As veteran used-car managers and wholesale price watchers understand, oftentimes luxury units take quite a price tumble during the time the vehicle leaves the factory to when it might end up in a store’s used inventory. It all stems from that critical first year of depreciation.
The team at iSeeCars.com generated some fresh data to reinforce this believe by analyzing more than 6 million new and used models sold from Aug. 1 through Jan. 24, comparing the retail prices.
In the used-vehicle part of the study, iSeeCars.com found eight models had a price difference of at least 30 percent compared to the new-car price. As mentioned, most of these units are luxury sedans, .
“While the peace-of-mind associated with a new car may be worth a few thousand dollars to a consumer, it may not be worth tens of thousands of dollars, as is the case with these cars,” iSeeCars.com chief executive officer Phong Ly said in a news release.
Luxury vehicles dominate this list, with sedans by Cadillac, Mercedes-Benz, Lincoln and INFINITI. The top vehicle on the list, the Cadillac XTS, costs more than $20,000 less when bought used.
“Many luxury cars are leased by individuals or companies for fleet or management use and replaced with newer models, and this turnaround increases the number of used cars in the marketplace, causing a larger drop in price,” Ly said.
The non-luxury cars on the list are the Jeep Compass, Toyota Camry, and Kia Sedona.
“Although Jeeps tend to hold their value well, the Compass received widespread criticism for its performance and its lack of off-roading capabilities characteristic of the Jeep brand, which could partly explain why they’re cheaper to buy lightly used,” Ly said.
“Sales of the Compass and the Sedona were also higher in the last couple of years, so if consumers are dissatisfied with these cars, there may be a larger supply of them on the used car market, driving down used prices,” Ly continued.
“The Camry’s inclusion on this list can be attributed to the 2018 redesign, which updated the powertrain, improved the handling, and added new exterior styling, on top of new safety features. The improvements come at a premium, so when compared with new models one-year-old Camrys are much cheaper,” Ly went on to say.
Used Over New
Used Over New
On the new-car side, the latest study by iSeeCars.com found a few models can be purchased new for as little as $2,885 over the price of the previous year’s lightly-used version.
Site analysts identified nine new models that cost up to just 15 percent more than the gently-used version. When compared with the overall average of 26.8 percent, iSeeCars.com thinks these vehicles may provide better value when purchased new.
“It’s widely understood that new cars tend to lose a large portion of their value shortly after they’re driven off the lot, but these cars retain more of their value over the first year,” Ly said. “Instead of buying a car that’s been driven for one year, consumers can buy the new version for just a few thousand dollars more and take advantage of the latest and greatest technological and safety features.
“When spread out over the length of a car loan at an average of 5.5 years, the slightly increased monthly payments can be offset by the added warranty and dealer incentives,” he continued.
The nine models that have the smallest changes in price are popular models and are almost exclusively pickup trucks and SUVs. The notable exception is the Subaru WRX sports car.
“The WRX is a high-demand vehicle and it had a starring role in the 2017 box office hit ‘Baby Driver’, adding to its appeal,” Ly said.
The top spot went to the Jeep Wrangler Unlimited, while a second Jeep model, the Renegade placed eighth on the list.
“Jeeps are known for retaining their value due to their durability and performance across all terrains,” Ly said. “Strong brand reputation is another key factor to aid in value retention, so it is no surprise that Toyota and Honda each have multiple vehicles on the list.”
|Model||Percentage Difference New Over Used||Dollar Difference New Over Used|
|1||Jeep Wrangler Unlimited||8.9%||$3,199|
In summation, Ly asserted that the data from iSeeCars.com reinforces what dealers might already be seeing in their showroom or at the auction.
“This list reflects the current marketplace as demand for SUVs and pickup trucks are at record highs while demand for passenger cars is steadily declining,” Ly said. “The rising popularity of these car types could be attributed to steady gas prices.
“Whether consumers buy a brand new car or a lightly-used version of the same model depends on how much the new technology, complete lack of wear-and-tear, and the new car smell are worth to them,” Ly continued.
“For some models, these features cost only a few thousand more, while for others they cost tens of thousands more. Consumers should keep these comparisons in mind as they decide whether to buy new or buy used,” he concluded.