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Used Vehicles Become Bigger Bargains

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Used cars have become bigger bargains. Their average price, which is currently at the lowest level since 2010, dropped 4.5% in 2016 and is expected to drop another 6% for 2017, with more modest declines expected in the next few years. Reasons… 

• Automakers are offering appealing financing deals and other incentives on new cars, cutting demand for used cars.

• Millions of car shoppers took advantage of unusually attractive lease offers back in 2013–2015. Now those “off-lease” vehicles are returning to the market as low-mileage used cars, pushing up supply.

Today’s prices are especially attractive for highly regarded used crossovers and small SUVs such as the Toyota RAV4, Honda CR-V and Ford Escape…and reliable small and midsize sedans such as the Toyota Corolla and Camry, Honda Civic and Accord, Ford Fusion and Nissan Altima. Deals on used small and midsize sedans are particularly good these days because with fuel prices low and the economy relatively stable, many car buyers are leaning toward larger vehicles such as mid- and full-sized SUVs.

The average price of used pickup trucks has remained relatively stable—though it, too, is likely to decline over the next few years.

What to do: Before you buy a new car, crossover or small SUV, explore how much you could save by buying a used car without many miles on it instead. If possible, wait until more 2018-model-year vehicles start to arrive on lots this fall before shopping—dealers are likely to drop prices on existing used inventory even further then.­

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Source: Jonathan Banks, vice president of vehicle analysis and analytics at the market research firm JD Power, Costa Mesa, California. JDPower.com Date: August 1, 2017 Publication: Bottom Line Personal
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