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Not-so-used cars result of new-car deals

Great incentives on new cars makes now a better time to buy a used vehicle

By STEPHANIE TWINING

Date published: 12/16/2004

ight now might be the best time to get a quality used car.

Manufacturers are lowering prices daily and offering interest-free loans in order to sell more new cars. Because of these incentives making new cars so affordable, people are trading in their used cars.

Many of the trade-ins local dealerships are seeing are used cars that wouldn't have been traded otherwise.

"These cars have good miles and good equipment," said Paul Carroll, used-car sales manager at Purvis Ford in Fredericksburg. "Maybe cars that would have been traded with 89,000 or 90,000 miles on them people traded in with only 40,000 or 50,000 miles on them."

Jonathan Pittman, used-car sales manager at Radley Chevrolet in Fredericksburg, has seen a similar trend.

"There's no doubt that every time the manufacturer announces a new incentive or rebate plan, it creates more trade-ins for us," he said. "Sixty-four percent of my used-car inventory is now local trade-ins."

With record-setting incentives driving down new-car prices, dealers are cutting used-car prices, too.

"Incentives are reaching historic records," said Jesse Toprak, analyst with edmunds .com, a Web site that evaluates vehicles for shoppers.

In September, Toprak said rebates on new cars reached the highest level ever at an average of $3,100 per vehicle.

The impact on used cars can be seen mostly on newer models, Toprak said.

"If a dealer has '03 and '04 models on the lot and wants to price the '05 models competitively, then he will have to price the '03 model low in order to sell it," he said.

Another reason it's a good time to buy a used car is the rapid depreciation in value new vehicles see when they leave the lot.

New cars lose around 20 percent of their value as soon as you drive them away. After a year or two, a car's value can depreciate up to 35 percent, according to Mark Westall, owner of Autobility in Fredericksburg.

Cars that have depreciated in value will have a low price, but not necessarily low quality.

"People can buy a car that has already seen a 20, 30 or 40 percent depreciation and come out ahead," he said.

Experts also say that while incentives are dragging down the prices on new cars, high numbers of used cars continue to sell.

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Date published: 12/16/2004