Buying a Used Car Can Actually Earn You Thousands of Dollars — Here’s How

Core Insights - Cars are generally depreciating assets, losing value from the moment of purchase, unlike stocks and other investments that appreciate over time [1] - A smart strategy for car purchases involves buying a used car and investing the difference, potentially earning thousands of dollars [2] Financial Analysis - The average price of a new car exceeds $48,000, while opting for a $10,000 used car can lead to significant savings that can accumulate over time [2] - Financing a new car results in a financial loss of approximately $31,000 over five years, considering the depreciation of the asset [5][7] - In contrast, purchasing a used car and investing the monthly payment can lead to a total of about $55,510 after five years, assuming an 8% average annual return [10] Investment Strategy - Instead of investing heavily in a depreciating asset, the strategy focuses on minimizing exposure to depreciation while maximizing investment growth [11] - The initial investment in a used car is lower, allowing for more capital to be allocated to investments that appreciate in value [11]