This is the best age of a used car to buy
| 25th February 2019
If you’re in the market for a used car then this is the best time since you may find yourself in the unenviable position of having to choose between, say a 3-year old car with a 100,000 km mileage on the clock, or an 8-year old car that has covered 50,000 km.
Ideally, you want to hit the sweet spot between age and mileage to find the best, however, you might not be sure on how to balance the two.
While newer cars may mean fewer maintenance costs, these vehicles come at a higher price. Older cars on the other hand may be cheaper, but problems down the line could end up making the costs less than ideal.
So what’s the best age of a used car to buy? Here’s valuable insight that will help you gauge the best age of a used car to buy.
Vehicle Age and Depreciation
When you buy a new car, it depreciates the moment you drive it off the lot.
What most people don’t know is that depreciation is greatest in the very first year of ownership.
Since depreciation makes cars lose value, a wise move is to purchase a second-hand car that has already taken its bulk load of depreciation. Picture this scenario:
Suppose you purchase a new SUV at AutoVolo for £22,500–that’s the average cost of a small SUV in the European market, according to a new report. As soon as you drive it off the lot, your car will now be worth £20,025—that’s an 11% decline in value.
A year later, your car will have depreciated by 25%. It’s now worth £16,875.
In three years time, the value of your car will have declined by a whopping 46%. It’s now worth £12,150. What about five years down the line? Your once a premium car will be worth less than £10,000.
Bottom line: Figure out the right age, get your sweet spot.
Purchasing a second-hand car at the right age can help you beat the biggest depreciation slump. The trick is to let the first owner take the biggest hit, then enjoy the benefits later. Consumer Reports suggests that would be in 2-3 years’ time.
Why?
Vehicles that are 2-3 three years old have already passed their first depreciation drop and are still low on mileage. Moreover, you also get to own a car with modern technology and safety features, which you might not get in a 10-year old car.
Car Warranty
Before you buy a used car, it’s also important to check on the manufacturer’s warranty.
A car’s manufacturer’s warranty usually covers the vehicle for the first three years, although it can be longer or shorter. You don’t need to be concerned with repairs as the manufacturer’s warranty can be transferred to you, thus cutting down on major expenses.
Again, a 2-3 years old car is in most cases likely to be within the warranty coverage, which further makes that the optimal age of used car to buy. You might also want to consider an extended warranty for your vehicle to protect your purchase. Companies like TheDrive.com offer extensive, in-depth coverage of popular providers and plans such as CarChex.
If you’re looking for a used car that is more than 2-3 years old but still prioritise warranty, consider buying a Certified Pre-Owned (CPO) vehicle. CPO vehicles usually come with a decent warranty that guarantees good performance and peace of mind.
There are many things to consider when deciding how old is too old for a second-hand car. Besides depreciation and mileage, be sure to also take into account a car’s damage history, brand type and whether the car is still attractive in the eyes of the public.