Used vs New Cars in 2019
If you need to replace a car in 2019, should you buy used or new? The used vs new debate is one that has been around for decades in terms of the basics. New cars take a major hit on depreciation for their first several years. Used cars run the risk of saddling you with higher maintenance and repair costs. But what about the big picture in 2019? What’s happening in the larger auto market that might influence whether you choose used or new? Read on to find out!
One of the biggest things you should consider when debating buying used vs new for your next vehicle is the depreciation angle. When you drive a brand-new vehicle off a dealer’s lot, it immediately loses a full 10% of its value, meaning it’s now already worth less than what you owe on it if you financed your purchase.
To add insult to injury, the new car will then lose at least another 10% of its value over the course of its next 12 months. That’s a grand total of 20% depreciation just in year one! And the new car will continue to lose anywhere from 15-25% of its value for the next several years. Kind of depressing, right? You could be “underwater” or “upside-down” on your car loan for the first four or five years!
What’s Going on With New Car Prices?
CNBC recently ran a story with the headline, “Prepare for sticker shock if you haven’t shopped for a new car lately.” This is because people have been holding onto their new cars longer, on average about six years. If the last time you shopped for a new car was 2013, the average price people were paying back then was $31,434. The average price paid in 2019 as of June was an eye-popping $36,902! What’s driving these price increases?
First of all, all the fancy new technologies that make driving both safer and more pleasurable are driving up costs (and make for more expensive repairs, too). To keep payments reasonable, people are stretching out their car loans to an average of 70 months (nearly 6 years), which also drives up the total cost of a new car (and are also rolling more from their previous loan into the new loan). Part of it also has to do with people buying pricier vehicles to begin with, such as SUVs and trucks.
The Outlook on the Used Car Market
As a used car dealership serving the greater Onedia County area from our location in Rome,NY offers the best advantages when buying used. A major ingredient in our recipe for success is our superior selection. We focus on acquiring more recent makes and models in great shape featuring lower miles. This gives you the double advantage of not only avoiding the big depreciation hit you take when buying new, but also gives you the peace of mind that you’re buying a high-quality car that will serve you well for years to come. Check out our current inventory and see for yourself!