For those in the market for a replacement vehicle, marching past the new car showroom over to the used car lot is looking more and more like the smarter play, claim some industry experts.
According to Edmunds analysts, a deluge of lightly used, lower-mileage vehicles are coming off lease and filling used car lots. Edmunds experts also note that these used vehicles are not that old, they comprise the styles, i.e. sport-utilities, crossovers and trucks, that new vehicle buyers are after.
They also have many of the technology features that buyers want in their vehicles these days, the group noted.
“Some shoppers have the misconception that used vehicles are these old, beat-up disasters waiting to happen, but that couldn’t be further from the truth in 2019. Used vehicles today actually look a lot like new vehicles,” said Ivan Drury, Edmunds’ senior manager of industry analysis.
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“Limited sales during the recession mean that older cars are scarcer, and thanks to record sales and leasing during the recovery, the typical used vehicle is looking more like a late model-year SUV with low mileage and lots of great features.”
Edmunds Used Vehicle report offers some additional insights about the upside of the used market, including:
- Two out of 3 used cars sold are 4 years old or newer. The average age of a used vehicle dropped to 4.3 years in Q1 2019, compared to 5 years in 2014.
- The proliferation of lower-mileage leases in 2016 has resulted in nearly 300 fewer miles per year on the average vehicle. The average mileage on a used vehicle dipped to 51,349 miles, compared to more than 61,162 five years ago.
- 2019 will be the year that SUVs and trucks dominate the used market. In Q1 2019, SUVs constituted 40% of the used car market compared to 32% in Q1 2014, and trucks constituted 14% of the used car market in Q1 2019 compared to 13% five years ago.
- Popular vehicle technology has proliferated across the spectrum of vehicles in the past decade and an increasing number of features are now available on the used market. For the 2015 model year, Bluetooth was available on nearly 80% of vehicles, compared to just 40% for 2009 model year vehicles. For 2015 model year vehicles, backup cameras were available on more than 50% of used cars, compared to less than 20% for 2009 model year vehicles.
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Edmunds experts note that used vehicle prices are rising as a result of these newer, larger, and more contented used vehicles hitting dealer lots, but thanks to an oversupply of off-lease vehicles and rising new car prices, buying used still reflects significant savings over new alternatives. The average transaction price of a used car in Q1 2019 hit a Q1 record of $20,247, compared to $36,597 for new.
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“Although used car prices are up year-over-year, the gap between new and used continues to widen,” said Drury. “And, now that used cars are starting to mirror new ones in terms of available features, body types and mileage ― all while presenting tremendous savings to shoppers ― used vehicles are a more compelling alternative than they’ve ever been.”