Buying a used car saves more money than ever
If you're considering whether to buy a used car instead of a new one, here's some good news. The savings in buying a three-year-old model instead of a new one are at an all-time high.
In a midyear report, automotive site Edmunds.com said buying a three-year-old car can save $13,339 over buying a new version of the same model.
The reason, said Edmunds analysts, is that a constant and large supply of three-year-old cars coming off lease is keeping prices for those cars low even as new-car prices rise steadily. The biggest savings are found in the categories of luxury midsize cars, small cars and large cars, Edmunds found.
Whether an individual category or model offers big savings is all about the leases. "The dynamics of the three-year-old used-vehicle values are primarily dictated by the supplies afforded to the market from leasing," Edmunds said.
Thus savings are highest in categories such as midsize luxury cars where leasing is popular. For example, an off-lease BMW 3 series model sells for an average of $22,884 compared with $48,845 for a new one. That's a savings of $25,961, or 48 percent.
Among mainstream large cars, the Chevrolet Malibu is selling for $14,182 as a three-year-old used car and $26,375 as a new 2018 model. That's a savings of $10,782, or 46 percent.
Finally, among small cars, the Chevrolet Cruze is selling for $12,186 used and $22,319 new. That's a savings of $10,133, or 45 percent.
These used-car trends also reflect the fading of sedans and rising consumer preference for SUVs among used cars as well as new. Two of the smallest savings on used versions are for top-selling compact SUVs: Toyota RAV4 (29 percent savings) and Honda CR-V (30 percent).
In general, most SUVs and pickups show smaller savings of under 40 percent and many under 35 percent.
If you're pondering whether to buy used instead of new, consider this: The savings on a used BMW 3 series alone could almost buy you a new compact SUV. No matter how you would really use that money, that's an SUV-load of savings.