A few suggestions for avoiding those used car pitfalls:
1) test drive that ride over to your trusted mechanic and pay him to inspect it for you (I’m a big believer in this)
2) get the CarFax (which won’t tell you if they smoked but should tell you if was wrecked), or
3) pay cash for a certified used car at a dealership. You’ll pay that guy’s markup, but should be able to get something close to new that’s been spiffed up with that spray-on new car smell!

Somehow that doesn’t make me feel any safer…but I suspect that would be true whether we had a top-shelf policy or the economy package.

Is your insurance guaranteed renewable? That is, could you be dropped when you need it most?

I know life insurance fairly well, but know very little about health insurance, so I really am curious.

I agree with you 100% on cash vs finance. But sometimes, the new car has other things going for it besides the nice smell and shiny paint (if you got the cash).

The new car doesn’t have the chance that someone:
1. Never changed the oil, drove it like a maniac, and wrecked it.
2. Often took their 4 dogs to the park in the backseat
3. Smoked in the car

OK, those last two do have something do to with the smell!

Also, the new car may benefit from more saftey equipment.

You just have to be willing to pay the depreciation, property taxes, and opportunity costs…Man, that is one nice smell!

The insurance plan (public or private) that pays everything and makes you blissfully unaware of the cost feels nice, but in insulating us from the cost of our consumption, it makes us consume more and pay more.

I think there must be a rational way to think about medical care from a perspective that recognizes it as an economic decision. In other words, there are only so many dollars to go around (in a family budget or a country), so if you buy more of one thing, you must buy less of another. What if the MRI cost $100? What if the MRI cost a trillion dollars? I know we’re talking about human life, but in the end, doesn’t cost enter in to the equation somewhere?

I would love what true competition could bring to medical prices. Hasn’t Lasik come way down in price, precisely because you can’t get insurance to pay for it and so practitioners go out and earn your business? Maybe MRIs could actually cost $100 someday.

And, at the end of the day, aren’t you glad to have the ability to ask your MD what he would do, and have the choice what care to give your son?

1. I understand your thoughts here. I am an advocate for buying cars and keeping them for their entire usable lifetime. But of course if you compare a used car kept for 3 years vs. a new car kept for 10 years you can make the new car seem like a better deal. One might suggest a $5,000 car kept for only six months has a $10,000 annual cost of ownership, but that would be ridiculous.

Cars depreciate 15-20% each year with their greatest rate of loss of value occurring during their first year. Buying a used car that has already depreciated buffers you from that loss. Here’s a great article on depreciation: http://www.bankrate.com/brm/news/auto/20011226a.asp. Letting someone else absorb that loss makes better financial sense.

2. Again, I can see where you are coming from with this suggestion, but it still doesn’t work for me. Are you really suggesting that financing a new car will save you more money than paying cash? Let’s test it.

Imagine that you and I visit a dealer together. You go for a new ‘09 (Honda, of course) and finance $20,000 at 7.5% interest. I opt for the same car, but a used ’08. It’s a program car with 10,000 miles and I pay $18,000 cash for it.

Your loan is for three years. We both keep our cars for three years. The average amount of depreciation for your new car the first year is $4,600 according to online depreciation calculators. That’s because new cars lose on average 15-20% of their value the first year. During the three years, your ’09 Honda will lose $8,873.50. Mine’s already a year old when I buy it, so my first year of ownership it will depreciate only $2,700. I lose a total of $6,945.75 for the three years I own it.

Stay with me.

At the end of the three year period, we both decide to sell. After three years, your ’09 is worth $11,126.5 to you. At 7.5% interest on the loan, you’ve paid a total of $22,396.32.

I’ve still only paid $18,000. Am I any better off?

After three years of depreciation, my ’08 with 10,000 more miles is worth $11,054.25 to me, according to an online depreciation calculator. You paid an extra $4,396.32 for your new car, but at the end of the same three years, yours is only worth $72.25 more than mine! Paying cash for used cars is simply the better way to go, financially.

I realize that not everyone can afford to pay $18,000 cash for a used car. So here’s my solution; save more and buy only what you can afford. If you’ve only got $500, that’ll get you something. I’ve paid that much for a car and I’ve also sold cars for that before. $5,000 will get you a decent amount of car is you shop wisely.

3. Finally, I don’t expect everyone to agree with my last point. But I strongly suggest making quality and reliability the main considerations in choosing a car. And don’t let the car salesman or TV ads be your source of information on what’s a quality product. A little bit of research will save lots of money and headaches down the road.

Most of what passes as health insurance these days is pre-paid health care through an insurance company–with a their profit margin on top.

Perhaps consumers not seeing what they are truly paying because 1) their companies pay all or most of their premiums and 2) their out-of-pocket is rather small have contributed to the rapid increase in health care costs.

2. Pay cash… sure you save the interest rate cost, and you are forced to see the true cost of a car. BUT, to think you are ahead after you pay cash is stupid. A car depreciates, you will lose money every time, paying cash doesn’t help here. However spreading out the cost of a car, makes a lot of sense since they have a useful life over the same period.

3.buy Japanese… it’s an opinion I don’t agree with, but none the less no comment.