. There is a difference between driving a car that is about to fall apart, and one that has started falling apart. That clunker cost over $10,000 in repairs over the last two years. That is over $400 per month! So, she started looking for a replacement.

Needs vs. Wants This sounds easy on the surface.

Write them down.

It’s not as easy as it sounds. Based on the clunker experience, her needs were:

· Safety · Dependability · Low operating cost · Low maintenance cost and frequency · Maximum Price

Other things, like color, make/model, status, frills like leather seats, wire rims, etc., are wants. Body type, like sedan, SUV, or convertible would generally be a want. Of course, if you hate green, it could become an exclusionary need.

Finally, you have to decide if new or used is a want or need. You might wind up with a sub-compact new car instead of a better used-car that would suit all of your needs.

The Mercedes met all of the needs. She had no additional wants.

The results When writing software, I always looked for unexpected benefits. She discovered a number of them when she got the car home.

1. The insurance premium went down. 2. Mileage went from the clunker’s 15 to 35 MPG. 3. Oil changes cost less than the clunker and were much less frequent. 4. She was able to buy an extended warranty at a low price. After the experience with the clunker, she feels safer with the warranty. 5. The projected depreciation is less than a new car. 6. Features that she never expected to have.

Destiny She didn’t even intend to look at a Mercedes. She, with her husband, going down car-dealer row from lot to lot, were diverted into the Mercedes lot by some construction.

The sales lady showed her a new one that cost over forty thousand. When her husband indicated the price range, the sales lady said that they had ONE car received as a trade-in. They had just finished servicing the vehicle and it wasn’t on the lot yet. She also told them in advance that the dealership did not negotiate on price.

The price was reasonable, within her price range, and the car met all of her requirements. The sales lady did an excellent job finding the car and anticipating all of her questions, according to my salesman son-in-law.

They felt that they had to decide immediately since another customer was waiting to look at the car. My daughter is thrilled with the car.

They were at the dealership on the right day and the right time. An hour difference either way and she probably would not have gotten that car.

It was meant to be.

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This article is for informational purposes only, it should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions