The question of whether to buy a new or used car in this market is difficult to answer without considering several key components to the decision making process.  As women car buyers are classic shoppers,  fraught to analyze and scrutinize, this is the perfect scenario in which to pencil the numbers for a best solution decision. Here are the four basic principals to start your process, however, this exercise comes with a warning; do this homework and act upon it in 10 days time. Long drawn out suppositions will lead to chaos as the car market changes every week to 10 days, and three of these four components can change drastically, radically altering the outcome of your decision if you wait to long to act. Start with the car.

  •  Is this the best size, horsepower, safety and style for your short and long term goals?
  • Are you flexible on color and features?
  • Do you have more than one location for factory-warrantied service?
Principals that can shift you from new to used or back again:  Price disparity, product availabilty and residual value.  Price disparity. 
  • What is the net difference between your best negotiated price on a new 2011/2010 and the cost of a 1-2yr. old like make and model?
  •  How much is an extended service contract for the used vehicle?
Product availability. 
  • How available are the new cars in your color and features vs. used ones?
  •  How far are you willing to travel to purchase a used car of this type?
  •  Are the colors, features important to you changing from the previous year? 
  • Were there any recalls or discontinued items of importance to you in your reason for selecting this car?
Residual value. 
  • Is this a new model for the
  • Has this model or make been discontinued, or is it likely to be discontinued in the next few years.
  • If the model isn’t new, what are older models selling for compared to their original MSRP?  Look it up on WWW.KBB.Com
HINT HINT: MERCURY will go away in 2012. Rumors of Saab and Suzuki going the way of Hummer and Saturn have cut sales by 50%. Let’s use the 2010 KIA SOUL  as and example of this exercise. A brand new 2010 Kia Soul basic model had a $17900.00 sticker price when it came to market last year.  MyCarlady got the best price of $ $17000.00 (below invoice) for many clients.   The NEW KIA SOUL still comes with a full 5 year, 60k mile powertrain warranty and 10 year or 100k mile powertain warranty. When you buy NEW you can have the color and basic features you want, and up until late summer 2010 you might have found a new 2010.  At the same time a pre-owned-USED KIA SOUL in LAS VEGAS, with under 10k miles, could be found at a selling price of $14,500.00  The remaining warranty was 4 years and 50,000 miles (Approx.) of powertrain warranty, however the 10/100k powertrain was and IS NOT transferable to the second owner.  To get the same 10/100k warranty on the USED KIA SOUL would cost the client $1000.00 out of pocket.  Hence, the actual cost savings was $1500.00 and the available color or features may not have been preferred. However, now that the 2011 NEW KIA SOUL is on the market, the price of the new 2011 is only slightly higher than the new 2010, at $17500.0. Factoring the same warranty, a few NEW FEATURES and NEW COLOR combinations, while the same 2010 USED KIA SOUL with 10,000 miles has slipped to a purchase price of $13,000.00 without the warranty or $14,000.00 with the warranty, making the net price disparity $3500.00  This $3500.00 is a markedly higher gap, one that could certainly change a woman or man’s car buying decision. The residual value of the KIA SOUL is too new to have a long term history, however, if one would consider other HYUNDAI or KIA USED CARS that started with a $17,000 MSRP over the past 5 years: NEW KIA SPECTRA, NEW HYUNDAI SONATA, NEW KIA OPTIMA, NEW HYUNDAI ELANTRA versus the present market for these same vehicles;  USED KIA SPECTRA, USED KIA OPTIMA, USED HYUNDAI SONATA or USED HYUNDAI TUCSON, USED KIA SPORTAGE, USED HYUNDAI ELANTRA, you will find the used car prices of these models have held up reasonably well, compared to similar Japanese  makes, and in some cases higher than comparable domestic vehicles of the same age and miles. In conclusion, the difference of $1500 to $3500.00 is solidly based on market timing and product availability at the time of purchase, but the strategy used here will keep the focus on the dollars and cents and the emotion out of the decision. BTW, The cost of interest between buying new vs. used, should not be factored into the equation shown here, as an exact purchase price must be the first determining factor. There is a separate theory for interest rate reduction on new versus used, and that should not be a consideration in this example. Once the purchase price is defined, then the borrowing component can be brought into play.  However, that becomes part of the credit score discussion. Part 2 in this “Women CAR BUYING” advice column.  If you have questions about how incentive interest rates can effect this outline, feel free to contact me at sarahlee@mycarlady.com,mvides422@gmail.com,carlady@cox.net  or subscribe to this feed to get the next installment of car buying advice for women (and men). I welcome all questions and comments at : ASK MYCARLADY 
If you need any other car buying, selling, trading or financing assistance on any new or used vehicle, please do not hesitate to email me at sarahlee@mycarlady.com,mvides422@gmail.com,carlady@cox.net or give me a call; 702-521-7546 I’m here to help you with any of your automotive needs and advice is free. Sarah Lee is an automotive executive with 20+ years of experience. She writes about Cars, and is a staunch consumer advocate on car related subjects. Her company: MY CARLADY is a car buyer’s service committed to getting you the best deal on your next new or pre-owned vehicle. You can reach her at CAR DEALS   Follow mycarlady on Twitter
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