From: "David Neeley" To: Subject: Cars: New vs. Used Many "rules of thumb" don't hold every year for every family in car buying and use. If you trade cars every year to every three years, that's one thing. If you tend to "run them until the wheels fall off" that's another! Secondly, all the interest rate and rebate deals in the last year or two have drastically altered the car market. When new cars are so cheap, used cars drop in value even more! However, if you tend to keep a car for the better part of a decade (or even longer), the difference in the cars may be less than you might think when all is said and done. For instance--is there a car with a substantial rebate and/or a no-interest note? You won't get either with a used car. Or how about extended warranties? I strongly suggest the only ones worth buying are from the car manufacturers (and *possibly* from major insurance companies). Independent warranty companies simpy go out of business too often to make them worth considering. Saving the money in advance to pay cash for a car or truck is obviously a good strategy--*most* years. If you are very good with your budgeting discipline, though, a 0% interest deal may be preferable...if you buy new. I have a low-interest balance on my own car, a 2000 Ford Focus. It has three years and 54,000 miles extended warranty still to go. If I had it to do over, I'd have bought used. On the other hand, if you want or need a truck, you may find that resale prices are so high compared to new (depending upon where you live) that buying a new one with the various incentives may be the economical choice. Finally, if you live in areas of the country with salted roads each winter or near the sea with the salt air, you may have trouble finding cars or trucks that don't have substantial corrosion among the used cars. Here, it may actually be worthwhile to buy a car or truck from the South and driving it home...but that obviously requires a great deal of planning to pull off and still make it worthwhile. If you buy used, I suggest having all the rubber bits--tires, belts, hoses, suspension joint covers, and the like--carefully checked and replaced if necessary. The one car I didn't do that broke a fuel injection hose from dry rot (too little use), caught fire and was totaled. Just a few factors to add to the equation. David