When should you buy a used car?
Most will financial experts would recommend buying used vehicles around the two-year mark.
By buying pre-owned you wind up saving 40%, you can still get a nice car and cut your payments in half. If you manage to catch a Labor Day deal, you get to save even more – see Edmunds, KBB, Find the Best Car Price. A simple way to guide you in buying your car is this:
As a general rule of thumb, your car should never cost more than half of your net annual income!
For example, if you take home $40,000 a year a vehicle that costs $20,000 is way too expensive.
Other items to consider when buying a car are the cost associated with:
- Maintenance costs,
- Annual fuel expenses,
- Insurance costs, and
- Personal property taxes.
Sometimes a car payment is, in fact, manageable. However, when coupled with all the other associated expenses, it can become unmanageable and impact your savings rate!
Every time I see this on Facebook I want to scream,
Just purchased my dream car, hard work really does pay off!”
Or in my case, I simply said “New Whip,” which as you can see in the photo below that I posted on October 3rd, 2014…