The vehicle is one of the biggest components of the typical monthly budgets. And it is no wonder why. Cars are outright expensive! And that's before you consider the maintenance, insurance, gas, stuff, and more stuff that it takes to keep a car rolling.
The amount of money you spend on your vehicle has a big influence on the overall condition or health of your personal finances and budget. I wrote this post for that very reason.
I suggest that if you buy a used vehicle that lasts then you can have a lower vehicle cost and thus save more, pay off debt, or find some other beneficial use that would otherwise not be an option.
Now an obvious hurdle to buying a used automobile that is gonna last a lifetime is that you have no way of knowing how long any particular car, truck, or SUV is going to last. Though we don't have a crystal ball I do have some tips and facts that will help you pick a car that will run long enough to really get your money worth.
Before I get into how to pick the right car I want to focus on why we want a long lasting used car.
We want an "it will run forever" vehicle because it will save us unbelievable amounts of money. I have made a list of ways we save by going this route. I feel that people really need to work it out in order to really get the picture.
How a Used Long Lasting Vehicle Saves Money
Purchase Price
The price of a car with 75 k plus miles is far far less than a new or close to new car with less than 10,000 miles. It is impossible to pit any sort of generic number on the savings but I would say that a range of 6,000 to 12,000 is a very conservative figure the money saved by buying an older higher mileage car over a new to pretty much a new car.
Car Insurance
Another great way you will save money is through insurance. Because the car is older and valued considerably less than a new car the insurance company is taking less risk and thus you will have a much lower insurance cost then you would if you had a shiny new sports car. It's hard to say just how much you might save but I think $600 dollars annually is a pretty conservative figure.
Property Tax
Because the used car is valued so much less than a new car the property tax is also much less. This is because the property tax is calculated by taking a percentage of the car value.
Interest Expense from Car Loan
Buying a new car for 18,000 - 40,000 thousand is most likely going to require a loan. Financing a car is normal. But it doesn't have to be. You can get a great car for 4,000 - 10,000 and that kinda money can be saved. Buying a car with cash will save thousands in interest and fees. I think a savings of 6,000 is conservative.
Opportunity Cost
With all the savings you realize through buying a cheaper used car that lasts you will realize even more savings through the availability of that money to invest or benefit your life in some other manner. Though I'm not going to assign a figure to this I think it is important to at least mention.
Last Updated - 4/23/17
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