You probably remember your dad telling you to always buy a used car, because they are so much cheaper than new.
That’s not always the case anymore in this topsy-turvy pandemic year.
“We’ve all heard this: ‘Hey, you lose 20-30% of the car’s value when you drive it off the lot,'” said Karl Brauer of the automotive website ISeeCars.com.
But with used car prices at all-time highs, Brauer said some used cars are so expensive that the new version can be a better deal.
“With some vehicles, right now, the market is such that you are pretty much better buying the new car,” he said.
He cites Tesla as an example. A used version with 10,000 miles on it is valued just 1% less than its brand-new counterparts.
“If it’s 2% cheaper to buy a one-year-old one, why not just buy a brand new one?” he said.
Where New Can Be The Better Deal
According to an ISeeCars.com study, vehicles where new can be a smarter deal include:
- Tesla Model 3
- Jeep Wrangler/Gladiator
- Kia Telluride
- Ford Ranger
- Toyota Tacoma pickup
- Toyota 4 Runner
- Nissan Frontier pickup
In many of those cases (note that all are pickups and SUVs) you may be able to get a brand new vehicle for just $2,800 more than a year-old version.
You also get the full bumper-to-bumper warranty and no spilled french fries under the seats.
The website analyzed more than two million car sales over the past year to come up with their findings.
When Used Is A Better Deal
But before you get too excited, the survey found this is not always the case.
It turns out that some cars still drop sharply in value the day you drive them of the lot, just like they did for Dad years ago.
ISeeCars says many luxury cars still drop 20-30% after a year.
So it suggests you buy a lightly used version if you want a:
- Cadillac XTS or CTS
- Mercedes E Class
- Lincoln MKZ.
Of course, we are talking about vehicles in the $20,000 to $40,000 range (or more) here. If your budget for a car is only $10,000, you will obviously have to buy used.
Although used cars will almost always be cheaper, if there’s not much difference, new could be a better deal, especially because it will come with a longer manufacturer’s warranty.
That way you don’t waste your money.