A motor vehicle could be the second-biggest expense an individual would ever incur after a house. So a brand-new car purchase should be carefully studied especially if it is bought on financing, which actually increases the overall cost of the vehicle.
Also, the reality is that a new car never appreciates in value. In fact, some 10% of its value immediately goes out of the window the moment you drive it out of the dealership. And then, after five years or so, its value plunges to between 40% and 60%, and that’s based on its sticker price which does not include financing charges. Factor in financing charges and the value of a vehicle would be the equivalent of just 25% to 40% of its sticker price after said period.