Right now the certified pre-owned (CPO) market for used cars is as strong as it has ever been. May 2015 was the best month ever for top-of-the-line manufacturer-certified used cars, pickups, and crossovers.
According to Autodata Corp., via AutoRemarketing.com, there were an estimated 232,842 CPO used cars sold in May. Through May, more than a million have been sold.
Autodata also found FCA, Ford, Infiniti, Lexus, MINI, Nissan, Porsche, Volvo, and Subaru had record months. That begs the question: With sales so high, will I be able to find good deals? The answer is yes, but you need to know where to look. Certain segments are doing better than others, as are certain companies. You might find alternatives at better prices that will serve you just as well.
According to BlackBookAuto.com, which tracks trends in used car auction prices, car values have dropped for 8 straight weeks for a cumulative total drop of 2.3% over this period. Compact car, entry-level car, and entry midsize car segments dropped the most. “Broad declines starting to appear in the market led by smaller cars showing the most decrease in value with continued negative sentiments from the buyers,” said Anil Goyal, vice president of automotive valuation and analytics for Black Book Auto.
The Black Book Auto data covers used cars from 2007 to 2013 model years. Most certified pre-owned programs go back only 5 years. (Porsche’s, though, goes back 8 years.) Regardless, the data points to where the bargains are: compact cars, entry-level cars, and entry midsize cars.
Combine that with the Autodata information, and you can start to sniff out where the deals might be. For example, if you’re shopping for a certified pre-owned compact car, you’re probably not going to find a good deal at the Big 3 domestic brands simply because sales are already strong there. Three of the leading Japanese brands also had record sales.
That means you should consider alternatives like German car companies and Korean manufacturers. Cross-shop the segment you’re interested in, and see where the deals are. Maybe a Hyundai Sonata will be a better deal than a Nissan Altima, because Hyundai isn’t reporting record certified pre-owned sales.
You might also find deals in the near-luxury segment versus the luxury segment. Say for example, you have your heart set on a CPO Lexus. You might find a better deal on an upscale CPO Toyota. You could get similar bells and whistles (and definitely comparable performance) and spend a lot less money.
Now is also a good time to delve into the CPO truck segment. Prices have stayed consistently high for most of this year but are finally starting to drop. Again, cross-shop manufacturers. You may have had your heart set on a CPO Ram 1500, but a Chevrolet Silverado may offer you better pricing, because Ram prices actually jumped in May.
Make sure to also scout out which companies are offering incentives. That could affect your purchasing decision, too.
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