Conventional wisdom says that when a car buyer takes a new car out of a dealership, it immediately loses a quarter of its value, and there is a lot of truth to that.
The prices of used cars, even for those that are only one year old, drop dramatically from the same models bought new.
However, used car prices have risen in the past year.
While there is no single reason for that, cars are made better than two decades ago, last longer, and shoppers looking for bargains can save money.
Another reason for high used car prices is supply.
ISeeCars site executive analyst Karl Brauer commented:
“The used car market is still seeing the effects of plant closures during COVID-19, which has led to higher prices and shorter supplies of in-demand vehicles like pickup trucks.”
The iSeeCars site recently analyzed the sales prices of new and used cars sold between August 2020 and March 2021 in the United States.
The sample size for the study was 2.6 million vehicles in the northern country.
The cars used in the study were used lightly, meaning they were one year old or younger.
The average drop in the value of new cars in the sample to the same slightly used model was 17%.
The price of a lightly used BMW 5 Series fell 36.4% according to the analysis. The 5 Series is BMW’s midsize sedan. Its base price is $ 54,200 in the United States.
However, a Series 5 version costs well over $ 100,000.
Brauer commented on the 5 Series and other high-end sedans:
“These price drops reflect the decline in the popularity of sedans, especially among luxury buyers who have switched to SUVs in recent years.”
The smaller BMW 3 Series model is also among the cars that lose the most value.
These cars turn out to be a bargain for wholesalers who make their fortune by taking them from the border to take them to Mexico, Central America and the Caribbean.
The 15 used cars that lose their value the most:
|Model||Difference in%||Difference in $$|
|BMW 5 Series||36.4%||$24,207|
|Mitsubishi Eclipse Cross||31.6%||$8,041|
|BMW 3 Series||29.7%||$15,266|
|Mitsubishi Mirage G4||29.2%||$4,781|
|Hyundai Santa Fe||28.7%||$9,061|
|GMC Yukon XL||27.8%||$22,639|