Used Car Value
More so than ever before, today’s car buyers are empowering themselves to make choices that are best suited to the unique demands of their lifestyles. This means more than just enjoying the diverse offerings being served up by automakers; it means being able to explore all buying options with far more confidence than had been allowed in the past.
To the first point, current model year offerings represent some of the most well-realized and diverse line-ups ever served up. Truly offering ‘something for everyone’, there is value to be found in nearly every car, crossover, SUV or truck. But such value is not exclusive to new vehicles. In fact, 2018 models only build upon the momentum that has already been established by earlier model years. With this in mind, it’s more worthwhile than ever to consider used car values when deciding to purchase a vehicle.
This speaks to the second point and the importance of exploring all buying options that are available to you. Gone are the days where buying used implied an inability to afford buying new. There are any number of reasons why more people than ever are choosing to buy pre-owned vehicles; let’s explore some of them further to help you decide if buying pre-owned is the right choice for you.
Consider for a moment that automakers release approximately 350 new models into the marketplace each year. While this may seem like ample variety, and possibly even ‘too many’ vehicles to choose from, the number dwindles once you factor budget and vehicle style into consideration.
By considering pre-owned vehicles, you expand this selection exponentially. For example, opening your search to include vehicles over the past three model years results in over 1,000 vehicles to choose from. More than just a wider selection of make and model, it also expands your choices in terms of available trim levels (and yes, even colors).
Understanding that many car buyers are hesitant to buy a pre-owned vehicle, it’s important to separate the stigma of the past from the reality of the present. Whether you refer to them as ‘pre-owned’ or ‘used’ is beside the point, most people equate years and mileage with a decrease in long-term reliability.
The simple truth is that more vehicles than ever are lasting well over 250,000 miles. Whether you credit engineering, superior maintenance or a combination of the two, the simple truth is that vehicles are lasting longer than ever. In fact, recent studies show that many extended vehicle life is prompting drivers to hold onto their vehicles longer than ever (up to 11 years or more, in many cases).
Transparency & Vehicle History Reports
There is, of course, the understandable concern re: previous ownership. Was the vehicle well-maintained? Had it sustained any significant damage or endured any major repairs? While many of these questions went unanswered in years past, the increased prevalence of Vehicle History Reports (such as CarFAX) has whittled much of that concern away.
Such reports rely on the accuracy of reported data, but still, provide far more assurance and transparency that had been offered to yesterday’s car buyers. The fact that they are becoming more standardized over time means that many reputable dealers make them available (often free of cost) for each and every vehicle in their online inventory. This means that you can explore a vehicle history before you ever decide to schedule a test drive or run the numbers to see if it fits your budget.
Possibly the greatest attribute of buying pre-owned is that you empower yourself to get more car for your money. Most vehicles lose the majority of their value within the first 3-5 years, meaning that the original owner usually shoulders the lion’s share of the vehicle’s depreciation.
Consider a new vehicle, priced to sell at $30,000. Do you realize that the vehicle loses approximately 11% of its value before the rear wheels hit the street? Fast-forward a year, and it’s now valued 25% lower than what you had bought it for. Three years, and it’s valued 46% lower on average. Five years, and it may have decreased as much as 63%.
By purchasing a vehicle pre-owned, you are able to purchase a vehicle at a lower price, and the slower rate of depreciation means a better return on your investment. Plus, the lower price means that you might be able to afford a higher trim level, or features that would have been outside your budget had you attempted to buy the vehicle new.
Another benefit to purchasing a pre-owned vehicle is the likelihood that you’ll pay less to ensure the vehicle and to register it. While the extent of these benefits might differ from state-to-state, they are well worth exploring.
And finally (at least for this list) is another buying option that is well-deserving of your consideration: Certified Pre-Owned (CPO) programs.
These days, most every automaker offers such a program which differentiates certain pre-owned vehicles based on their ability to meet preferred criteria. This includes (but is not limited to) limitation in age and mileage, ‘clean’ vehicle history, and the ability to pass a rigorous inspection to ensure that it meets factory standards.
In return, you gain manufacturer-backed extended warranties, a scheduled maintenance program, and often a number of additional perks. By choosing a CPO vehicle, you are able to enjoy some of the savings of buying pre-owned, but gain added assurance as to the quality, reliability and long-term dependability of the vehicle.
Why Buy Used?
One could argue that it makes more sense to ask ‘why not’? Pre-owned vehicles come with a number of benefits that could have significant impact on your finances, and the return on your investment. Perform your due diligence, buy from a reputable dealer, and you might find that a pre-owned vehicle is the right one for you.