In the United States, American consumers purchase an average of 16 million automobiles each year, with an estimated total of 17,767 U.S. car dealerships currently in business. But, a recent trend among American consumers suggests that purchasing used cars may be the way to go. From 2011 to 2012, used car sales in the U.S. were up an estimated 4%, quite possibly due to the recent U.S. economic recession. However, it doesn’t take a recession to justify the benefits of purchasing a vehicle from a used car dealer. According to Jack Nerad, Kelley Blue Book’s executive market analyst, used cars today last a really long time, providing great value due to longer useful lives than used cars from past generations.
If you’re in the market for a vehicle, buying a used car is a great way to save money, compared to purchasing new. Yes, paying a lower purchase price for the same used car model instead of a new model is usually the main reason to buy a used car. But, there are other reasons to purchase used as well. For example, purchasing a new car is typically considered as a poor investment; in fact, it’s not much of an investment at all. New cars typically depreciate about 20% the second they are driven off the lot. After the first year of use, a new car will typically depreciate an added 10%, totaling a 30% loss in value during only the first year of ownership. According to Time Magazine, the average price among new car sales in 2012 was $30,500. Compare that figure, to the average depreciation value among new cars, and you have a total depreciated value of well over $9,000, in just the first year of ownership — by no measure does this depreciated value equate to a smart investment.
The best way to avoid this extreme depreciation among new car sales is to purchase a car that is only 1-3 years used. By doing so, it’s quite possible for the owner to purchase the used car, drive it, and with proper care and routine maintenance, sell it with a limited loss in the car’s equity. However, it’s important for consumers to to understand that not all newer-model used cars are the right buy — some used cars depreciate far less than others. For example, most Nissan used cars manufactured in the last 5 years, are widely considered to be some of the best used cars. This is due to Nissan engines having the ability to run properly after hundreds of thousands of miles. Nissan produces great engines, and the repairs to Nissan cars are infrequent yet affordable when necessary.
So, as long as you pick the “right” used car, chances are you’re making a better investment. When shopping around, check online reviews to ensure the used car dealers that you’re considering are known for reliable and fair service, in addition to providing a wide variety of certified pre-owned (CPO) vehicles. CPO used vehicles receive a rigorous inspection by the vehicle’s manufacturer, ensuring that they are in proper condition, functioning well, ready to sell and drive. You can also finance used cars if you don’t have the available cash upfront for the purchase. Besides that, just pick a car that fits your budget and that you enjoy driving.
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