According to Edmunds, nearly 40 million used cars were sold in the United States in 2017 alone. That means that every day, nearly 110,000 used cars change hands across the country. Clearly, that’s an enormous volume, and it seems that the buying and selling of used cars is as popular as it’s ever been. The same Edmunds report states that used car sales increased by a factor of more than four percent between 2012 and 2017. That’s an interesting phenomenon, considering that the “classic” idea behind buying a used car involved feelings of distrust, stress, and worry that the vehicle at issue was not going to perform the way that the buyer had hoped.
Why is it, then, that used cars are selling so well in the United States these days? While there is no singular answer, there are several possible reasons as to why this is the case. We’re going to present 10 of them below, and hopefully reviewing them will help you decide whether a used vehicle is right for your current situation.
The most obvious reason that people choose used cars over those models that are fresh off the assembly line is because it costs less money to purchase such a vehicle. Given the amount of depreciation that occurs with a new car, truck or SUV, it doesn’t take long for the price of a vehicle to drop significantly. Generally speaking, the older a vehicle, the less it’s going to cost compared to its MSRP from the date that it was new. This makes payments more palatable for people, and it provides opportunities for some to simply make the purchase without even securing financing.
There were reasons that, 30 years ago and beyond, the idea of buying a used car being a risky venture had some validity. There were few if any warranties available, buyers were left to trust or at least depend on the word of the dealer or private owner selling the vehicle, and there was no easily-accessible body of data such as what you find in a vehicle history report that buyers could review before making a decision. With the advent of warranties and other forms of protection, used cars are now generally of a much higher quality than they were back then.
The advancement of the Internet has affected nearly every form of life as we know it over the past generation. That certainly includes the process of buying used cars. These days, prospective buyers can review reams of research from trustworthy sources, ask questions of those who may already own a particular model and even look in on communities dedicated to discussing a particular type of vehicle. That wealth of information prompts a much higher level of comfort in buyers, as prior to the Internet word-of-mouth was the only real option for finding out more about a vehicle that was being considered.
More Tangible Backing
Consumer complaints became so rampant with regards to the lack of quality in vehicles overall during the 1950s and 1960s in the United States that the federal government actually looked into the matter. Federal legislation was passed in the 1970s, and states now have warranty laws in place that protect buyers. When it comes to used cars, most auto manufacturers offer some type of certified, pre-owned program for their used cars that come with different types of warranties. The competition in the used cars market has naturally led to longer warranties that cover more potential problems.
Better Lemon Laws
The Magnum-Moss Warranty Federal Trade Commission Improvement Act of 1975 was the federal legislation mentioned above, but it covered all products and not automobiles specifically. In 1982, Connecticut became the first state to pass what is known as a lemon law, and today all states offer some form of protection. Generally speaking, proper enforcement of a lemon law as it relates to a particular vehicle provides a buyer with the right to have defects repaired. If such repairs are not feasible or if problems continue, a harmed buyer may be able to obtain a replacement vehicle or even a refund.
Longer Useful Life
Overall, cars, trucks, and SUVs are lasting longer now on average than they were even 20 years ago. According to 2014 research from Nationwide Insurance, properly-maintained vehicles lasted an average of 8.9 years on the road. That average has climbed steadily since then, according to the research, as you’ll see below:
Year Average Age of Vehicles in Operation:
2000 8.9 years
2004 9.8 years
2009 10.1 years
2014 11.4 years
What this all means is that based on these averages, buyers can reasonably assume that used cars are going to last longer than a few years if they are cared for properly.
Higher Resale Value
Given the longer useful life of vehicles in general and the fact that millions of lease turn-ins are now available for purchase, people are buying used cars that are newer overall. According to an article published in 2017 by USA Today, 3.5 million vehicles were returned at the expiration of leases in the United States in 2017, which was up from 3 million vehicles in 2016. When people buy used cars that are newer, they tend to sell them or trade them while they are still newer, thereby creating a higher resale point for many people.
Every year, a few hundred models of new vehicles hit the consumer market. While that seems like a lot of different choices for buyers, there are thousands of models of used vehicles on the market at any given time. This large number of choices once again creates a higher level of competition for sellers, and it also allows buyers of used cars to focus in on what they really want instead of what may happen to be available at a given used car lot. This leads to more successful purchases and happier buyers.
There are several variables that go into insuring a vehicle. Actuarial tables are used to define what could be at risk. One of the central variables in determining insurance cost is the value of a vehicle, for obvious reasons. When people buy used cars, they are obviously spending less than they would on a new vehicle, which means that in most cases, the value of that used vehicle will be lower than a brand-new alternative. This lower value can create significant savings when it comes to insuring that car, truck or SUV.
Vehicle History Reports
Millions of car accidents occur in the United States every year. When a vehicle is involved in an accident, it can have long-term ramifications for the useful life of that vehicle, even if repairs are done properly and promptly. A nice-looking used car could have a troubled past and consumers need to have a way of obtaining this information. Thanks to vehicle history reports, used car buyers can take a close look at the life of a vehicle in which they’re interested. This eliminates a lot of worry for the consumer.
Generally speaking, purchasing used cars is a much more secure and open process than it was many years ago. If you’re considering such an investment, you should make sure to take advantage of all of the tools available to you so that you can proceed with the peace of mind you deserve.