After some unprecedented market conditions, buying a used car instead of a new one is again becoming the Clark Smart move it always used to be.
Almost three years ago, for the first time in 26 years on air, I started recommending new cars over used cars when people would call me to ask what they should buy. That was such a shocker to a lot of listeners.
But in the aftermath of the financial crisis, the car market dried up, leases disappeared, and Cash for Clunkers made the used market extremely short of vehicles. It got to the unprecedented point that you could buy a brand new car for less than a 1 to 3 year old car!
That is no longer the case right now as new auto sales have really heated up over the last year. People who come in to buy a new vehicle often trade in a used one. So the used vehicle market is getting well supplied again.
In fact, The Detroit News reports that the average price on a used car is now $19,000 versus $31,000 for a new car. The real sweet spot of the market is smaller fuel-efficient cars. For example, the newspaper says a 2010 Toyota Prius that was under $19,000 just 90 days ago is now a little more than $15,000. That’s a nearly $4,000 price drop in just 3 months! People suddenly are not into fuel efficiency!
Just remember any time you buy a used car, you must have it inspected by an independent diagnostic mechanic of your choosing as a condition of purchase.