Buying these Cars Lightly Used, Not New, Saves $6,000-$20,000 based on Study by iSeeCars

Automakers are wooing car buyers with ads for the latest models, but a new study by iSeeCars.com has found that only some cars make good financial sense to buy new due to large differences in price between new and one-year-old used models. The savings from purchasing a lightly used car over a new one can be substantial, ranging from $6,099 to $19,966.

“Most people know new cars depreciate the most in the first year and that different cars have different depreciation rates, but we wanted to determine which used cars experienced the largest price drops compared to their new models,” said Phong Ly, iSeeCars.com CEO.

iSeeCars.com analyzed over 14 million new and used cars sold from August 1, 2015 to July 31, 2016 and found that the average price difference between a new car and a one-year-old used car is 21.2 percent. The results showed that 12 models had price differences between 31.2 percent and 34.6 percent, which are at least 1.5 times greater than the overall average, and would be better values when purchased lightly used rather than brand new.

The Top 12 Cars to Buy Used, Not New 

Rank Model % Price Difference Between New and 1-Year-Old Used $ Price Difference Between New and 1-Year-Old Used
1 FIAT 500L -34.6% -$8,096
2 Lincoln MKS -34.5% -$16,039
3 Volvo S60 -34.4% -$14,204
4 Kia Cadenza -34.3% -$12,940
5 Mercedes C250 -34.3% -$15,247
6 Nissan Maxima -34.0% -$12,469
7 Lincoln MKZ + MKZ Hybrid -33.8% -$14,177
8 Jaguar XF -32.3% -$19,966
9 FIAT 500 -31.9% -$6,099
10 Cadillac -31.8% -$13,351
11 Chrysler 300 -31.7% -$11,525
12 Buick Regal -31.2% -$10,117

 

The cars that experienced the greatest changes in price tended to be those that are less popular, especially luxury brands. The presence of six luxury brands on the list is not surprising – luxury models often lose value initially faster than non-luxury cars.

“Eight of the cars on the list are models that are significantly less popular than their competitors, plus they are in segments that have seen a decline in new car sales lately,” said Phong Ly, iSeeCars.com CEO. “For example, the compact luxury segment has seen an overall decline, but the Volvo S60, which was not a strong seller to begin with, has been hit harder than competitors such as the BMW 3 Series or the Audi A4. In addition, Fiat and Chrysler have been faced with dependability issues, further lessening their appeal.”

One surprise on the list is the Nissan Maxima, which has typically been widely popular with buyers. Ly explained, “The 2014 Maxima was the last model of its generation, and the redesign had been delayed a full model year. As a result, the 2014 model lagged beyond the competition in terms of technology and styling, decreasing consumer interest.”

While these cars may be less popular overall, most have 4- to 5-star safety ratings from NHTSA (National Highway Traffic Safety Administration). “For example, the 2015 Cadillac ATS and Volvo S60 both received 5-star ratings across the board, so consumers who are genuinely interested in these cars and highly value safety features can get a great bargain,” said Ly.

Cars to Buy New

For shoppers who prefer a new car, iSeeCars.com also analyzed cars with the smallest drop in price after one model year. The top 10 cars to buy new had price differences of just 7 percent to less than 11 percent, compared to the overall average of 21.2 percent.  “So for a few thousand dollars more, one can buy a new version of these models and get the peace of mind associated with a new car,” said Ly.

Top 10 Cars to Buy New 

Rank Model % Price Difference Between New and 1-Year-Old Used $ Price Difference Between New and 1-Year-Old Used
1 Chevrolet Colorado -7.0% -$2,311
2 Jeep Wrangler Unlimited -8.0% -$3,076
3 GMC Canyon -8.1% -$2,860
4 Honda Fit -8.1% -$1,495
5 Nissan Frontier -8.8% -$2,415
6 Subaru XV Crosstrek -9.2% -$2,393
7 Subaru WRX -9.2% -$3,048
8 Subaru Impreza -10.3% -$2,321
9 Toyota Highlander -10.4% -$4,131
10 Land Rover Range Rover -10.6% -$11,817

 

The 10 cars that experienced the smallest changes in price are models in high demand, and are dominated by pickup trucks and SUVs. “This could be due to the rising popularity of these car types due to low gas prices,” explained Ly. Notably, three Subarus and the Honda Fit compact car also make the list. Ly said, “Subaru as a brand, as well as the Honda Fit model specifically, are also currently in high demand with buyers.” In August, Honda Fit sales were up 85.1 percent compared to the prior year, while Subaru logged its 57th consecutive month of month-over-month growth and also marked its best-ever sales month in its history.

Because price isn’t the only factor in buying a car, smart consumers should consider all the reasons that are important to them before making a final decision. While consumers buying a lightly-used car can save a lot of money and often buy a near-identical car as the brand-new model, the disadvantage is that consumers will often end up with a lesser warranty or previous generation styling and technology. For example, because the Nissan Maxima underwent a full redesign for 2016, consumers buying it used would not get the latest features and technology. Ly noted, “One exception is the Volvo S60 — it has one of the best certified pre-owned warranties in the business that, in some ways, is better than the new car warranty, so there is very little trade-off in buying this model lightly used versus new.”

For the cars with the smallest price differences across the first year, consumers also gain the peace of mind in knowing that they are getting a brand new car with no concerns about its history. Ly said, “Still, consumers should keep in mind that they are still paying more for these cars new and they are literally dropping in value by thousands of dollars the moment they are driven off the lot.”

Methodology

 iSeeCars.com analyzed over 14 million cars sold between August 1, 2015 and July 31, 2016.  New cars included in the analysis were from model years 2015 and 2016.  Lightly or 1-year-old used cars were defined as vehicles from the 2014-2015 model years with mileage within 20 percent of 13,476, the average annual miles traveled in the U.S., according to the Department of Transportation. Models with fewer than 250 new and 250 used cars sold were excluded from the analysis.  The average asking prices of the 1-year-old used cars were compared to those of new cars from the same model. The difference in price for each car was expressed as a percentage of the new model average price. This percentage was then compared to the overall percentage difference across all models. The models which had price differences of at least 1.5 times the overall average difference were included on the list of models to buy used. The 10 models with the smallest change in price were included in the list of cars to buy new.

About iSeeCars.com

iSeeCars.com is an automotive data and research company that helps consumers find the best car deals by providing key insights and  guidance. It turns used and new car shopping on its head by applying Big Data analytics powered by over 25 billion (and growing) data points and using proprietary algorithms to objectively analyze, score, and rank millions of cars and tens of thousands of dealers. Based in the Boston area, iSeeCars.com was founded by former TripAdvisor and SAP developers and executives determined to improve the car shopping experience for consumers.

Search used cars for sale and find the best deals near you at iSeeCars.com.
To get a FREE iSeeCars VIN Report for a car, click here.