When you are shopping for a car, there are a lot of great money saving reasons to buy a used car with low miles rather than a new car, or a very used car. The value of the car, the projected maintenance, and car life are just a few things to look at that can also save you money if you buy gently used rather than new or well used vehicles. You can save several thousand dollars up front in the cost of the car and at least several hundred down the road to put into your cash reserve by buying used cars with low mileage.

Have you ever heard a new car loses its value the day you pay for it and drive it off the lot? Well, it's partially true. If you buy your car new, on average it will depreciate in sale price 20% of the value of its purchase price in the first year. That means if you buy a brand new out of the factory car for $20,000 (the lower bound average new car price), it will only be worth $16,000 one year later. Some cars will loose up to 40% of their value within a year after purchase if you buy them new. The second year of a car's life isn't much better as on average your vehicle will depreciate another 15%. The second year of its life, your $20,000 car is only worth $13,000. The depreciation of your car drops with every year older it gets, but purchasing a car two to three years old can save you $10,000 on average over the price of a new car and can be paid off a lot faster. You don't have to put that $10k in your cash reserve right away, but for every $1 you pay off on your car, put another $1 in your cash reserve. If your car payment is $300 a month, by the end of the year, you could have $3,600 in your cash reserve.

One of the benefits of buying a car new versus old is that new cars generally cost a lot less to maintain for a longer time than if you were to buy a car that was ten years old and had 100,000 miles on it. You can get the same benefit as buying new when you buy a used car with low miles. A used car retains its value better than new, as was mentioned, but if it only has 10 or 20,000 miles on it, you still can depend on it to not cost you a lot in maintenance. As long as you keep to the owner's manual recommendations for a maintenance schedule, a slightly used car will cost almost exactly the same amount to maintain as a new car, and it will save you hundreds of dollars in repairs that a higher mileage vehicle is more prone to have. Cars are known to breakdown and need major repairs when they hit the 100k to 120k miles mark. You can avoid those repairs (or purchasing a new vehicle). If you buy a car with 80,000 miles on it and the timing belt snaps within the first two years of ownership, you have a $1,500 bill in maintenance in just two years of ownership, whereas if you buy the same car, slightly newer with only 10,000 miles, you can save yourself the $1,500 bill for eight to ten years if you are putting 10k miles on your car every year. That's a savings of $562.50 per year that you can put into your cash reserve because you are paying the same amount in maintenance costs over eight years that you would in two with an older vehicle.