Are used cars or new cars better? The moment a new car leaves the dealership it's value falls. That makes the question a lot simpler to answer. Because autos depreciate, make the purchase only when it will lose the least value after you own it. That of course combines with the concern over the state when a car needs less maintenance. The slightly used car is about the best for both concerns. The value has already dropped from new car state. Someone else absorbed that loss. The car likely won't need constant repair work, and the warranty is still probably valid.



There are many places to look for late model used cars. People who buy or lease new cars trade in their old ones to the dealer. Those vehicles are looking for new owners. eBay has a whole division dedicated to used cars, while specialty companies such as Carmax list thousands of them. There are car auctions in every city. Dealers auction cars, as do cities when police confiscate them from criminals.

The most trusted source for used car prices is Kelly Blue Book. It lists cars by year, then the general prices for those cars in various conditions from excellent to poor. It also breaks down the prices depending on whether the car is being sold by a dealer or by a private individual. Because dealers pay overhead costs that private individuals don't, that distinction is shown.

What about financing a used car? First consider paying cash. That saves money in the long run. Yes, cars are status symbols. But bells and whistles can cost a lot of money. Buying a car like that used can not only help the budget, but creates less stress. Theft, wear and accidents are bigger worries for people with fancy cars. A scratch doesn't mean as much on a less expensive car.

Wealth isn't made by spending, even on a car. It's based on what you save and on net worth. Saving turns rich people rich. Good used cars help the budget.