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Wednesday June 18, 2008
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If you're looking for affordable high technology in cars, the recent slump in used car prices may help you get the same car for markedly less than you could have a year ago. One of the best deals is to pick up a three-year-old car coming off lease. Even with a navigation system, Bluetooth, and premium audio, you might pay $1,000 to $5,000 less than you would for a similar three-year-old car a year ago. Premium luxury/sport models, the ones most often loaded with useful (if you love technology) options, are the ones hardest hit on used car prices. Black Book, an industry guide to wholesale prices of used cars, says the average wholesale price of a 2005 Mercedes-Benz is down $4,739 (to $29,733) between May 2007 and May 2008, the price of a BMW is down $3,011 (to $25,607), and the price of a Lexus is down $1,412 (to $23,571). In comparison, according to a story in Automotive News, the price of the average 2005 Dodge is down $499 and the average Toyota is down $140. Buying a three-year-old car coming off lease has a range of pros and cons:
-- The biggest depreciation is in the first year, so you've avoided that.
-- A three-year-old car with 36,000 miles still has 100,000 useful miles left, probably more.
-- Three years old is new enough that you're getting fairly new technology.
-- Tech options hold even less of their value than the car itself.
-- However, lease cars tend not to pile on the options, especially the ones customers take from stock. It's easy to find a car with leather seats, premium audio, and an iPod adapter; a bit more difficult to find one with navigation and Bluetooth; harder still to find a used car with active cruise control or lane departure warning, the former being a high-cost, low-take-rate option, the latter not being available until the past year or two.
If you're patient in your shopping, you'll likely be rewarded with a lower price. According to Black Book, in a typical year the wholesale price of a used luxury or near-luxury car would fall 15%-17% but in the past year it fell 20%-22%.
Posted By:
Bill Howard
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