A new car is a significant upfront investment in something that rapidly loses values. The reality is that pre-owned vans and previously used cars offer great value. The minute it leaves the dealership, a new car depreciates in value by as much as 20% and drops off another 10% in the first year, meaning a loss of value of as much as 30% in the first year of ownership.
Most cars on the road are at least 11 years old. In 2015, $33,560 was the estimated average transaction price of a new car or truck sold in the U.S, while pre-owned cars sold for about $16,800 in 2014. Reliable used cars, vans and trucks can cost less than half the price of buying new and often they are just three to four old, much larger than a similar new vehicle and include a variety of value-added features. The key, though, is in finding reliable used vehicles. In the first quarter of 2010, certified vehicles made up 17.7% of franchised dealers? used sales, a figure that climbed to 21.6% in the first quarter of 2015.
Ensuring that you deal with reputable auto dealers and carefully inspect before purchase can prevent nasty surprises later one. With more than 614,400 certified pre-owned sales in the first quarter of 2015, pre-owned vehicles are gaining in popularity and in fact sales of such certified cars are 66.35% stronger than in the same period in 2010. Certified vehicles offer additional protection and give you peace of mind, too. Financially, a car kept for at least 200,000 — milestone reached on average 15 years after first ownership — can yield significant benefit, resulting in savings of $30,000 or more, according to recent research.
The most important part of the used car buying process is to do your homework. Look at similar offerings across a range of lots and of not rush into a purchase without a test drive or two and a thorough inspection. Comparing prices and features across cars and dealerships can not only result in savings, but also show you potential pitfalls to avoid. By investing in pre-owned vans, trucks or cars, you are opting for a cheaper but often more luxurious item.