Play devil's advocate here, SVTP.
A pretty successful guy once told me that the best way to save money buying cars was to do the following:
1. Pick a vehicle that is likely to hold its value better than others
2. Buy said vehicle for the best deal possible
3. Pay off said vehicle within a year or two
4. Trade in before depreciation gets out of control (2-3 years, before 60k miles, etc.)
5. Trade in at a point in the year when new models have been on the lots for awhile and incentives are aggressive
That strategy, assuming you have the means to do it, means that you pay the spread between the old and new cars once you pay off your initial purchase. By minimizing the cost of the spread, you could potentially be driving new(ish) cars for the rest of your life for a relatively low cost.
The problem is that I have never seen a new car hold its value well enough for this to make financial sense. If the strategy is BS, what's the most financially responsible way to buy a new car? Any tricks beyond obtaining the lowest interest rates and shortest loan terms possible?
A pretty successful guy once told me that the best way to save money buying cars was to do the following:
1. Pick a vehicle that is likely to hold its value better than others
2. Buy said vehicle for the best deal possible
3. Pay off said vehicle within a year or two
4. Trade in before depreciation gets out of control (2-3 years, before 60k miles, etc.)
5. Trade in at a point in the year when new models have been on the lots for awhile and incentives are aggressive
That strategy, assuming you have the means to do it, means that you pay the spread between the old and new cars once you pay off your initial purchase. By minimizing the cost of the spread, you could potentially be driving new(ish) cars for the rest of your life for a relatively low cost.
The problem is that I have never seen a new car hold its value well enough for this to make financial sense. If the strategy is BS, what's the most financially responsible way to buy a new car? Any tricks beyond obtaining the lowest interest rates and shortest loan terms possible?
Last edited: