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Dave Says: Buying Used or New?

by | Nov. 09, 2010

Finances

Dear Dave,

What things do you advise buying used versus buying brand new?

Amy

Dear Amy,

This is a great question. But I’m afraid there’s not one good, across the board answer, because it all depends on where you are in your financial plan.

When it comes to cars, you should always buy good, used vehicles, unless you have a million dollars in the bank. New automobiles drop in value like a rock, so buy smart and let someone else take the hit in depreciation. My advice is to buy used, anyway. Wealthy people don’t become wealthy by investing in things that go the wrong way.

If you’re talking about clothing, and you’re broke or trying to get out of debt, there’s absolutely nothing wrong with shopping consignment stores—especially for kids. They wear things three times, and then they’ve outgrown them. Plus, they still look practically brand new. “Experienced” clothing is a great buy for adults, too.

Of course there are other things, but here’s the deal. As your money situation improves, you’ll be able to buy more new things. The price of “new” will become a smaller and smaller percentage of your financial world. But when you’re broke, deep in debt, or don’t have a big income, any money you spend on anything is a big percentage. At times like this, a $50 washer or dryer on Craigslist can be the best deal on the planet!

—Dave

For more financial advice please visit daveramsey.com.
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