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Question:


Is buying a brand-new car a bad financial move because of the depreciation?
-JuniorBean


Answer:


This topic comes up a lot. The conventional wisdom is that buying a car that’s a year or two old makes more sense than buying one off the showroom floor because depreciation is greatest earlier in a vehicle’s life. This could be one of those occasions when the conventional wisdom is correct. In fact, it could be truer now than ever because they don’t make ’em like they used to – they make ’em better. Cars may not be as stylish as they used to be, but they are more reliable and stay on the road for more years and more miles. A study by J.D. Power & Associates, a consumer-research firm, found that the number of problems reported by owners fell by more than half between 2003 and 2010. When it comes to running up the odometer, some have observed, 200,000 is the new 100,000.

 

-Conrad de Aenlle



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