Car buyers fall into two different personalities according to an article by Steve Lang. Based on your after-market habits, you are either a “Keeper” or a “Trader”.

Keepers

Many keepers are ready, willing and able to enjoy a vehicle for well over a decade. Keepers believe their car should be a cruising companion until the point where the perceived risk of owning it (usually the cash outlay for major repairs) outweighs the fact that ownership itself (eventually) costs them nothing/virtually nothing.

The key to being a successful keeper: marry genuine quality, not reputation. Say what you will about “import bigots” and “brand loyalty”, but the automotive market is a place where perceived reputation translates into dollars and cents. Toyota’s and Honda’s routinely receive price premiums-even though many of their products fall far short in value and performance as compared to their peers. By the same token, overlooked or unloved models represent an excellent way to keep the hounds of depreciation at bay.

In most cases, car buyers get more bang for their buck (power, features, etc.), lower up-front costs, and lower depreciation costs simply by buying a used example of a less well known/accepted car. Mitsubishi, Subaru, Saturn—there are plenty of brands that sell excellent products that simply fail to capture the public imagination. The fact that these cars take a huge initial hit on depreciation works entirely in your favor, both buying and selling.

For example, if you’re looking at a mid-sized commuter, a 2004 Buick Century or 2004 Oldsmobile Bravada, both of which finished first in J.D. Power’s recent dependability study and received strong ownership ratings, will cost thousands less to purchase than a comparable Camry, Accord or Pilot. Remember: badge snobs must pay for the privilege. (Look for Pontiac Vibe instead of a Toyota Matrix).

Trader

The Trader is a different animal, a shorter time horizon than the Keeper, requiring a different strategy.

To avoid depreciation, Traders are best off buying a carefully vetted five to seven-year-old car of their choice. At that point, depreciation has exacted the majority of its revenge. With due diligence, Traders can get a superb return on their money. The average five-year-old car kept for two years experiences minimal depreciation (20 percent or so). The average seven-year-old car experiences even less, and so on. It’s a simple but highly effective buying pattern.

You already know which brand and model you have your eye on. Just find one with good depreciation built into it. Have everything (money) ready and be ready to move quick.

Whether you’re a Keeper or Trader, remember: a car is an expense. It may excite you or or you may find it to be a daily nuisance, but it is still an expense. By minimizing depreciation you will avoid the single largest cost in the process. With that money you can save the world, buy groceries or save up for your next car.

Much credits for to this post to Steve Lang for this article at http://www.thetruthaboutcars.com/editorials/depreciation-kills/