Consider Buying a Used Car to Avoid Debt and Depreciation
As a culture, we seem inherently drawn to new, shiny things. Which begs the question: when the economy finally rebounds, will our spending do the same?
One way to tell is by the kind of cars we buy in the future. Before the economic meltdown, most folks bought their cars brand new. It was simply the thing to do. Sure, buying new was more expensive, but we figured that's what car loans and leases were for. Unfortunately, it didn't turn out too well for many of us.
Those new cars lost approximately 20% of their value the minute we drove them off the lot, according to Bankrate.com. After a year, another 10% in value went down the drain. Couple that with high loan payments, and you get a car that we couldn't afford to keep, and couldn't afford to sell.
Fast-forward to today, and Americans have been clipping coupons, pinching pennies and generally looking for ways to budget and save. That means favoring cash over credit, cutting out impulse buys, and, for many of us, buying used vehicles.
As it turns out, buying used isn't all that bad. Assuming you buy a certified pre-owned vehicle or otherwise work with an honest dealership, you're getting a car that's just as quality as a new vehicle, but at a much more affordable price. Buying cheaper means your car will depreciate less, you'll have a lower insurance premium, and your registration fees will be cheaper. Plus, you won't freak out as much over those inevitable little dings, dents and scratches.
With new car dealers and other retailers pulling out all the stops to increase lagging sales, it might be easy to fall back into our old reckless spending habits once the economy picks up. Or will we use the lessons we learned during the recession to move towards a more secure financial future?
If you're aiming for the latter, making practical purchases - for instance, buying a fully functional used car instead of a new one - is a way to start. Another way is by lowering debt. With less bills to worry about, you might free up more cash for paying your mortgage - or that car loan. Worried you've got too much debt to pay off alone? Bankruptcy might be able to help. Learn if bankruptcy can free up your financial future when you try a free no-obligations personal debt analysis with an Atlanta bankruptcy attorney.