As soon as you drive a new vehicle off the dealer’s lot it immediately depreciates twenty percent of its value… This used to lead consumers to conclude that they should buy a used car, but times have changed and the pre-owned market is no longer the obvious choice.
Virtually all new vehicles are now being advertised with significant incentives available such as cash back offers or guaranteed trade allowances. Car manufacturers are offering rebates to the dealers and are making every attempt to increase the sales figures.
The incentives are not just limited to the price, however, and many car dealers actually have liberal financing options available as well. While some of the zero interest vehicle loans are virtually impossible to obtain, many of the auto manufacturers offer other competitive programs that can help bring the total cost of a new vehicle well below that of a used one.
While the purchases of new cars have almost always included warranties in the past, comprehensive programs are becoming more and more competitive and the exclusions are becoming fewer. Many new vehicles are boasting warranties that may actually cover all of the components for five to ten years and up to 100,000 miles or more.
With all of the new incentives and pricing structures that are causing the price of new vehicles to decrease, many consumers are questioning whether a used vehicle is still a wise decision. The used car market has always proven to be profitable for car dealers as there is often much more wiggle room with the price, but the slashing of new car prices has made it more difficult to competitively price used vehicles. The warranties available with a used car purchase are often limited and may not provide coverage for nearly as long as that of a new auto. Many people speculate that the used car market will find it difficult to rebound and that buying new cars may become the norm.
