As inventory dwindles and automakers rein in incentives on new vehicles, Edmunds experts encourage car shoppers to turn to the used market this holiday weekend
SANTA MONICA, Calif., June 30, 2020 /PRNewswire/ -- Consumers thinking about purchasing a new vehicle this Fourth of July holiday weekend should consider looking at the used vehicle market, according to the car shopping experts at Edmunds. Edmunds' experts note that selection and savings are currently limited in the new vehicle market because inventory levels for new vehicles are running low due to factory shutdowns during COVID-19 and that the generous financing incentives offered by automakers at the start of the pandemic are drying up since more shoppers have returned to the market. According to Edmunds data, new car inventory at the beginning of June was down by a third compared to the same time last year.
"This Independence Day weekend might look a bit different than years past when it comes to incentives and deals on new vehicles, but the good news for price-conscious shoppers is that there's plenty of value and selection in the used market," said Jessica Caldwell, Edmunds' executive director of insights. "For those concerned about the risks associated with buying used, a certified pre-owned vehicle might be a good compromise as it comes with a warranty and is generally newer with lower mileage. And, thanks to a deluge of off-lease vehicles hitting the market, there's a much wider selection of these vehicles for shoppers to choose from."
Edmunds data reveals that the cost of a 3-year-old CPO vehicle is 33% less on average than the same new vehicle, which comes out to $12,193 in average savings. To help shoppers looking to purchase a CPO vehicle this holiday weekend, Edmunds experts have compiled a list of average savings for 2017 model-year CPO vehicles compared to their 2020 model-year new counterparts.
Average Savings for 3-Year-Old Certified Pre-Owned Vehicles Compared to New
Average 2017 Model-Year CPO Vehicle Price
Average 2020 Model-Year New Listing Price
Average Percentage Savings for CPO Compared to New
Average Dollar Savings for CPO Compared to New
Jeep Grand Cherokee
Edmunds experts have also put together some tips and considerations for car shoppers if they're considering purchasing a CPO vehicle this holiday weekend:
- Make sure it is a genuine CPO vehicle. Sometimes a dealership will label a vehicle as "certified," but it isn't the same thing as a manufacturer's CPO program. Check the window sticker for the manufacturer's CPO logo and find out who is providing the warranty. If the name of the warranty provider is the same as the make of the vehicle, you're in good shape.
- Know what the warranty covers. A manufacturer CPO vehicle will always come with a limited warranty, or a limited warranty and a powertrain warranty, which will cover major engine and transmission components. Every automaker's website lists the details of its CPO warranty. Take the time to read about the brand you're interested in and learn which items are and are not covered before making a decision to buy.
- Make sure to check the car out in person. This doesn't necessarily mean going to the dealership. Due to safety concerns during COVID-19, many dealerships are willing to drive vehicles to local shoppers' homes for test drives while following social distancing measures such as wearing masks and sanitizing the vehicle fully. Just call or text the dealership in advance to see what your options are.
"Many shoppers are unaware of the benefits of CPO vehicles, but given some of the financial uncertainties faced by so many Americans today, now is a great time for consumers to look into them as an alternative to new," said Ivan Drury, Edmunds' senior manager of insights. "These vehicles come pre-inspected, are required to meet automakers' condition standards, and offer peace of mind with an extended warranty. Also, specific colors and features can change from must haves to nice-to-haves when you're looking at savings in the $10,000 range, especially on models that haven't been redesigned in the last few years."
For more automotive research and insights, visit the Edmunds Industry Center here: https://www.edmunds.com/industry/insights/.
Edmunds guides car shoppers online from research to purchase. With in-depth reviews of every new vehicle, shopping tips from an in-house team of experts, plus a wealth of consumer and automotive market insights, Edmunds helps millions of shoppers each month select, price and buy a car with confidence. Regarded as one of America's best workplaces by Fortune and Great Place to Work, Edmunds is based in Santa Monica, California, and has a satellite office in Detroit, Michigan. Follow us on Twitter, Facebook and Instagram.
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