Do you need a new car?

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One of the greatest misconceptions in the area of personal finance is that when you need a car it has to be a new car. The truth is what you need is a reliable car, and that doesn’t have to be a new one. The average new car payment is roughly $450 each month; that is a lot of money to be putting into an asset that goes down in value every day. I would much rather you get a reliable used car and pay cash for it.

I am on travel this week in Hawaii, and I came across an article at honoluluadvertiser.com that says now is the best time to buy a new car. The best part of the article is the last paragraph:

“If you have a car serving you well, keep it,” advises Champion. If you need to trade, “the best value is a reliable used car two or three years old.”

Now before you say that used cars aren’t reliable, answer this question. When your brand new car is two or three years old, are you going to sell it? Why not?