It's no surprise that the overwhelming majority of frugal folks I surveyed for my new book, The Cheapskate Next Door, prefer to pocket the savings by buying something that's "previously owned" — but still in good condition — whenever possible. More than 90 percent of the self-described cheapskates I polled said that they favor buying used items over new.
While it can make good financial sense to buy used goods — thereby letting someone else pay for the loss in value when an item magically goes from "new" to "used" — the key is to find items that are used but not abused, as I like to say. Here's some advice on how to find used items that are truly bargains, and when you're better off buying new:
Cars (advantage: used). The smart money is on buying used vehicles and avoiding the notoriously high cost of front-end depreciation. According to Edmunds Inc., a new car can lose up to 20 percent of its value the minute you drive it off the lot and 30 percent of its value the first year you own it. That's a high cost to pay for a few months of enjoying that new-car smell. Check with Consumer Reports for vehicle reliability and resale information before you go used-car shopping. Once you find a vehicle that interests you, order a vehicle history report from a website such as Carfax and consider having a trusted auto mechanic give it a once-over before you buy. Combined, both of those precautions should cost only about $100 and will greatly reduce the chances that you're buying a lemon.
Furniture (advantage: mixed). With the possible exception of upholstered furniture — which can have hard-to-detect damage and possible sanitation issues — used furniture can be an incredible bargain. It might even be free. Keep an eye on the "Free" category on Craigslist.com and Freecycle.org for unwanted furniture, particularly when local colleges let out for the summer and many students give away their dorm furniture. Of course, the best used-furniture buys of all can be antiques or other pieces that will likely increase in value over time.
Home decor (advantage: used). Decorations and accessories for the home are the stuff that yard sales, thrift stores, flea markets and auctions (live and online) are made of. One of my Miser Advisers window-shops regularly at pricey home decor stores in the trendiest parts of town, but window shopping is all she does. "I use it as a chance to get ideas for arranging and combining different items in the home," she says. Then, when it's time to buy, she makes the rounds of yard sales and local thrift stores, where you often need a creative imagination to see the potential in their wares.
Recreational equipment (advantage: used). From recreational vehicles and boats to exercise equipment and even craft supplies, there are terrific values to be had by shopping for used rather than new. That's because people are prone to impulse buying when it comes to spending on hobbies and other pastimes, only to lose interest in their newfound passion a short time later.