If you’re shopping for a vehicle and trying to save money, you may be weighing your options between a new can and used one.
Money expert Clark Howard is a strong proponent of buying used cars.
But which used vehicles give you more bang for your buck?
Which Used Cars Should You Buy Over New Ones?
Vehicle research website iSeeCars.com recently released a report that shows which cars you should buy used instead of new. The verdict? Lightly used luxury vehicles may give you the best value.
That squares with Clark’s view:
“I’ve had an obsession forever about why buying a used vehicle is so much better for your wallet than buying new,” he says. “There are a lot of people who love that new vehicle smell; they want that new vehicle. And if it works for you financially that’s fine. But for most people, buying used is going to be a much better choice.”
To come up with its results, iSeeCars analyzed the prices of 2.6 million new and used cars that were purchased between August 2020 to March 2021.
Here are some key findings from the report:
- The average lightly used car that is one-year-old costs 17% less than its new version.
- Cars with the largest price differences between gently used and new are predominantly luxury vehicles.
- The price differences between a gently used car and a new model range from $6,000+ to more than $24,000.
Ready to see which used vehicles give you the best value compared to new ones? Let’s take a look at our list ranked by percentage.
Buy These Cars Used vs. New
|Models||% Price Difference vs. New||Dollar Difference|
|BMW 5 Series||36.4%||$24,207|
|Mitsubishi Eclipse Cross||31.6%||$8,041|
|BMW 3 Series||29.7%||$15,266|
From the list above, you can see that car shoppers who choose to go with a one-year-old version of the model they like can reap huge savings. But Clark wants you to save even more.
He recommends that you look to buy a used vehicle that is around three years old.
“When you buy a vehicle that’s three years old, the general back-of-the-envelope rule is that it would have lost roughly a third of its value,” Clark says. “Some models, substantially more than that, others a little less. But generally about a third of the value has been wiped out in those first three years.”
As an example, if you’re looking at a new vehicle that costs $20,000, a three-year-old model should generally allow you to deduct about $6,666 from its price tag.
Of course, there are more factors to consider when shopping for a vehicle.
Interested in more tips? Here’s how to buy a used car.