Cars don't appreciate unless they fall under the classics category, and the time frame involved is decades. Who's going to hang on to a car for 60 years in case its the next 57 Chevy?
No longer the case. After cash for clunkers, the used market is much more expensive than it used to be. If you're looking at reliable brands like Toyota/Honda a two-three year old (ex-lease?) model isn't even 20% off, and that has 15-20K miles on it.
There's a reason why so many people are buying new, the used market is strange/irrational for some brands. And new vehicle incentives/lower APR loans/safety features etc make it a hard call.
People should go check out a no-negotiation dealership (e.g. Carmax). You'll be surprised at current used prices compared to new.
I work in the used car industry and across the board (on average) used cars depreciate at about 1.5% to 2% per month! Some are slightly better and some are worse, but the vast majority depreciate in that range.
I am shopping for cars right now, I'm talking about my current experience with the cost of recently used vehicles (specifically Toyota, Honda, and other reliable brands).
> I work in the used car industry and across the board (on average) used cars depreciate at about 1.5% to 2% per month!
Where can I buy these two year old vehicles that are 48% off? Or a three year old vehicle for 72% off? I'm seriously asking, link me to a 2017 Toyota Highlander Limited for $22K or a 2016 Limited for only $11K...
Locally a 2017 Toyota Highlander Limited is $32K with 65K miles on it. Or $36K with under 20K miles, that's a two year old likely ex-lease vehicle that has a 15% discount, but a higher APR, worse features, higher maintenance costs, diminished warranty, and a lower resale value.
The current used market is highly irrational right now. Your imagined used market where cars are 48% off after only two years sounds fantastic, but that isn't the reality on the ground.
You misunderstand what 2% depreciation means per month.
2 years at 2% would be: 1 - (0.98^24) ends up at 38.4% off, not your 48%.
3 years at 2% would be: 1 - (0.98^36) == 51.6%, not your 72%.
The reason obviously being that 2% off monthly means that the 12th month's 2% is a lower dollar amount that the first month's 2%. This is also intuitively true since a vehicle depreciates more steeply at the beginning and less over time in total dollar terms.
Also I said 1.5 to 2%. At the 1.5% end of the range, a vehicle at 3 years is: 1 - (0.985^36) == 41.9%.
> 3 years at 2% would be: 1 - (0.98^36) == 51.6%, not your 72%.
Can you link me to a 2017 Toyota Highlander Limited for $26K or a 2016 Limited for $21K? Because I cannot find either one.
New figures, old figures, it still doesn't remotely match reality. Used vehicles don't exist at the price points you claim they exist at.
Even at 65K miles, we're talking over $31K. You're off by a huge margin.
You said:
> Your information is out of date.
Pretty sure you have that backwards. If you look at the used market it isn't remotely like what you've claimed twice now.
I've tried two times to buy a used car at Carmax, only to find the same model with the same features for less brand new.
I don't understand this market. Who would ever buy used for more than new?
Usually decades. For example, some early 2000s Ford GTs have appreciated to a multiple of their original selling price
Go price out used cars that are a year or two old and then price out an invoice less holdback purchase on a new car.
They sell at a ~10% discount to new cars. They're a day old and haven't rolled off the lot yet.
https://www.rac.co.uk/drive/advice/buying-and-selling-guides...
The sale transaction to the eventual customer is still recorded on the later date, so tax, etc., shouldn't be affected?
Would be interested in the explanation.
Yes, if you try to trade it in right after you buy it you are going to get bent over, but you could put it on the used market for a couple grand below what you paid and as long as you didn't overpay to begin with it will sell quickly.