New Or Pre-Owned?
What should I do?
I need to get the most value for the money I spend... should I buy a new vehicle or is the Pre-Owned a "better value?"
A person that I knew stopped in and they asked me if they should consider purchasing a New Vehicle or a Pre-Owned Vehicle.
Knowing that I had worked for a New Car Dealership for 19 years, they knew that I understood both sides of the story and could give them an honest answer and help them make a choice that would work for them.
The New Car has factory warranty... but today, most of the pre-owned vehicles do as well. The factory warranty goes with the car now and not the owner. That means it may still have up to 100,000 miles of factory warranty left.
New cars may have big rebates that can "help" lower the price. And, while that may be true... those rebates are there to "entice" the customer to forget that after it leaves the dealers lot... it is now a pre-owned vehicle and that transistion from new to used will have a very large depreciation hit that will lower the value.
Now, that pre-owned vehicle has already had that depreciation... and the savings will continue... not just at the time of purchase but in the fact that you most likely will be in a better position when you go to trade it, in 3 years! That is because you did not need to take a "big value loss" down the road that a buyer of a new vehicle will see.
The New Car Dealer will look at your trade in as a "used car." But, a dealer who sells nothing but "Pre-Owned" vehicles will see your trade in as a car they would like to try and sell. As such, your trade in has more value to the "Pre-Owned" dealer than the "New Vehicle" dealer.
New Vehicles. They can have a big loss on trade in. That loss will reduce your buying power. And, in short, you may owe more in 3 years than you thought when it is time to upgrade.
Pre-Owned. Someone else took the "big loss" of being new. Your trade in will be viewed a s vehicle that has more value as that dealer sees it as a vehicle to sell and not "wholesale" out to the used car dealer so you should see more savings as a trade in vehicle.
In the end.. the customer who stopped in for "my opinion" chose to purchase a car that had only 8800 miles on it. This was also two trim levels above the "new" vehicle they had looked at, and he saved almost $6,800.00.