Buying used is only the beginning. You'll save thousands on depreciation, finance charges and insurance -- and thousands more by putting what would have been monthly payments to work.

By Jennifer Mulrean

If you're like most people who set out to buy a car, you wander onto a dealer's lot and before you know it you're driving away in a shiny new car with an equally shiny new car loan for an amount somewhere north of $10,000.

But before you plunk down thousands of dollars to buy your next car, ask yourself this question: Would you rather have a brand-new car or a late-model used car and $25,000 in cash?

That's how much you can save by buying a used car instead of the latest model and then investing the money you'd otherwise be paying on a new car loan.

The hidden factor here is depreciation, the steady decline in the resale value of any vehicle that you buy. Take a look at the chart below, and you can see what happens to the value of a typical new car.