Buying a car

Last week I embarked on purchasing another vehicle.  Outside of purchasing a house a car purchase is the single most important purchase the average individual can make.  Some could argue it is the most important since you’re buying cars more frequently than houses.  Not to mention the fact that cars depreciate faster than any other asset you will own.  Unlesss you bought a house during the Bush administration.

I wanted to share my analysis of different vehicles that I have considered buying.  What I did was analyze the average price of each year of the vehicle so that I could figure out what my expected loss would be over a two year period.  I know this is a crude way of doing this.  But it really gives you insight on what to expect on how much value a vehicle will lose over time.

Below are my results based on vehicle in the change of price from one year to the next.  Initially I was considering purchasing the Nissan Armada.  However, you can see from the results below that this vehicle loses its value significantly faster than any of the others that I’ve considered.