Save Thousands Of Dollars Every Year
There are hundreds of wealthy authors out there writing stories in books and blogs about how purchasing a late model preowned car will add to your personal wealth. The fact is, many people prefer new cars because the car or truck has never been owned by anyone else. Some really like the “new car smell” as well.
The fact of the matter is simple. No matter what kind of an illusion of a deal a new car dealer can give you, you will lose thousands of dollars in depreciation in the next 2 years.
According to this article on Get Rich Slow, this author does some math and detail explanations on the depreciation process. After the first year, a new vehicle loses an average of 35% of it’s value.
Think about that for a moment. If you pay $30,000.00 for a new vehicle, in one years time it could be only worth $19,500.00. The following year it could be only worth $15,000.00.
So after only 2 years of car ownership your vehicle is worth less than you probably owe on it. To make the matter worse, new car dealers encourage you to finance a vehicle for 5 or 6 years.
Do you really plan on keeping your car for that long? We refer that as being “upside down” in the car business. Many people come in and want to trade in their 2 or 3 year old vehicle for one of our latemodel preowned cars. The problem is they have a vehicle worth $15,000.00 in trade, but they owe the bank $23,000.00 on it.
This is why moderately wealthy people have money in the bank. They will purchase a 2 or 3 year old car with low mileage and drive it to the ground. Some will keep the vehicle for 10 years or more, then start over again.
So why not let someone else pay for your depreciation? That’s where we come in. We get our vehicles from local auctions, and many of them are repossessions. We also have relationships with local rental companies. When car rental companies purchase vehicles, they buy them in bulk. They end up getting each vehicle for thousands less than you would pay.
The cars they will buy this year will be sold to us next year for a huge discount. After a rigorous inspection, these vehicles will be sold on our Tampa Bay car lot. This is how we can sell late model used Chrysler Sebrings for less than $10,000.00.
Average Joe likes to buy average two year old cars and sell them five years later. He realizes that this costs 35% of the new car price in depreciation, but only 7% per year.
Silly Eddie buys only new cars and sells them to people like Average Joe two years later. Silly Eddie loses 50% to depreciation over two years. This is 25% per year.
For a $20,000 car, Average Joe loses $1400 per year and Silly Eddie loses $5000 per year. Silly Eddie’s car is always under warranty, but Average Joe is unlikely to have problems costing the $3600 he saves in depreciation. That Silly Eddie! Copyright © 1996 Alacrity Research
If you’re in the market for a vehicle, we invite you to check out our fabulous prices. Simply click the photo above and have a look around.
