by Vickie Britton

Created on: April 21, 2009

Would you throw away several thousand dollars just to impress your friends? The first and foremost reason to resist purchasing a new car is that they will lose that much value the minute you drive them off the lot. Unlike a home, cars are not really a good investment because they quickly depreciate in value. Once you have driven your new car around the block, you have a used car, which is not worth anywhere near what you just paid for it.

Your New Car will Rapidly Turn into a Used Car

The longer you drive it, the more the resale value of a new car goes down. By five years, the car you are making big payments on will not be worth anywhere near what you are still paying. Once your car gets ten or twenty thousand miles on it and picks up a few dents and dings, it can only be sold for the blue book value or under. And you won't get much more for a trade-in than you would with an older car. Cars are at continual risks of accidents and damage. If your car is in a serious wreck or the engine blows, there goes much of your investment.

Car Styles don't Change Much

In many cars, the body style does not change much from year to year. A low-mileage used car in last year's model can be purchased at a much better price than a brand new car. A newer-model, low-mileage used car usually comes with a warranty and is just as dependable as a brand new one.

Payments and Insurance are Much Higher on New Cars

The newer the car, the more the payments on it are going to be. In addition to this, the cost of insuring a new car is much higher. Unless you pay cash, the loan holder will insist on full coverage, which can be quite an expense. Taxes, annual tags and licensing fees are also much higher for a new car. These hidden costs can really add up, even more than you think.

Consider the Gas or Hybrid Question

A special concern about purchasing a new car right now is at the current time, no one can accurately predict what is going to happen with the gasoline situation. Many potential buyers are holding off purchasing a new car until they see what gas prices are going to do. Gasoline may skyrocket, and the use of battery-powered cars might eventually take over the market. If everyone starts wanting the hybrids, then a completely gas-powered car may lose even more value and even be difficult to sell.

Buying a new car is a luxury that few can really afford. In the long run, the benefits just don't outweigh the pleasure of driving a new car from the lot.

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