Is it Better Value to Buy a New or Used Car?
Buying a used vehicle can provide a great value to drivers, especially at a time when inflation rates in the U.S. are high. Buying a used car means lower sticker prices and insurance rates, as well as slower depreciation in value. In the third quarter of 2021, the average monthly payment for a new vehicle was $609, while the average monthly payments for used vehicles were around $465. Used vehicles also come with lower fees and sales tax at dealerships, however, fees vary from state to state.What’s the Best Age for Purchasing a Used Car?
If you are looking for a relatively new used vehicle, a 2-3-year-old model will provide modern features with big savings. A new vehicle’s value depreciates quickly, losing 9-11% of its value after it’s driven off the lot and an average of 20% depreciation after a year. A new car’s value depreciates an additional 15-25% over the next five years, slowing down after that. With these rates, you can find used cars with relatively new features at two-thirds or close to half the price of the original cost by waiting 2-3 years to buy. If modern features aren’t a priority, used vehicles originally owned for five years or more can be less than half of the original price.
Is there Less Depreciation When Purchasing a Used Car?
Used vehicles depreciate in value much slower than new vehicles. Most of the accelerated depreciation listed above will happen before a car is resold. Given the immediate and marked depreciation of a new vehicle, drivers can save a significant amount by buying a vehicle that’s been owned for under a year. With each additional year, consumers see lower sticker prices and depreciation rates. On average, a used car loses 15-20% of its value each year.
Are Used Cars Reliable?
Modern vehicles are proving to be reliable as they age, but using scrutiny when looking for used cars will help to avoid unnecessary maintenance costs. Average annual repair costs for a five-year-old vehicle are around $350, while a ten-year-old car’s average yearly maintenance is just under $600. Major repairs average about every three years for a five-year-old car and every 18-20 months for a 10-year-old car. All of Subaru’s Certified Pre-Owned vehicles go through a rigorous 152-point vehicle safety inspection, and include a CARFAX Vehicle History report, giving you the most reliable vehicle possible. Every Subaru Certified Pre-Owned vehicle is also backed with a 7 year/100,000-mile powertrain coverage plan and 24/7 roadside assistance.
What is the Sweet Spot for Buying a Used Car?
Depending on your priorities, you may wait more or less than the next person to buy a used vehicle, but the sweet spot tends to sit between 2-5 years. If you are looking for more advanced, modern features at a significant discount, buying a used car that is 2-3 years old can mean a price around 50-70% of the original cost. If the newer features aren’t as big a priority, waiting five years can mean 40% of the original price, without significant maintenance costs.
Rafferty Subaru has Certified Pre-owned Vehicles
From lower sticker prices to lower insurance and depreciation rates, buying used vehicles can save you big, while providing a dependable ride. Subaru gives their customers the best possible value for a used car with their Certified Pre-Owned vehicles. Buying a Certified Pre-Owned Subaru comes with the peace of mind that your vehicle has been thoroughly inspected and repaired to its optimal condition. The included roadside assistance and powertrain coverage provide further security to your investment in a used vehicle. Stop by Rafferty Subaru to check out the current inventory of Certified Pre-Owned Subarus and take one for a test drive today!
