Page 41 - GIADA-Dec 2017-Final

MARKETING

A Car With 100,000 Miles Is More Valuable

Than Shoppers Think, Reports Edmunds

Thanks in part to a tight supply of late-model used vehicles, values don’t dramatically drop once the odometer crosses six figures

It’s been a long-held belief among car “Even though the number of off-lease For example, a used 2015 midsize SUV with
buyers and sellers that once a vehicle passes vehicles entering the used market is 100,000 miles still holds 50% of its original
the 100,000-mile mark, its value begins to starting to level off, the average price of a value; however, a midsize car with 100,000
decline dramatically and its best days are used vehicle is still at a record high because miles retains only 42% of its value. The gap
behind it. However, the Q3 Edmunds Used demand also remains strong at the lower further widens between older, low-mileage
Vehicle Market Report reveals that’s now end of the market,” Drury said. “While the used SUVs and passenger cars.
largely a myth. oversupply of newer vehicles is good news
for buyers who can afford them, there’s still “If you’re someone who’s hanging on to
Thanks in large part to a tight supply of a very large segment of the population who an older SUV and thinking about trading
late-model used vehicles, values don’t just want an affordable vehicle to get them up for a new vehicle, this could be a great
dramatically decline once the odometer from A to B, and those are becoming much time,” Drury said. “You’ll have the chance to
crosses the six-figure mark. Edmunds’ harder to find.” take advantage of record-level new vehicle
analysis reveals that vehicle values decline incentives and year-end savings, as well as
only incrementally between 100,000 and The popularity of SUVs and trucks is also get top-dollar for your current vehicle.”
150,000 miles, and the rate of depreciation a driving force behind rising used-vehicle
is similar to the decline that occurs between prices, and it is creating a significant For the full Edmunds Q3 Used Vehicle
50,000 and 100,000 miles. residual value gap between passenger cars Market Report, visit the Edmunds Industry
and larger vehicles. Center. n
“After about the first 40,000 miles, vehicles
depreciate at a slow and steady pace. The
most dramatic drop-off is actually during
the first 20,000 miles,” Edmunds senior
analyst Ivan Drury said. “The 100,000-mile
myth is really just a psychological barrier
that more and more car buyers are getting
past. Following the recession, many people
were forced to hang on to their vehicles
longer than they may have wanted to
simply because they couldn’t afford to get Sunsets are beautiful, unless
a new car. People then saw for themselves
how much vehicle quality has improved it’s your GPS network.
and realized that a car with 125,000 or even
150,000 miles still has a lot of life left.”

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GIADA Independent Auto Dealer DECEMBER 2017 | 39