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i will never buy a new car, let somebody else eat the initial depreciation
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JJ,
knemo is absolutely right---let someone else pay the depreciation! most vehicle's depreciation is within the first 2-3 years, depending on the make/model/year of the vehicle. the depreciation starts to slow down after 3 years.
i'm also going to try to tie in two related subjects: financing (not leasing) and depreciation. when you finance a vehicle, the finance companies apply a formula called the "Rule of 72" which is calculated on the (APR x value of the vehicle x length of time) at the time of purchase.
a short explaination goes something like this: the first owner's first few years of car payments are actually paying for the depreciation, not the principal on the vehicle itself. hard to believe? its true! why? because these finance companies are trying to recoup the max amount of interest because they know from history that:
a) the car's resale value (MSRP - historical depreciation) will decline at a rapid rate but start to slow down around year 3.
b) the car may suffer from reliability issues (read = FORD)
---then the owner sells the car
c) the owner may get sick of the car or want to buy another vehicle---the owner sells the car
d) the car may be stolen, etc---the owner loses the car!
So when you buy a, say, 3 yr old vehicle, much of that depreciation will have been "paid off" by the previous owner. Since the vehicle's market value has been decreased by the amount of deprecation, your total finance amount will be much less. its a smarter buy, especially for vehicles that typically have high reliability like toyotas and hondas.
other things to consider:
many of the major problems happen with all vehicles typically occur within years 1 through 3. if you happen to find a 3 year old *any* vehicle with no problems, you're going to get a better deal than if you buy new.
also, given that the finance rates are soooo much better now for used cars than they were even 5 years ago, the 2.9% apr you'll probably get will not make a huge difference in monthly payments if you go through an internet finance co like
www.peoplefirst.com.
i suggest doing some more homework/research and especially looking at reliability reports from consumer reports on that chevy truck you are looking at.
bob