More American Buyers Turning to Used Cars
by Steve Cypher on Monday, March 9th, 2009Information from sources as diverse as BMW and Cars dot Com show that more American buyers are considering and buying used cars
Avoiding the big depreciation hit
Here at Auto Credit Express, we have always felt that buying a pre-owned vehicle is not only a viable option for most car shoppers, it makes financial sense as well.
According to J.D. Power and Associates’ 2008 Vehicle Dependability Study <!– /* Style Definitions */ p.MsoNormal, li.MsoNormal, div.MsoNormal {mso-style-parent:”"; margin:0in; margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:12.0pt; font-family:Arial; mso-fareast-font-family:”Times New Roman”; mso-bidi-font-family:”Times New Roman”;} @page Section1 {size:8.5in 11.0in; margin:1.0in 1.25in 1.0in 1.25in; mso-header-margin:.5in; mso-footer-margin:.5in; mso-paper-source:0;} div.Section1 {page:Section1;} –> ®, long-term vehicle quality improved 5% industry-wide from 2007 to 2008 with more than 60% of the 38 nameplates studied showing improvement. More importantly for most buyers, more than one-half of the overall improvement was in the compact and midsize segment.
David Sargent, vice-president of automotive research at Power had this to say about their most recent study, “The gains in dependability for compact and midsize vehicles are good news for consumers who are downsizing their vehicles due to increasing fuel prices. Consumers who purchase these smaller vehicles benefit not only from immediate gains in fuel economy, but also from improvements in long-term dependability, compared with previous years.”
Not only are used vehicles more reliable, you save money by avoiding the costly depreciation of new cars. According to Consumer Reports, most models will lose about 45% of their value in the first three years as compared to 25% over the following three, although this varies among manufacturers and models.
Buyers turning to used cars
According to a recent cars.com survey released March 9th, 32% of car shoppers who once were considering buying a new vehicle are now looking at used cars, up 5% from a similar survey taken in October of 2008. And while this is a general trend among shoppers, even luxury automaker BMW is seeing increased sales in its certified used car offerings.
According to the German manufacturer, certified pre-owned sales of BMWs is up 24% year over year for the first 2 months of 2009 to 19,000 vehicles and the company is currently on track to best last year’s total sales of 104,000. In 2008, certified pre-owned sales accounted for 25% of dealer vehicle sales.
Not only are pre-owned vehicles more affordable to customers, according to Peter Miles, Executive Vice-President of BMW of North America, they also help “our dealers weather the current economic situation.”
The Bottom Line
Even in these uncertain economic times, it is sometimes difficult to indefinitely put off replacing your current vehicle. If you find yourself in this situation, you might want to expand your horizons by considering a used car, whether it is a certified pre-owned vehicle or simply a solid, dependable used car with a good track record for quality and maintenance. You could end up saving yourself thousands of dollars.
If its in good shape, cheaper than a new one, why not? Times will not be hard forever so eventually one can get a new car. It is also far better than not having a car at all.