Updated: 9/8/2010 9:00 AM ET|
10 things you shouldn't buy new
Why waste money on shiny packaging and a fancy store when you can find it online and 'pre-owned' for a fraction of the cost? Here are your best buys.
Few people really enjoy wasting their hard-earned money, but many of us do it every day by buying new. We could do our pocketbooks, and the environment, a big favor by opting to be the second owner of some of the stuff we buy.
Obviously, some things are best purchased new; lingerie pops to mind. But lots of other stuff depreciates quickly while still having plenty of useable life left. Here are 10 items where the cost vs. use equation strongly tilts toward buying used.
Books, books, books
Now this is awkward, because I wrote a book. (Warning! Shameless plug ahead!) It's called "Your Credit Score: How to Fix, Improve and Protect the 3-Digit Number that Shapes Your Financial Future," and of course, I'd love for you to go out and purchase a new copy. (End of shameless plug.)
But the reality is that most books don't get read more than once, if that, and they're astonishingly easy to find used at steep discounts -- if not absolutely free.
Your local library, for example, may allow you to reserve titles online and then deliver them to your nearest branch for pick-up. Used book stores abound, both in your town and online. If you're looking for a potboiler to get you through your next cross-country flight, just stop by almost any yard sale and pick up four for $1.
Exception: Reference books you'll use again and again. For example, I bought a deeply discounted copy of Cheryl Mendelson's excellent "Home Comforts." That was after checking out the book at the library and running up a small fortune in fines because I couldn't bear to part with it.
DVDs and CDs
Some online retailers, like Amazon.com, now surface used versions of many of the DVD movies they sell new. You can find similar deals for online CDs (yes, Virginia, some of us dinosaurs still buy CDs). Other good hunting grounds for purchase of used items: movie rental chains, used record stores and yard sales.
Exception: When you simply must have the latest release by your favorite singer/director/actor, right now. It can take a few days or weeks for the used versions to show up, and perhaps a few months for the price to get discounted enough to compensate for the greater hassle you might face trying to return a defective or unsatisfactory purchase.
Little kids' toys
Parents know: it's all but impossible to predict which toy will be a hit and which will lie forlorn at the bottom of the toy box. So rather than gamble at full price, cruise consignment shops and yard sales for bargains.
Better than cheap, though, is free. Some parents set up regular toy-swapping meets, or you might be lucky enough to score hand-me-downs from friends and relatives.
Exception: Some parents get away with giving used toys for birthdays and holidays, but most of us (and our kids) have been fairly well brainwashed into believing that gifts should be purchased new. Try to opt, though, for classics, like sturdy wooden toys.
Fat markups on most gems (100% or more is fairly common) means that you'd be lucky to get one-third of what you paid at a retail store, should you ever need to sell.
So let somebody else get socked with that depreciation. Find a pawn shop that's been in business for a while, get to know the owner and ask him or her for recommendations. Some readers have had good results buying via newspaper ads and Craigslist, but I'd want to take the piece to a jeweler for an appraisal first.
Exception: You want something custom-made. Even then, consider buying used stones and getting them reset.
We may buy everything from badminton rackets to weight sets fully intending to wear them out, but too often they wind up collecting dust. Buy someone else's good intention and you'll save some bucks.
Happy hunting grounds: yard sales, newspaper and online ads, resale stores like Play It Again Sports.
Exception: Shoes, baseball mitts and anything else that molds to the wearer's body. In addition, some people shun buying anything used if it has a motor, like a treadmill. They worry they won't get enough use out of the piece before it dies. Given how little work most such devices see before they're sold, though, you might want to take the chance.
You could call these a notoriously lousy investment if you could call them an investment at all, but you can't -- because what real investment is guaranteed to lose 30% to 70% right off the bat?
That is, unless you buy used. There is always a huge number of folks who caved in to three hours of hard sell and are now desperate to dump their shares.
Exception: Some of the higher-end properties in exclusive resorts don't lose much value, and may offer benefits like frequent-flyer miles that could be worth the extra money if you buy from the developer. Before you buy, though, check resale values online; don't take an agent's word for how much depreciation to expect. Also, a relatively new type of expensive time share, called a fractional interest, may actually gain in value over time.
The average new car loses more than 12% of its value in the first year, according to Edmunds.com; on a $25,000 car, that's $3,000, or $250 a month. Some cars depreciate even faster, depending on demand, incentives offered and other factors.
Why not let someone else take that hit? Not only will you be able to save money (or buy more car), but you'll also pay less for insurance. Cars are better-built and last longer than ever before, which means you're less likely to get a lemon. Companies like CarFax allow you to trace a car's history. Many late-model used cars are still under warranty, and a trusted mechanic can give your potential purchase the once-over to spot any problems. Take a look at the Used Car Research section of MSN Autos for a lot of great information.
Exception: You can pay cash and you really, really want that new-car smell.
Software and console games
Buy used, and you'll pay half or less what the software cost new. Console games like those for the Xbox 360, Nintendo Wii and Sony PlayStation 3 that list for $60 new, for instance, can often be purchased used for $30 or less a year after release.
But it's more than just a matter of economy. Letting someone else be the early adopter also allows you to benefit from their experience. You'll find more reviews and information on software that's been out a year or more (and you won't be that far behind the leading edge). The bugs will have been identified, along with any workarounds, although you may have to live with some problems that are fixed in later versions.
Exception: If you do a lot of work with graphics, multimedia or image editing and you have a newer, more powerful computer, you'll probably want the state-of-the-art version. Finally, some software restricts the number of computers on which it can be installed, which can make it difficult (but not impossible) to transfer the product license to a new owner.
Built to take a beating and last a lifetime, good-quality office desks, filing cabinets and credenzas are relatively easy to find even when a recession isn't cratering the local economy.
Exception: Some people balk at buying used chairs for the same reason they won't buy a used catcher's mitt -- it's had too many hours to mold to someone else's body.
Well-made tools with few or no moving parts -- like hammers, wrenches, shovels, hoes, etc. -- can last decades with proper maintenance and are relatively easy to find at yard sales. If you're not going to use a tool frequently, you may be able to rent it or borrow from a friend or neighbor rather than buying something else to clutter up your garage. (Some neighborhoods even run tool-sharing cooperatives.)
Exception: You're a hard-core do-it-yourselfer and you need power tools, especially cordless versions. These have a relatively limited life span and you may not know how much time they've got left. If the tool is cheap enough, of course, that may not matter, but most often you'll want to buy new if the power tool will get substantial use.
Liz Weston is the Web's most-read personal-finance writer. She is the author of several books, most recently "The 10 Commandments of Money: Survive and Thrive in the New Economy" (find it on Bing). Weston's award-winning columns appear every Monday and Thursday, exclusively on MSN Money. Join the conversation and send in your financial questions on Liz Weston's Facebook fan page.
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1) I will never argue about the sharp fall in resale of a new car once the back bumper leaves the lot. However, as a once believer in never buying a new car, I was converted by several used lemons in a row. It did not matter that the cars were looked at by a real mechanic, or that the dealers were legitimate long time standing with good reputations, or that the vehicles received good ratings by consumer watch-dogs. I bought someone else's problems and felt it in the wallet and in the frustration derived of many types of mechanical and electrical failures. I feel the peace of mind that comes with a new car, replacement auto insurance and a new warranty are better for my health in the long the run, than a few thousand dollars.
2) Due to the publisher's Intellectual and/or Digital Rights and/or Terms of Service, a buyer has to be seriously careful about buying used software. It may not even be legal for one person to sell it to another after they have used and registered it. Some PC games can only be installed as few as 3 times ever. After that, you must buy another new copy of the game/software with it's brand new key number. If you are talking operating systems, forget it. Buy it new or use a Linux Distro. The small "warning of exceptions" in the software paragraphs do not do justice to the consumer.
lol, I have always bought used cars. Any car that is maintained/taken care of properly shouldn't have any major problems.
If the dealer truly is HONEST, then they would take back any lemon. If you wouldn't take it back then that is on you, if the dealer will not take it back, then it is on them and maybe you have a good lawsuit. If your technician/mechanic is thorough and HONEST, they should have warned you about things that would need service soon. As far as vehicle guidelines, they are for reference only. No site can or will guarantee the value or mechanical condition of a used car. That is up to an honest dealer and tech to make sure that you get what you pay for. In certain circumstances you can buy a warranty/guarantee on almost any late model car that is just as good as, if not better than, the factory warranty.
I won't take the hit on a new car nor will I deal with the myriad of headaches that come with TSB's ( Technical Service Bulletin ) and recalls. I have never owned a vehicle with a life threatening TSB or recall that would make it to the second/third owner. (And if you were worried about it, a quick vin check would reveal whether or not it had any and if it was taken care of. If it wasn't for some reason, that is simple, don't buy it or make your purchase contingent on the fix.) My mother in law hit a telephone pole in her new Toyota when she had problems with the throttle sticking, how's that for "peace of mind".
I have bought several used cars that were still under factory warranty. That warranty is just as good on a two year old car as a brand new one and if I was still worried, I could have bought another warranty after the factory one expired. Add in cost of ownership and it is a whole new game.
My taxes/tags on my 2000 Durango was only 120 dollars this year. The truck is paid off and my insurance is a lot cheaper on a ten year old truck as compared to the new 2012 model. (The 2012 would require payments every month and full coverage, plus taxes and tags would eat into the value even more. Last time I checked, around this area the taxes/tags on a new Durango was around three to four grand depending on trim level. The lowest trim level, the Express, starts at $29,195. The highest trim level, the Citadel, starts at $42,020.)
So yeah, you are losing a lot more than a "few thousand dollars" on a new vehicle and you don't actually get any more peace of mind than you would if you were buying a quality used vehicle. In some instances it could actually be worse to buy new, ask my mother in law.
I would say that this article is pretty good but most of this stuff is just common sense and/or irrelevant as it is based on personal preferences.
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