## Government car auctions ny - Government Car Auctions

once you have an idea of the kind of car

you want and roughly how much you’re

looking to spend the next question might

be new or used a used car will often

cost less than a new one but a new car

may be more reliable and have fewer

unexpected repairs that can impact your

schedule and budget for this example

let’s take a look at two cars one new

and one used and then compare and

contrast all the variable expenses you

might encounter with each car over the

next five years like the cost of the car

Government car auctions ny

insurance and finally maintenance and

repairs but first let’s start with the

cost of the actual car so over here

let’s say we have a brand new car with a

sticker price of $19,000 and over here

we have a used car that is the same make

and model as the other one just five

years older that we found for sale by

its owner for ten thousand dollars now

you may be wondering why is the used car

so much cheaper than the new car there

are a couple of factors one is that the

new car comes with a warranty which will

cover some of your repair expenses but

the biggest factor in this price

difference is depreciation as a car gets

older it loses value that is it

depreciates so this new car that costs

$19,000 after five years might only be

worth about $10,000 even if you’ve kept

it in good condition and the same car

might only be worth about $5,000 in

another five years

as you can see depreciation doesn’t

happen at a constant rate sure it’s

almost always going to go down but a new

car loses value fastest the moment you

buy it but then slows to a more constant

rate after the first few years if you

plan on driving your car until it falls

apart depreciation won’t matter as much

because you’re not going to resell it

but if you plan on trading it in or

selling it after five years it can make

a big difference with a new car in five

years your car might be worth about nine

thousand dollars less than what you

initially paid and with the used car

over five years your car might only be

worth five thousand dollars less

now let’s take a closer look at some

other differences starting with the

financing you may be wondering if you

can finance a car you buy from an

individual fortunately you can get this

kind of financing from a bank or a

credit union but when you purchase a

used car you’re likely to get a higher

interest rate than when you buy a new

car so let’s say that the annual

percentage rate or APR on a five-year

loan for the new car is three point five

percent and the APR on a loan that you

get for the used car could be something

like four percent using an online loan

calculator you’ll find that on the new

car you’ll be paying about twenty

thousand seven hundred dollars over five

years

that’s 19 thousand dollars in principle

and one thousand seven hundred dollars

in interest with monthly payments of

about three hundred forty five dollars

on the used car you will pay about

eleven thousand fifty dollars over five

years ten thousand dollars in principle

and one thousand fifty dollars in

interest with monthly payments of about

one hundred eighty five dollars so even

though you have a higher interest rate

on the used car you’ll pay much less in

interest and in monthly payments because

your principal is much less on the used

car then on your new car next let’s

compare gas mileage let’s say the new

car gets thirty three miles per gallon

and the used car gets twenty nine miles

per gallon and you drive about fifteen

thousand miles per year let’s also

assume that gas will be a constant four

dollars per gallon over five years

taking the miles driven divided by the

miles per gallon times the price of gas

per gallon we would be spending about

nine thousand one hundred dollars for

gas for the new car and about ten

thousand three hundred fifty dollars for

gas in the used one then there are

insurance rates to consider insurance

rates vary based on a lot of different

factors and in looking at new versus

used the difference in the rate for you

will likely be based more on the

replacement cost of the car the more

valuable the car the higher the

insurance rate so while a new car might

get you some discounts for new safety

features generally a used car that’s

less valuable is going to cost less to

insure so with a new car your insurance

might cost one

five hundred sixty dollars a year over

five years seven thousand eight hundred

dollars and with a used car your

insurance might caused one thousand two

hundred dollars a year and six thousand

dollars over five years now let’s look

at maintenance and repairs this is the

trickiest cost to estimate because it’s

unpredictable and major repairs can have

a big impact on your budget with a new

car major repairs may be covered by a

warranty in the first few years

### Government car auctions ny - Government Auctions Cars For Sale

so let’s estimate that over five years

you spend three thousand dollars total

on maintenance and repairs on the new

car now when you buy the used car you do

have the option of buying certified

pre-owned this will cost a bit more but

it’ll also come with some sort of

warranty but for this example let’s just

stick with the car you bought from its

previous owner the cost of regular

maintenance typically increases as the

car ages and so does the chance of

needing a major repair major repairs can

be inconvenient – they take time and

sometimes you might have to get a rental

car while yours is in the shop for the

used car you might be lucky and only

need to spend about four thousand

dollars on maintenance but a more

realistic number may be around six

thousand dollars on the used-car so

adding this up you’d spend a total of

forty thousand six hundred dollars on

the new car and 33 thousand four hundred

dollars on the used car over five years

that’s a difference of about forty

thousand six hundred – thirty three

thousand four hundred seven thousand two

hundred dollars less on the used car now

keep in mind this doesn’t take into

consideration the value still in the

cars the new car probably has a few more

years left in it than the used one and

if you were to resell them you’d be

getting about ten thousand dollars for

the new car rather than about five

thousand dollars for the used car but

we’re looking at a lot of variables

after all with certain cars and

situations the new one may end up

costing you less than the used one and

there are multiple other things to take

into consideration a new car will

probably be more reliable with newer

features and it may be safer or be

better for the environment with a used

car you’ll have lower monthly

which could be good for your budget but

it may also be less reliable and you

could have larger unexpected costs when

it comes to repairs by looking at your

own needs and budget and doing the

research and the math on the cars you’re

interested in you can figure out which

is the best choice for you