Rob Roy is toying with the idea of buying a used car every three years instead...

Rob Roy is toying with the idea of buying a used car every three years instead of leasing or buying a new one. Assuming he can find a one-owner with low miles in good condition, what advantages might he enjoy?

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Expert Solution

Well, I think mr.rob roy is a person who is not interested in spending his money in new car but purchasing a second hand for 3 years is his idea with less kilometeres.

ADVANTAGES:

1. High depreciation on brand new vehicles:

That is if we purchase a car say BMW, from the moment we bought that vehicle out of showroom, it will start depreciating on its value, which is a huge percentage. for example, if we purchase a vehicle for $ x dollars after one month if we go and sell that vehicle, it will be at least depreciated by $ x-25%, which is a huge amount. So for a second hand car buyer has a huge advantage.

2. Amount for tax registration can be saved:

in order to bring a vehicle on road people have to pay road tax which will be around 15%-20% which new buyers has to paid. However, for a second hand purchaser he doesnot want to incur that expense.

3. Less maintainence expense:

Since, mr. roy is holding the vehicle for 3years, he most of the time doesnot want to incur very high repair cost.

4 Resale value:

if he is maintaining the vehicle in good condition after 3years then he is most likely to get a good resale for his vehicle.

jeff jeffy answered 1 year ago

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