Get These 10 Great Used Luxury Cars for Less Than $30,000
PORTLAND, Ore. ( MainStreet) In the post-recession car market, even second-hand luxury is still luxury.
The U.S. auto industry reached 15.6 million vehicle sales last year after bottoming out at 10.4 million in 2009. While the industry is on pace for 15.9 million sales this year, it's still well below the 17.4 million it rung up back in 2001.
Sales of new cars have increased 4.3% year to date, but used cars have continued to be hot commodities as inventory recovers from the economic downturn and buyers seek deals. Publicly traded used car dealers CarMax, AutoNation, Asbury Automotive Group , Group 1 Automotive , Litihia Motors , Penske Automotive Group and Sonic Automotive have watched vehicle sales rise for 19 consecutive quarters and by double-digit percentages in three of the past four quarters alone.
According to used car data firm Manheim Consulting , vehicle repossessions are down as the economy improves and 8% fewer people are selling their used cars. Meanwhile, leases are back and dealerships are unloading 2.5% more used cars than they a year ago. Prices for used vehicles are up across the board, with cars selling for $8,000 to $10,000 less popular this year than models going for $11,000 to $14,000. Luxury cars, however, have only seen their prices rise by 0.9% in the past year compared with a 7.4% bump for midsized cars and a 9.8% leap for pickup trucks.
With the largely foreign-dominated luxury sector not feeling the pinch of the U.S. economic downturn nearly as painfully as their bailed-out U.S. counterparts, it's not entirely surprising that there's a bit more used luxury inventory available. It's only surprising in light of information from automotive data service Polk reveals the average age of cars and light trucks on U.S. roads to be 11.4 years. That's up from 8.9 years a decade ago and 9.8 as recently as 2007.
The luxury dealers tend to benefit from established certified pre-owned programs that recondition lightly used or leased vehicles to a light new standard. Last year, dealers sold 2.1 million certified pre-owned vehicles. A glut of off-lease vehicles not only brought that number well above its 1.5 million recession low in 2009, but placed it above a pre-recession high of nearly 1.7 million. Sales of certified pre-owned vehicles have already risen 11% year-to-date.
There are a few benefits to this approach that outweigh the extra mileage. The price is a fairly obvious lure, but so is the lack of upfront costs for a new vehicle. With the price of a new luxury car depreciating 35% to 40% in the first three years, picking up a pre-owned model lessens the blow a bit by shifting the majority of a vehicle's depleted value onto the original owner. Also, certified pre-owned vehicles get an inspection, some retooling and in the best cases extended coverage from the dealer that a buyer wouldn't get from a private-party sale.