Would you like to be $5,000 to $50,000 richer by this time next year? It might be as simple as thinking "pre-owned" rather than new. Here's a list of things you should never buy new -- see if you can add to it.
Robert Harbison/The Christian Science Monitor
We recently shared a list of 20 things you should never buy used. Because it’s often true: You get what you pay for. When it comes to safety, hygiene, and warranties, there’s no substitute for buying some things new.
But for the most part, you can save a lot of money without sacrificing quality by purchasing many things used. In fact, it can change your life.
The biggest way to save on car ownership is to avoid paying the sticker price. A properly maintained year-old vehicle looks and functions like a new car – but costs 20 percent less. If you can save just $4,000 by buying used, then earn 10 percent on it for 20 years, you’ll be $26,000 ahead. And if you can avoid interest by paying cash rather than financing your ride, you’ll be richer still.
You can find a reliable used car for $5,000. The older the car the greater the risk, but having a car inspected by a mechanic can reduce it. The important thing when it comes to cars: Ignore the commercials. Cars are transportation, not status symbols.
With new homes, you don’t have to worry about repairs. But even factoring in fix-up costs – which you’ll know prior to purchase because you’ve had a professional inspection done – a pre-owned house will normally save thousands over new.
According to the latest data from the National Association of Home Builders, the average price for a new home in April ($282,600) was about 25 percent higher than the average price for an existing home ($226,400). Save $50,000 by buying used and you’ll have a lower mortgage payment, freeing up cash to do other more important things – like saving for retirement.
Pre-owned also means more flexible negotiations and mature landscaping.
The high price of college textbooks makes buying used especially attractive. But you can save even more by checking the library (before your classmates), finding a textbook exchange, or buying an older edition for less. Do some searching and you’ll find lots of ways to get textbooks cheaper, or even free.
Depending on demand and when a new edition is released, you may also be able to recoup much of your cost by reselling them in the right places. Money Talks News writer Ricky Michalski recently bought one of his chemistry texts online for $75 – and resold it for $72 four months later. That means he’s $72 richer than the student who paid full price, then threw that book in a box, never to be read again.
A new timeshare is a terrible buy. Reuters recently reported owners are so desperate to ditch the annual maintenance fees that many timeshares are selling for $1. If you can buy a timeshare for basically nothing, avoiding a developer’s high-pressure sales pitch will make you tens of thousands of dollars richer. Check out articles like How to Buy and Sell Timeshares.
From boats to RVs to bikes, buying used makes sense: They’re terrifically expensive new, they depreciate rapidly, and if someone is selling, they may not have had the free time to use it very much.
Everybody wants to lose weight, but few make the time to do it. That means many people have exercise gear they want to unload cheap or even free on sites like eBay and Freecycle. There are also stores that specialize in used gear, like Play It Again Sports.
Weights can’t go bad, although you’ll want to test things like treadmills and other more complex equipment. As we mentioned in our Best Bought New post, bicycle helmets are one thing you should buy new for safety reasons. But otherwise, why not buy used?
Used furniture from garage sales and consignment stores is often a great bargain – just ask Money Talks News writer Angela Colley, who refurnished her home for under $720. Look around your house and mentally add up the amount you’ve spent on new furniture. Had you bought used, you could easily have saved 50 percent, which means that money would be in your pocket instead of a furniture retailer’s.
Moving sales are great places to save on furniture, since moving furniture is expensive, and sellers have a deadline to dump it. Snap up bargains when college dorms and apartments start emptying in the Spring.
Added bonus of buying used: you might find stuff that’s better built than today’s.
Jewelry depreciates faster than cars. And unlike cars, used jewelry isn’t going to break down, and nobody can tell a ring made this year from one made in 1950. In fact, vintage styles can be highly sought after. Best sources include pawn shops, online at places like eBay, and government and other auctions. Obviously, if you’re buying something expensive, be knowledgeable or enlist the help of someone who is.
Baby stuff doesn’t get much use – they outgrow everything in months. So baby clothes, toys, and nursery furniture can be smart used buys.
But there are definitely used baby items to avoid. Car seats and cribs have safety risks, and everything should be checked for product recalls. If you’re not sure, say no. But if you are, you can easily save 50 percent or more.
Clean out your closet and get a tax deduction by donating the clothes you don’t want to a thrift store. Better yet, take them to a resale shop and make some money. And while you’re there, shop around.
The problem with buying clothes this way – as with many things you buy used – is that it might be hard to find exactly what you’re looking for. But if you’re not in a hurry, buying used can cut your clothing budget by 90 percent. For nicer clothes, head to the thrift and resale stores closest to upscale neighborhoods.
Dishes don’t go bad with time, and buying used can save 80 percent or more. Got a friend getting married? Odds are good they’re going to be getting rid of old stuff to make room for wedding gifts. Thrift shops, yard sales and online sites like Freecycle are also good bets.
Used electronics are a mixed bag: Things a few years old might be obsolete or incompatible with the latest technology, and it’s often hard to tell whether there are hardware issues.
However, buying used a few months after a product’s release (or even getting last year’s model) can be a great way to save. Purchasing from someone you know personally is a good way to avoid lemons, and factory-refurbished items have been professionally examined and repaired, and may even come with a warranty.
Electronics are a great place to save because so many people foolishly feel the need to buy the latest edition of everything. Not being one of those people will make you richer.
These media are a lot like books. Many buy them new, enjoy them once, then toss them on a shelf. If that’s you, recycle your entertainment money and trade them in.
Online-only stores such as Amazon and Newegg sometimes feature sales with new copies cheaper than the used ones at brick-and-mortar stores, so be sure and check. But used prices are typically 10 to 70 percent less than new, with the best deals on the older stuff.
As with electronics, patience pays.
Most people don’t use tools regularly, so it may make sense to borrow or rent them. But well-maintained tools last a long time, and are easy to find at yard sales. It can be hard to tell how much life power tools have left – so only buy them used from people you trust.
Bottom line? You can be thousands of dollars richer simply by letting other people take the depreciation hit that accompanies virtually all consumer purchases. While it’s convenient to go into a local store and walk out with something new, there’s a high price to pay for that convenience. If you can save $10,000 every year by buying used, then compound that money at 10 percent, in 30 years you’ll be $1,809,434 richer than someone who buys the same things new. And what have you sacrificed? Nothing. After all, those new items become used the minute you bring them home.