Whether they?re using an online car finder or checking out used cars for sale in Tacoma, consumers with good credit records seem to be shifting gears. According to Experian Automotive, an information service company that provides business and consumer credit reporting, more and more car buyers are choosing used cars over new ones.
?One of the biggest trends we continue to see is the shift into used vehicles by customers with excellent credit,? explained Experian?s senior director of automotive finance, Melinda Zabritski.
But why are consumers with premium credit taking out loans and heading to the used car dealership? One could guess that it has something to do with the astronomical prices of new cars today. According to Kelley Blue Book, just this past August, the average transaction price for a new car reached $34,000.
Zabritski said, ?As vehicle prices continue to rise, savvy consumers are looking for ways to control costs. That appears to be pushing more customers toward used vehicles.?
In the second quarter of this year, used vehicles accounted for about 55.6% of all auto loans, according to Experian. During that same quarter, over 43% of auto loan borrowers with the highest credit ranking bought a used vehicle. This number is 10% higher than it was a year ago.
Furthermore, the average auto loan amount for a used vehicle was $19,101, whereas the average amount taken out for a new car was more than $10,000 higher at $29,880.
Clearly, many car buyers are shopping smartly, choosing to aim low despite their high credit, and it?s not a bad idea. Purchasing a used car can often be a much better deal than buying new. New cars typically depreciate in value by 20% the moment they are driven off the lot.
On the other hand, for less than half the price of the average new car, one can purchase a four-year-old used car that is bigger and equipped with more features than a small new one. Some dealers even offer ?certified? used car programs for vehicles less than three years old.
Helpful research also found here.