September 21, 2004
Creative Number Crunching...
Normally, people determine how well an investment works out by percentages. Take resale value for example. A high resale value car (re: MINI) is usually considered a better buy than a low resale value care (re: Malibu). Not so says someone who likes to juggle numbers.
The long and the sort of it is that:
If that's the way you want to look at it, yes, a cheaper car with a bad resale value is desirable. But you've still lost a greater PERCENTAGE of your money, therefore, lost more in the grand scheme of things, which is really the point of the resale value number.
Of course, why would you expect anything other than short term thinking from someone who would write something like this:
Am I sensing a reverse elitist attitude there?
Erik...
Do the math: Lower resale saves you more
BY JEFF BROWN
The dreaded moment is inevitable: Old Reliable just isn't so reliable anymore, so you banish it to the netherworld of the used-car market.
Having discovered your old vehicle was worth next to nothing, you vow to do better. This time you should look for a new car that will hold its value.
Or should you? Maybe the best deal is a car WITH lousy resale value.
The long and the sort of it is that:
Buy a $50,000 car with high resale value and after five years you'll have lost $25,000. Buy a $25,000 car that loses 65 percent of its value, and you'll lose just $16,250.
If that's the way you want to look at it, yes, a cheaper car with a bad resale value is desirable. But you've still lost a greater PERCENTAGE of your money, therefore, lost more in the grand scheme of things, which is really the point of the resale value number.
Of course, why would you expect anything other than short term thinking from someone who would write something like this:
The Mini Cooper is the cheapest, at about $25,000. But that's a lot for a car so teensy you'd need two to get the groceries home.
Am I sensing a reverse elitist attitude there?
Erik...
Comments:
Post a Comment
