New car and truck sales have rebounded to levels not seen since before the 2008 recession, making it harder for consumers to haggle over price with their local dealers. The story is a little different, however, if you’re in the market for a late model used vehicle.
According to a recent study by iSeeCars.com, the average price differential between new and slightly used vehicle sold in the U.S. in 2014 was a substantial 17 percent.
The company’s CEO Phong Ly says, “Everybody knows that new cars depreciate the most in the first year and that different cars have different depreciation rates, but we wanted to see which used cars experienced the largest price drops compared to their new models.”
Surprisingly, some of the most sought after luxury cars were on the top-10 list of models with the largest price differences. They include the Hyundai Genesis, Smart for Two, Cadillac CTS, Chevrolet Impala, GMC Yukon, Volvo S80, Mercedes-Benz S-Class, Lincoln MKS, MINI Cooper and Jaguar XK.
The Hyundai Genesis topped the list. A year-old Genesis could be had for $16,600 less than a 2014 model sitting in the dealer’s showroom. The best-selling model on the list is the Chevrolet Impala. The study found frugal consumers who chose a slightly used over a brand new model were able to save an average of $10,000.
Contrary to what most people believe, vehicles that retain their value are not necessarily the ones that hold up the best as the odometer climbs. “There are numerous reasons for the wide range of differences, but the most prominent factors that increase the price difference between a car’s new and lightly used models are lower popularity compared to its competitors, a brand with reported dependability issues or expensive repairs, or having just undergone a redesign,” says Ly.
Some of the vehicles on the top-10 list included models that had been refreshed for 2014, but for others there was very little difference between the brand new and year-old models. Even consumers seeking the latest features and best warranty can save a bundle by opting for a slightly used model.
According to Ly, “Understanding the difference in price between a new car and a slightly used model is a powerful tool for consumers in their decision-making process. It’s often possible to buy a car that is one model year old with low miles and get all the features available in the brand new model, so it makes good sense to seriously consider this option.”
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