Most people don’t like the word depreciation because it means as soon as you buy something, its value drops. However, if you are a used car buyer looking for great deals, depreciation might be your best friend. The more you know about car depreciation, the better you can leverage it to get a good used car deal.
How Much Can I Save?
As soon as a new car is driven off the lot, it can lose up to 10% of its value. So looking at cars that are just a year old might uncover some spectacular deals. A car that is only a year old, still has its factory warranty in place, and it’s likely in very good shape. You can verify the condition of the car with a qualified vehicle inspection.
A CARCHEX inspection gives you a 155 point report on the condition of any used car in the country. Order a pre-purchase used vehicle inspection from CARCHEX now.
Certain Cars Depreciate Much More Than Others
Luxury cars can depreciate dramatically. For example, a new Jaguar S-Type would have cost you around $60,000. Due to its dated styling this model has fallen out of favor, and you can find some for sale for around $15,000. That’s a 75% savings off the new sticker price.
The Mercedes Benz S Class is also notoriously guilty of depreciating. It can lose up to 80% of its value within 5 years which is great if you are on the buy side.
The 2011 model of the Mercury Grand Marquis can offer savings of up to 80-90% off the new car price. This is because they stopped making the Grand Marquis in 2011, and it had not been updated in years.
Cars that are sold to companies as fleet models can also see a large drop in price over time, since fleets have a high turnover rate. When it comes time to renew the fleet, a huge supply of cars is released into the used car market driving prices down. Some subcompacts from Kia and Hyundai, for example, can be found for incredibly low prices.
Car Condition Is The Key
By identifying cars that depreciate significantly, and by knowing the condition of the car, you can increase your savings even more. Let’s say you are looking to buy a 2009 Ford Taurus, the year before the Taurus got a facelift. Right off the bat you have a model in low demand so the depreciation is likely to be close to 60-70%.
If you find a model with low mileage and in good shape, however, you might score a great deal. This is because the seller has to sell low due to depreciation even if the car is in good condition.
Seal The Deal With A Vehicle Inspection
If you get a used car inspected before you buy, you can be sure that you are getting a good deal. A qualified car inspector knows what to look for, and you can get a written report in your Email within a week. Combine this with depreciation and you can save big.
Published in CARCHEX Vehicle Inspection Resources by CARCHEX on November 11, 2014