Mrs. FiredUp and I are as excited to buy new “stuff” as the next person. I can tell you, however, that we rarely buy depreciating assets when they are new.
What do I mean by this? When you purchase a new car, its value immediately depreciates 20% or so because it is no longer a new car, it is used. Therefore, it may not make sense to purchase a new car, when you can buy a “like new” car for a huge discount. As an example, off-lease vehicles, with mileage under 20,000 miles can be purchased for a 20-30% discount. The same goes for boats, RV’s and other expensive, depreciating items. There are companies that specialize in acquiring and selling off-lease vehicles, in addition to the used car lots at the new car dealer.
In preparation for our 25th anniversary vacation to the National Parks in Wyoming, Utah and Arizona, we purchased an used RV trailer and a used pickup truck. We paid less than $4000 for a RV trailer in like new condition, that would have cost around $30,000 new. A few years later, when we were done traveling, we sold the RV trailer for $4500. We still have the pickup truck, as we can use it on a daily basis, but there is a good chance we’ll sell it for what we paid for it or only a few hundred dollars less. You simply can not make the numbers work when comparing buying new to buying used vehicles.
When it comes to purchasing a vehicle that you anticipate putting very high miles on in a short period of time, there’s another consideration. As you rack up mileage on a vehicle, the value goes down very quickly. Therefore, high mileage drivers may want to consider vehicles with higher mileage, 80,000 miles as an example, with track records for lasting several hundred thousand miles. If you can buy a used vehicle for 25-40% of it’s new car value and then drive it for another 150,00 miles, then more money stays in your pocket and not at the car dealership.