Used Cars: Tips to stretch your dollars when you need a new ride
Average new car depreciates 11 percent in your first minute of ownership
If you're in the market for a reliable vehicle, smart shoppers know that buying slightly used can be one of the most cost-effective options available.
Josh Elledge, the man behind SavingsAngel.com, has a passion for showing others how to save money.
When it comes to buying a vehicle, he told us the best way to beat that new car depreciation is to simply avoid it.
"I recommend that you never, in almost any case, buy a new car,” Elledge told WKMG-TV. “You're going to lose so much money when you're the first owner of that vehicle."
So just how quickly does a new car lose its value? According to USA Today, the average price of a new car is $33,560. Simply driving off the lot drops its value by 11 percent, down to $29,868.40.
During the next five years, that new car’s value falls by about 20 percent per year. By the fifth year's end, the same car is only worth $12,417.20, which is just 37 percent of its original sticker price.
According to Elledge, purchasing a slightly used car will net you big savings.
"If you buy a car that's a few years old, you'll drive off the majority of that really sharp decline in value of the vehicle," Elledge said. "Let somebody else take the hit for that, you should get yourself a better deal."
So what are Elledge's three best tips for hacking the buying process and getting the best deal?
First, he told us, before you head to a dealer, find out the actual selling price of cars near you. Apps like the one from TrueCar.com let you see what others paid for similar vehicles.
"So it's gonna put that on a bell curve and let you know if you are, in fact getting a good deal, in terms of all the other cars that are being sold in our area," Elledge said.
Next, he suggested you check with your bank for any promotions. Elledge told us, "I'm a member of USAA, so in addition to that value that I got, they [also] gave me an additional $500 incentive."
Finally, he said, shop around, and consider looking beyond a traditional dealership. Elledge found his best deal locally at Off-Lease Only. Though the parent company has four lots in Florida in Orlando, Miami, North Lauderdale and West Palm, Off-Lease Only can provide local pick-up service for out-of-state buyers, or ship a car out of state.
Elledge pointed out that most of these cars are lease-return vehicles sourced from auto auctions across the country (they have some non-lease vehicles as well), and there's no haggling: The price is the price.
Additionally, instead of the usual car salesman, at Off-Lease Only, you are met by a row of kiosks to help you find a car.
"So one thing you're gonna see right away at Off-Lease Only is that it's easier on the wallet than it is on the eyes." He told us,. "It's more like coming to the DMV than it is actually coming to a very glitzy, glamorous car dealership."
Elledge told us you're essentially on your own when you come here.
"When you come and you find a car that you want to test drive, you let them know and they give you the keys and they say, 'Come back in 15 minutes and let me know if you wanna buy it.'"
While the price may be right, Elledge warned that this car-buying experience isn't for everyone.
"It's a completely different experience," Elledge said.
Elledge told WKMG-TV that his recent purchase at Off-Lease Only saved him $7,000 because he was comfortable doing the research, and picking out the right car for his family by himself.
"I don't mind doing my own research. I don't mind doing my own detective work. I don't need someone holding my hand. I just want a great deal," Elledge said.
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