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General | Pre-Owned Sales & Marketing Strategies
August 14, 2012

Kbb.com Analyst: New-Vehicle Sales Increase at Expense of Used Cars

Posts:
General | Pre-Owned Sales & Marketing Strategies
August 14, 2012

Kbb.com Analyst: New-Vehicle Sales Increase at Expense of Used Cars

According to Alec Gutierrez, senior market analyst of automotive insights, Kelley Blue Book, the gap between new- and used-vehicle pricing in many segments has narrowed significantly, with new vehicles, on average, selling for only 11.5 percent more than a comparable 1-year-old used car.   Used subcompact and compact cars only offer consumers an average savings between 5 to 7 percent, while used hybrid cars and mid-size crossovers are within 3 to 4 percent of an equivalent new vehicle.  After factoring in incentives and lower finance APRs on new cars, purchasing a new vehicle is in many cases only marginally more than purchasing used.

While traditionally shoppers would save thousands of dollars by purchasing a slightly used vehicle rather than new, this is no longer the case, as used-car values remain near their all-time peak, Kelley Blue Book sees new-vehicle sales cannibalizing used vehicle sales.

During the past several months, Kelley Blue Book has observed a shift in shopper activity from used to new vehicles based on the 14 million visitors to KBB.com each month, as well as new- and used-vehicle sales.  In terms of Web traffic on the company’s car-shopping website, there has been a 5 percentage point shift in new-car shopper activity since January.  Similarly, new-vehicle sales have been increasing consistently year-over-year (increasing 9 percent in July alone), while used-vehicle registrations declined by 4 to 5 percent year-over-year from March through May.

The choice to purchase a new or used car can certainly vary depending on the model being considered.  For instance, a consumer considering a Ford Focus can save as much as $3,000 by purchasing a used model-year 2011; however, the strength of the 2012 redesign may prompt them to spend a little more on the latest and greatest model.  A consumer in the market for a Toyota FJ Cruiser should almost always opt to buy new.  A brand new 2012 FJ Cruiser currently has a Fair Purchase Price of $28,500, a mere $300 more than a used 2011 FJ Cruiser with 20,000 miles.

To assist consumers in identifying those vehicles that may make more sense to buy new, we have compiled a list of 10 new vehicles that are only marginally more expensive than their 1-year-old counterpart.

10 New Vehicles to Buy New Rather Than Used

New – Used

Make Model Trim

New MSRP

Kelley Blue Book® Fair Purchase Price (NEW)*

Kelley Blue Book® Sugg.  Retail Value (USED)*

$

%

Chevrolet Camaro LT Coupe 2D

$26,180

$25,261

$25,135

$126

0.5%

Toyota 4Runner SR5 Sport Utility 4D

$33,640

$32,294

$32,040

$254

0.8%

Toyota FJ Cruiser Sport Utility 2D

$28,515

$28,444

$28,200

$244

0.9%

Subaru Impreza 2.0i Sedan 4D

$18,245

$17,450

$17,300

$150

0.9%

Jeep Wrangler Sport SUV 2D

$22,970

$22,281

$22,000

$281

1.3%

Honda Fit Sport Hatchback 4D

$17,850

$17,234

$17,000

$234

1.4%

Volkswagen Golf TDI Hatchback 4D

$25,705

$24,168

$23,730

$438

1.8%

Kia Rio LX Sedan 4D

$14,150

$13,433

$13,150

$283

2.1%

Mazda MAZDA2 Sport Hatchback 4D

$15,325

$14,406

$14,100

$306

2.2%

Chevrolet Equinox LT Sport Utility 4D

$25,875

$24,845

$24,305

$540

2.2%

*Fair Purchase Price reflects value of a MY2012 new vehicle while Sugg. Retail Value reflects a MY2011 used vehicle

– Alec Gutierrez, senior market analyst of automotive insights, Kelley Blue Book

General•Pre-Owned Sales & Marketing Strategies

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