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Gap Shrinking Between New and Used Prices

After factoring in incentives and lower finance APRs on new cars, purchasing these new vehicles ends up only marginally more than purchasing their one-year-old counterparts, according to Kelley Blue Book.

by Staff
August 8, 2012
3 min to read


The gap between new- and used-vehicle pricing in many segments has narrowed significantly, with new vehicles, on average, selling for only 11.5% more than a comparable 1-year-old used car, reports Alec Gutierrez, senior market analyst of automotive insights, Kelley Blue Book. 

Used subcompact and compact cars only offer consumers an average savings between 5 to 7%, while used hybrid cars and mid-size crossovers are within 3 to 4% 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. 

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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% in July alone), while used-vehicle registrations declined by 4 to 5% 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, Kelley Blue Book has compiled a list of 10 new vehicles that are only marginally more expensive than their 1-year-old counterpart.


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10 New Vehicles to Buy New Rather Than Used Make Model Trim New MSRP Kelley Blue Book Fair Purchase Price (NEW)* Kelley Blue Book Sugg. Retail Value (USED)

New - 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%


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

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