Most people recommend not to buy a new car because they depreciate so quickly. And we all know you shouldn’t put a lot of money into a depreciating asset – especially one that most people won’t keep long enough to pay off. Well, I went against that advice, and bought a new car in November of 2005. There were several reasons I bought a new car, but I will tell the story and the reasons will unfold.
The first reason was – I needed a different vehicle. The truck I owned at the time was a manual transmission, and I was scheduled to have back to back knee surgeries (one on each knee). I lived alone at the time, so I needed a reliable means of transportation that wouldn’t cause me pain to drive. I needed a car with an automatic transmission. Oh, and I lived in a location where having a car is a necessity due to the complete absence of public transportation.
Lack of local options. I lived in a fairly small, military town in west TX. There are several recurring themes in military towns – one of which is the propensity for auto dealerships to charge much more than they would in other towns. The other thing I had going against me, was small town dealerships often charge more than dealerships in large cities. It only made sense for me to go to a larger city to buy my car.
So I traveled. Thankfully, my parents lived in Houston, a large city with plenty of dealerships fighting for sales. One weekend I made the 6.5 hour drive to visit them and shop for another car. I had done plenty of research and determined I wanted a late model used car, and I had several models in mind. But there was a problem. A big problem.
A natural disaster. November 2005 was shortly after Hurricane Katrina, and almost all of the used cars in the Houston region were bought up by hurricane refugees who relocated to Houston after the gulf region was devastated. The remaining used cars were almost as expensive as new cars, and damaged cars were just starting to “flood” the market. There was a substantial amount of automobile fraud around this time period. Based on the price I would have had to spend to buy a used car, and the added risk of buying damaged goods, it was actually better for me to buy a new car.
I did my research, and narrowed down my choices to a few selections, then test drove them. In the end, I purchased a brand new car that was relatively inexpensive, economical, sporty, and is fun to drive (it has a Tiptronic style automatic transmission with a manual shifter). I also got a full warranty, and a guarantee that the car had not been subjected to the ravages of flood waters. In that post-Katrina environment, that was a very big deal.
I made the deal, not the dealership. I will write a more detailed article about this later, but basically, I went into the dealership and told them the deal I wanted, how much I would pay, what I wanted for my trade-in, and gave them the option of accepting or not. To be honest, the deal was good for all parties.
For my situation at the time, buying new was the best choice for me. If I were in the same situation again, I would make the same decision. Now though, there is no premium on used cars and there aren’t as many flood damaged cars on the market, so my decision would probably be different. But I do not regret my decision. I have had this car for 2 years now, and I expect that I will have it for quite a few more.
photo credit: Michal Zacharzewski, SXC.