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Want a Good Deal? Buy a Three-Year-Old Car

The best overall deal on vehicle? A three-year-old BMW 3-Series.

by on Aug.21, 2018

Edmunds determined that the 2015 BMW 3 Series may be the best bargain, in terms of price, to be had these days.

Looking for a good deal on a new vehicle? Check out midsize cars. Want a great deal on a used vehicle? Check out three-year-old midsize cars.

Midsize cars are waning in popularity as more and more buyers are looking for crossover vehicles, sport-utilities and trucks. In the meantime, automakers are offering plenty of enticements to buy their midsize cars. However, used midsize cars are available with record savings.

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Record savings can be found on used vehicles compared to new, according to the latest Used Car Report from Edmunds. The data reveals that supplies of three-year-old vehicles hit a record-high level in the second quarter of 2018, accounting for nearly one-fourth of all franchise dealer sales. 

As a result, residual values for these vehicles are flattening. Edmunds data shows that in Q2 2018, savings on three-year-old vehicles averaged $13,339 when compared to new, whereas in Q2 2013, savings on three-year-old vehicles averaged $10,632 when compared to new.

A 2015 Chevy Cruze could be one of the best bargains out there now.

(Loss of control, viruses top hurdles for autonomous vehicles. Click Here for the story.)

“The gap between new and used vehicle prices is significantly widening,” said Ivan Drury, Edmunds’ senior manager of industry analysis, in a statement. “Near-new vehicles offer greater savings now than they ever have before, thanks to a constant supply of off-lease vehicles and a shortage of older vehicles in the market.”

Edmunds experts analyzed the difference in average transaction prices between new and three-year-old vehicles to determine overall savings. They found that three-year-old midsize cars provided the biggest break compared new midsize cars with savings of 48%, followed by sports cars and large cars at 45% and 43% respectively. Conversely, three-year-old midsize trucks, luxury large cars and large trucks offer the least amount of savings, averaging 27%, 30% and 33% in savings compared to their new counterparts.

“Luxury midsize cars serve as an example of the used market providing significant savings since these vehicles often have the highest lease penetration rate of any vehicle category,” said Drury.

(Click Here to see more about the Woodward Dream Cruise 2018.)

Hyundai's 2015 Sonata could be had for more than 40% cheaper than new.

“On the other end of the spectrum, midsize trucks is a category that has been invigorated on the new sales front with the resurrection of old models, but leasing has never been popular among these shoppers. And with such limited quantities on the used market, midsize trucks retain high values, making them less appealing from a savings perspective.”

Edmunds went a little deeper in its analysis examining the values of three-year-old vehicles compared with new for the 20 top-selling used vehicles in the United States. It showed the greatest savings can be found on the BMW 3 series, Chevy Malibu, and Chevy Cruze, with savings of 48%, 46% and 45% on 3-year-old versions of these vehicles compared to their new counterparts.

The Toyota RAV4, Honda CR-V and Toyota Corolla offer the least savings, with 3-year-old versions of these vehicles offering 29%, 30%, and 32% in savings compared to new.

(To say goodbye to 17 models going away in 2019, Click Here.)

Edmunds analysts note that they expect these new-versus-used market dynamics to continue in a predictable manner into the near future unless tariff policy changes come into play. “If tariffs are enacted against specific models, these savings figures are bound to change and are certain to test customer loyalty,” said Drury.

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One Response to “Want a Good Deal? Buy a Three-Year-Old Car”

  1. JAE says:

    I actually prefer the 2015-era Cruze styling to the current. Content-wise not sure how it compares to current.