Vehicle Purchasing

The average American family spent over $8500 on transportation in the most recent year for which data is available. This represents nearly 15 percent of the average family’s income. Our research has uncovered incredible disparities in the costs of owning various vehicles. Making smart transportation decisions by purchasing reliable used cars can save a family an impressive amount of money. Professor Marsh’s car buying formula will save the average family $1000s of dollars per year. We recommend that individuals buy used vehicles (2-3 years old), buy for value (high quality cars that depreciate quickly), and drive what they purchase for at least 10 years. A $25,000 vehicle will depreciate, on average, over $11,000 dollars in the first 3 years of its use. While maintenance costs on used cars are slightly higher than on brand new vehicles, a significant portion of this depreciation can be saved and invested instead. If we conservatively assume that a 25 year will save half of the $11000 depreciation by purchasing a used vehicle, this $5500 savings would be worth over $500,000 dollars at retirement. Use the resources highlighted below to determine how to purchase for value.

  1. The True Cost to Own Calculator lets you choose any model of car (2003-2009) and gives you both cash price and true cost to own estimates. See which car in the class you are shopping within will cost the least. For example, a person looking at Toyota Camry would want to look at Honda Accord and Mitsubishi Galant as well. This tool helps individuals understand the true costs of car ownership over the long term. The calculator even calculates a cost per mile.
  2. is a critical resource for any savvy used car buyer. Use the VIN number to check out the car you are looking at purchasing. Make sure the vehicle you are purchasing is not a wreck.
  3. USA Today Article. This interesting study helps overturn some of the common myths about which vehicles are the most reliable. Use this study to help you shop for value in your auto shopping.