With new cars so expensive and lots of folks nervous about the economy, it makes more sense than ever to buy used.

Spending $21,000 plus on a new set of wheels is a big financial commitment in the best of times. It could be a budget-buster when times are tight.

After all, it takes 22.7 weeks of median family income before taxes to buy a new car in 2001, according to the Auto Affordability Index compiled by Detroit-based Comerica Bank.

Think about that for a minute. That’s five months of salary eaten up by car payments. Is that a wise use of your hard-earned money? Probably not. And can you afford to take a $21,000 chance now that the economy is slowing and job layoffs are making headlines?

Fortunately, you have other auto options, millions in fact. The used car market is overflowing. About 3.3 million cars will be coming off lease in 2001.

“There’s a really good selection of 2- to 4-year-old vehicles out in the marketplace right now,” says Lenny Simms, vice president at
N.A.D.A Appraisal Guides.

Buying a used vehicle can save you a bundle. It all has to do with a vehicle’s depreciation, or decline in value.

The steepest depreciation occurs in an auto’s first two years, when its wholesale value plummets to 60 to 70 percent of its original sticker price. So it’s not long before the value of a new $21,000 car drops by $6,000 to $8,000.

By buying used, you let a car’s first driver deal with that big depreciation nosedive.

“Whether you’re worried about your job or not, that’s a good idea,” says W. James Bragg, author of
Car Buyer’s and Leaser’s Negotiating Bible.

“Nobody needs a new car. It’s never a practical decision to buy a new car.”