Price Gap Between New & Used Narrowing? (vehicle, 2010, SUV)

[Everest209]

I know the old saying you lose value on your new car the minute you drive off the lot. Which is still probably true, but after starting to look at used cars the prices are ridiculous. I know used cars prices are up, but is this going to change anytime soon? It seems you can't get anything under 10,000 that isn't a cobalt or similar vehicle with under 75,000 miles. Is this just a California thing or what's the deal?

I said I'd never buy another new car, but now that used cars are getting more expensive is it worth it for what your giving up in reliability and warranty?

[vegaspilgrim]

Nope-- not just a California thing-- it's an everywhere thing right now. Used cars are a total rip-off these days, especially for desirable models and especially if you're buying it from a dealer. I recently bought a 2007 Honda Accord, "certified used," with 38k miles, for a final sales price of $16,800 plus a $700 dealer handling/title charge (so total pre-tax cost of $17,500), plus sales tax, plus the interest I'll be paying to finance it (though I'll probably have it paid off completely in less than a year). The car is in great condition, and it seemed like a fair deal, but two months later I'm still casually looking at cars and having some pretty severe buyers remorse.

They say a new car loses value as soon as you drive it off the lot-- true-- but same with a used car you purchased from a dealer. KBB private party sales value is $15,800 for my car, so not even counting sales tax my used car was worth $1,700 less than what I paid, just driving off the lot. I called a local Honda dealer just to see what I could get if I traded it in for a new one and they told me $12-13k, so if you believe that number my used car lost $5,000 in value just driving it off the lot. Also, used cars continue to depreciate as well. In fact, Honda Accords at least, once they are 1-2 body styles out of date, depreciate at a faster rate than new/used cars of the contemporary body style. My hunch is that when all is said and done, the total cost of acquiring, owning and operating, and (some day) disposing my car will be exactly the same as the total cost if I bought a similarly equipped brand new car.

I'd say if you're going to buy used, check your local craigslist and hold out until you can find an old but well maintained gem sold by the original owner, private party. Otherwise you may as well just buy brand new.

[Zenstyle]

This past February we bought a '06 Nissan Sentra for $9,300, when all was said and done. (paid cash, of course.)
We got very lucky at the intersection of price/miles; it had just over 55,000 miles on it. . So, it can be done. And no, a Sentra is not a "cobalt or similar."

[Malloric]

Yup, same thing I experienced. Bought the '08 Mazda3 new because the used market was so bad. $15,000 for a four year old Civic with 100,000 miles? Uh. No. When I was in for a recall a few weeks (Mazda/Volkswagen), I was talking with the service adviser and then a salesman about the new Passat. They offered me $13,500 for the Mazda. Not bad considering I paid $18,000 for it, and it's going on 4 years with over 70,000 miles and isn't in the greatest shape.

[Everest209]

Originally Posted by vegaspilgrim

I'd say if you're going to buy used, check your local craigslist and hold out until you can find an old but well maintained gem sold by the original owner, private party.

I know it, talk about a needle in a haystack though....

[TheViking85]

Definitely not a California thing, the car I bought in February now sells for roughly $1000 more despite having about 10k miles added on to it.

...Not that I'm complainin'

[tickyul]

Every since the government SCAM known as cash for clunkers.........well, I have noticed that the price on used vehicles has been going up and up and up.

[00molavi]

It is that people are keeping their cars longer and then cash for clunkers has depleted the used car market. On the new car side the manufacturers are trying to price them competitively and also give incentives. We wanted a Honda CRV or a similar car, I have always bought used. But the best deal I could get was ~18K for a 3 year old base model with ~40K miles. We ended up buying new for around $21,500 and actually got the SE model which has more bells and whistles. It is also easier to get a good deal on new because you just send a request to 10 dealers and try to get the best deal. The cars are the same aside from color.

[josh u]

This is due to a couple of factors:

1. In 2007, automakers sold 17 million passenger vehicles in the US. From 2008 to 2010, the annual average was ~12 million. Since fewer people bought new cars the last 3 years, that means there are fewer used cars available now. And with the economy still in bad shape, people are looking to buy used to save money.

2. Cars made during the last 10 years are just too reliable, so people are able to hold onto them longer (they don't need to buy a new car as often)

[TheViking85]

Originally Posted by tickyul

Every since the government SCAM known as cash for clunkers.........well, I have noticed that the price on used vehicles has been going up and up and up.

There are a few factors in the rising prices, Cash for Clunkers has very little to do with it, cash for clunkers removed some of the cheapest beaters from the market, that's true, but it didn't do much to cars that are in the $5k+ category.

The main reason for increasing car prices is reduced stock (as some mentioned, fewer new car sales a few years back means less used cars on the market now), very competitive prices on new cars and lastly, what had a big impact this year was rising fuel prices.

In TX, prices on used trucks and SUV dropped seriously and fuel savers such as Honda Civics and alike actually increased by over $3k for some time, only to stabilize roughly $1,5-2k above what they sold for a year ago.