Buying a used car is looking better and better to many shoppers.
About $14,000 better on average, according to Experian Automotive and others, as the average new-car transaction price surpasses $37,000 and the typical loan comes in around $31,000.
鈥淣ew cars are getting so expensive that they鈥檙e out of reach for many car shoppers, but there are so many more affordable vehicles 鈥� that the market is shifting in that direction,鈥� said Ivan Drury of Edmunds, an automotive data-analysis company.
But new-vehicle prices aren鈥檛 the only reason for the shift as interest rates for financing has been climbing slower for used vehicles, Edmunds reports.
The increasing availability of certified pre-owned (CPO) vehicles also provides an incentive to buy used.
鈥淏etween more affordable prices, the assurance of an automaker warranty, and lower interest rates, CPO vehicles give car shoppers a way to enjoy many of the benefits of a new car and minimize many of the risks of buying a used car,鈥� Drury said in a recent press release.
Here are the biggest reasons you should be buying a used vehicle:
- Save money on the purchase price 鈥� if you can live without the new-car smell.
- Less sticker shock for shoppers who have not been out looking for six years on average.
- Depreciation is a lot less with a vehicle that is at least three years old.
- Today鈥檚 cars and trucks remain reliable longer, which has contributed to the increasing average age of vehicles on U.S. roads to about 11.6 years (and rising).
- Certified pre-owned programs 鈥� used vehicles which have been reconditioned and provide warranties 鈥� offer 鈥渓ike new鈥� condition with about 2.7 million sold last year.
- Detailed vehicle history reports based on a vehicle identification number (VIN) are available from companies such as Carfax, AutoCheck and VINCheckPro.
- Attractive financing options 鈥� reduced-rate loans 鈥� on many CPO vehicles for qualified buyers.
- Lower insurance rates, because one of the key factors in the cost is the vehicle鈥檚 value.
- You can drive a 鈥渂etter鈥� car than you might be able to afford otherwise.
About 41 million shoppers will buy used vehicles this year, 30 percent from franchise dealers 鈥� including 2.75 million CPO vehicles 鈥� compared to nearly 17 million in new-car sales.
Many 鈥渄iscerning鈥� new-car shoppers are expected to opt for a used vehicle instead of new.
鈥淭he price gap in average monthly payments between new and used vehicles is widening,鈥� one industry insider said recently. 鈥淐onsumers, even those with stellar credit, are doing the math and many will choose to buy used vehicles from new-car dealerships.鈥�
A vehicle shopper doesn鈥檛 have to be a math wizard to figure that out.
