Welcome to Radical Personal Finance, a show dedicated to providing you with the knowledge

skills, insight, and encouragement you need to live a rich and meaningful life now, while

building a plan for financial freedom in 10 years or less.

My name is Joshua Sheetz, I'm your host, and today we continue our series on How to Buy

a Car.

This is episode 4 in that series, and today we're going to talk about deciding if you should

buy a new car or a used car.

First episode in the series was decide whether you should buy a car or not.

Second was decide what kind of car you should buy, third was decide how much you should

spend on a car, and then today we're going to talk about buying a new car versus a used

car.

Now let's begin with the obvious bit of advice.

If you agree with the analysis in the previous episode that you should, if you care about

wealth, limit the amount of money that you expose to things that go down in value.

And the numbers that I discussed in the previous episode might make your decision for you,

might make it very obvious.

The previous episode I encouraged you to set a budget for about 10% of your household

income to be spent on a car.

So if you just go with that rule, that will quickly get you to wealth.

I talked about it can go higher, perhaps as high as 50%.

But let's start with a 10% number.

If you're going to budget 10% of your annual income towards the purchase price of a car,

...