New vehicle redesigns have a substantial impact on used vehicle prices; 1-year-old vehicles are typically 15-20 percent more expensive than a 2-year-old vehicle, but redesigned 1-year-old vehicles add an additional 15-20 percent premium on top of those figures.
Jonathan Banks, Executive Analyst for NADA Used Car Guide, said, "Let's say you have a 2-year-old car worth $20,000. Your neighbor has the same model of car as you, but his car is only a year old, and has gone through a newer, extensive redesign. Your neighbor's car would be worth $27,000 — or about 35 percent more than yours." Banks also said, "The price of the newer, redesigned 1-year-old used car holds considerably more value due to the fresher, redesigned look over your car, even though the two cars are only a year apart from one another."
Secondary criteria that also influence the value of redesigned used vehicles includes horsepower, torque and fuel economy. Surprisingly, reliability, warranty and safety characteristics are dwarfed by the power and fuel economy traits previously mentioned.
The year 2015 is already set to go down as one of the most important in automotive history when viewed through the eyes of the consumer. Manufacturers will churn out 34 redesigns of existing models by year-end, beating the 22 vehicle average since 1989. To compound spending matters for consumers trying to decide between buying new versus used, buyers will have 283 new models to choose from in 2015, up 99 percent since the 1990s.
With new model debuts outpacing model exits consistently over the last 25 years, 2015 marks the second highest number of redesigns in a year since 1989; only 2007 had more, with 41 revisions.
How Redesigns Affect Used Vehicle Prices can be downloaded via the NADA Used Car Guide website, at nada.com/b2b.
Report download address: http://www.nada.com/b2b/WhitePaper-2014-Q4.aspx?utm_source=Homepage&utm_medium=Q4_Whitepaper&utm_campaign=Banner
About the NADA Used Car Guide
Since 1933, NADA Used Car Guide has earned its reputation as the leading provider of vehicle valuation products, services and information to businesses throughout the United States and worldwide. NADA's editorial team collects and analyzes over 1 million combined automotive and truck wholesale and retail transactions per month. Its guidebooks, auction data, analysis and data solutions offer automotive/truck, finance, insurance and government professionals the timely information and reliable solutions they need to make better business decisions. Visit nada.com/b2b to learn more.
About NADA
NADA represents nearly 16,000 new-car and -truck dealerships with more than 32,000 domestic and international franchises. For more information, visit www.nada.org.
Contact:
Ryan Morris
Sr. Manager, Public Relations
NADA Used Car Guide
(703) 821-7165
[email protected]
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SOURCE NADA Used Car Guide
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