1) Don’t buy something new to replace anything that is not broken or worn out. For example, I would like to get a new big-screen television set for the den. However, my current television set in the den works just great. Solution? Don’t replace the tv; save money.
2) Once your current Cadillac is paid off, save up for your next Cadillac while you enjoy the current one. Don’t stop your car payments just because the Cadillac is paid off. Keep making your car payments, but into a savings account. Then you can use these funds to buy the next Cadillac.
3) Let someone else buy the depreciation, and you keep the Cadillac.
I purchased a new Cadillac CTS in 2004. 16 months later, in 2005, I traded my 2004 model for a new 2005 model. I loved having the new cars, but that was a financial disaster. I not only lost the steep depreciation on the first year and a half of the 04, I turned around and repeated it for the first year and a half of the 2005. Cars depreciate. They depreciate in a steep curve that gradually shallows.
In other words, the first year of depreciation might be $12K, the second year $5K, then following years $4K, $3K, $3K, $3K, etc. So if you MISS the first year or two of depreciation, the Cadillac costs YOU less money.
At 50K miles on it right now, my CTS still has a new car smell. That is thanks to Cadillac’s extensive work in new car smell technology (no kidding). The leather is designed to smell new for a long time. So the big thing you miss out on by not buying your Cadillac new is the first year’s depreciation.
Leasing is a terrible way to buy a car and guarantees that you will ALWAYS pay the huge initial depreciation. Leasing is the most expensive way to rent a car.
4) Shop from a private seller for a vehicle with 1-2 years (past the early steep depreciation) and under 12K (1 year) or 24K (2 years) miles. Note that at this point the Cadillac is still under the 4 year, 50K mile bumper to bumper warranty. Used cars at the dealer come from private sellers. The dealer buys the used Cadillacs, or takes them in trade, and then marks them up to what the market will bear. By dealing directly with a private seller, you can avoid the dealer markup. This can mean a significant savings.
5) Cadillac Certified Pre-owned vehicles can be a terrific value. They come with a bumper to bumper warranty out to 6 years and 100K miles. The Dealer is the best ever negotiator with owners and often gets Cadillacs for shocking prices in trade-in (one reason to sell your Cadillac privately when you are ready for a new one). You may be able to in turn negotiate a very good price for a great Certified Pre-owned Cadillac. Definitely however test the water and compare the market pricing from 4) Private sellers before you write a check for a certified pre-owned Cadillac.
6) Keep your Cadillac under Warranty Mr Goodwrench is a terrific mechanic. He/she have access to all the latest tools, the latest technical bulletins and advice from the factory, and are trained in the latest repair techniques. You WANT the dealer service department to repair your vehicle. But hey, Mr. Goodwrench also costs $90/hour and charges full book hours for customer pay. So how can I afford that? Keep the Cadillac under warranty. Problem with the car? Drop it off, get a rental, and get on to the beach or work or the mall or whatever. No worries, pick it up when they fix it. Cadillac are terrifically reliable these days, but the warranty is there for when you DO run into mechanical issues. So you can enjoy your Cadillac for up to 100K miles knowing Mr. Goodwrench is on call.
7) Pay cash for your next Cadillac. How much does a 0% interest, 6 year car loan cost? You might think 0% means $0. However, if you pay cash for the Cadillac, the Dealer as an alternate to 0% interest often offers $3K or $5K of additional savings off the sticker price. So how much did the 0% interest loan cost you? $3-$5K by my book.
Hey! How can I afford to pay cash for my next Cadillac? A) Drive your current Cadillac; after you get it paid off, keep driving it and keep making the payments. B) Buy a nice used model to replace it — this can save you $12K-20K off the price of a new Cadillac.
