Used Cars In High Demand
Used vehicles are in high demand and are increasing in value. This is bad news for buyers on a budget looking for a good deal but a good trend for sellers that may make a little more money than they expected to.
According to IHS Automotive, Americans are holding on to their cars longer than they have before. During the recession years, Americans bought 40 percent fewer new cars and purchased used vehicles instead. The average ownership for a new car 6.5 years and the average ownership for a used car is not far behind at 5.3 years. This trend reduced the amount of used cars available to purchase and has increased the price of the ones that are available.
Used cars can save buyers thousands of dollars. New cars lose about 15 to 20 percent of their value as soon as they leave the car dealership. The depreciation rate is never that steep again because cars are made to last longer than 100,000 miles. Buying a car that is only a year old can help save at least 15 percent right off the bat.
A used car can also mean lower registration fees since most states price their fees based on a car’s value and model year. Depending on the age of the used vehicle, it may still be covered under a manufacturer’s warranty that is able to be transferred. This means the cost of certain repairs will be reduced or eliminated.
If you are looking for a used car but want a little more protection, a certified pre-owned dealership may be a good option as well. A certified pre-owned vehicle must pass a multi point inspection that checks different systems for needed repairs. However, a certified pre-owned car is usually more expensive than a regular used car with similar mileage.
According to Edmunds, the average age for a used car in 2016 was 4.1 years and had a record price tag of $19,989. The price of an auto insurance policy for a used vehicle may also not be as economical because of its new, increased value.
Before buying a used vehicle, make sure to have an inspected done by an independent mechanic. Be sure to request a history report from companies like AutoCheck and CarFax and run the VIN at safercar.gov to check if the car is involved in any recalls.