The Irreverent Guide to Your Car & Your Money

As the cost of gasoline rises, transportation costs go up. Duh! So, when you're finally ready to take the plunge to get rid of your gas hog, you have some decisions to make. For those of you who live in a large metropolitan area, with great rapid transit and the only time you drive is when you go on trips out of the city. This hub is not for you. It is for those of you that must own or lease a car.

Of course, the car you buy or lease is dependant on your family’s size. A single person is going to need something entirely different then that of a couple with 10 kids. Therefore, you must first determine what size car you need.

Next, you need to decide whether to lease or buy a car. Generally speaking, you are better off buying a good late model used car than buying or leasing a new car. Leased vehicles sometimes are good choices for businesses or for those of you with fat egos that feel you must always drive a new car. Dealers now use the term “previously owned” instead of used. I think that’s ridiculous, but who am I to judge the efforts of the used car dealerships in their effort to soften a negative public image.

So, why do I advise you to buy a late model used car? They’re cheaper, they can be bought with warranty in tact, and you don’t lose the money from that original transition from “new” to “used.” The major disadvantage is a slight ding in your ego, but I know you would never let your ego influence what you buy.

In addition to size, there are four factors to consider when car shopping:

1. Original cost
2. Resale value
3. Maintenance costs
4. Gas mileage

Consider points 1 and 2 above as a unit. If you buy a car for $25,000 but can sell it for $20,000 in three or four years, the car has actually cost you $5,000. This, of course, doesn’t include any lost interest on the money or the interest you had to pay to finance the car. However, if you buy a car for $25,000 and sell it in three or four years for $5,000, the car has cost you $20,000. It doesn’t take a genius to figure which one is the better buy.

The third item, maintenance costs, is very important. If you get a high maintenance car, the actual cost of the car can skyrocket to Mars and take your money with it. Be sure and check the maintenance histories of the various makes and models of cars before you tour the car lots. Also, if it’s available, get the maintenance record of the specific car you’re thinking about buying. Most reputable dealers that have purchased used cars from rental companies, or a government agency will have this information. Ask for it. If the car is from a trade in, the staff mechanics will have checked it out. Reputable dealers will also warrant the car for a period, usually 90 days but sometimes longer.

When you buy from other than a reputable dealer or a private party, make sure you have a good mechanic check out the car. There’s also a website, http://www.carfax.com/ that will tell you if the car has been in a reported accident. A full report from Carfax will cost you $25.00.

The next time we’re going to cover more on cars, their gas mileage ratings and more.