Most people know that new vehicles depreciate in value the moment they leave the car dealership. New vehicles lose about 10 percent of their value initially and depreciate by almost 30 percent on average in their first year. It’s why many car buyers have traditionally opted against buying new cars.
If they can buy a slightly used vehicle for just a fraction of the price of a new one, why not go that route and save a few bucks?
It’s not a bad approach to take, especially if you don’t mind driving a vehicle that has been used for a year or two. However, it sounds like that approach might not always work in 2018. Research website, iSeeCars.com, recently conducted a study that found several pickup trucks and SUVs that aren’t depreciating in value as much as they used to.
For example, a 2018 Jeep Wrangler costs just $3,199—or roughly 9 percent—more than a 2017 Jeep Wrangler. As a result, those who buy a used 2017 Jeep Wrangler as opposed to a 2018 Jeep Wrangler in an effort to save money aren’t getting that good of a deal. Not to mention they’re missing out on the new technology and safety features available in the 2018 model in the process. Of course, this isn’t necessarily the case for all vehicles.
Vehicles like the Toyota 4Runner, Honda Pilot, and Chevrolet Colorado all showed signs of minimal depreciation between their 2017 and 2018 models.
Since there isn’t much of a price difference between the two, it would make sense for people to consider buying these vehicles new rather than used. At the same time, however, there are still many vehicles, including several luxury cars that are depreciating in value as rapidly as ever. For instance, the Cadillac XTS lost more than 38 percent of its value between 2018 and 2017, which would be reason enough to go with a used XTS over a new one if you were in the market.
At the end of the day, buying a used vehicle is usually the better bargain compared to purchasing new. But before you decide to go with a used vehicle over a new one, do your own research to see how much money you’ll actually be saving. You may be surprised to find that buying a new vehicle could be more beneficial than buying a used one—and it might change your outlook on depreciation as a whole when it comes to buying a vehicle.