losing value on new car?

Question

i always hear people saying that the minute the front tires of a new car hit the main rd the car starts to lose value( anywhere between 1-5,000 dollars) is this true...so here is my question if this is true.. why would i want to be anywhere near invoice price on a car at the lot that has at least 20 miles on it from test driving..point in case we looked at a nissan armada a few weeks ago (42,000) it had 20 miles on it before we took it out to test drive when we came back it was at 32(yeah we drove all over it gave a great ride) but when we went to talk pricing they wouldnt budge on price(found this same problem at three nissan dealers in the area)..and this particuler one is the one i want (with the 32 miles and all)..any answers

Answer 1

I believe you have mistaken the reason that new cars lose value. It isn't because they have a few miles on them, it is because they have been purchased by someone else before you. As several people have already mentioned, you will never buy a car with zero miles on the clock.

There are many reasons why the second buyer gets a lower price. These could include the lack of rebates available, the difficulty (not impossible) of leasing, and one that is overlooked is the transferability of the warranty. An example of the latter is a new Hyundai has 10/100k drivetrain warranty for the first owner only. The reason a dealer may not negotiate is either the supply and demand ratio for a particular unit is on his side, or possibly you signaled that you must have this vehicle. The dealer is entitled to make as much as he can on his investment.

Now you can take this information that you have received and benefit by looking for a used 2007 Armada. If you aren't inclined to do that because you want a brand new one, add that reason to the list of why new ones depreciate dramatically as soon as the taillights are down the road from the dealer.

Answer 2

Whether a car has 2 miles or 32 miles on it, if the title hasn't changed from the dealer then it is still "new".

If you were to buy a car and put even one mile on it and returned it, the price would drop more than $1,000 for the next person who bought it, since it was re-titled. The amount of miles has no bearing on whether a car is considered new or used, only ownership matters. The only exceptions are dealer cars that are used extensively for demos or courtesy cars and get a couple thousand miles on them - even then, they are considered "new" but sold at a lower price.

At a Saturn dealer recently, I inquired about leasing an Aura that had 80 miles on it. They said I could not, since it is technically a used car because someone ordered it, had it a few days, and returned it.

So keep that in mind if you don't put anything down on a car. You will be driving around a car that is worth less than is owed on it for quite some time.

Don't consider how many miles have been put on a new car - whether it's 10 miles or 100 miles, the difference is negligible when talking about the life of a car (over 100,000 miles) and its value.

Answer 3

I think part of the reason is that it's not "new" if someone has already bought it. Also, if someone sells it shortly after buying it, one has to wonder why? Could be they can't swing the payments, or maybe it's because the car has been giving them trouble or is not as good as they thought? That definitely has an effect on price.

To me, "new" is from the dealer with less than 100 miles on it. I mean any car will pick up a few miles just from manufacturing and shipping and being at the dealer. Then you figure each car probably gets a few test drives. My last new car had 28 miles on it when I purchased.

So yes, it is true that if you buy it and maybe a few days later you decide you need to sell it, you will take a hit, probably of 2 or 3 thousand, plus all the sales tax you just paid.

Answer 4

A new car will never have zero miles on it. Sometimes dealers let people test drive new cars. 32 miles is NOTHING in the life of a car. In fact I'm generally surprised to get a new car with less than 50 with dealer swapping and such.

Regarding the value loss, yes it does lose value, but it's not because of the actual value. it's because when you trade, you trade for wholesale costs and when you buy, you pay retail costs.

Answer 5

No, it's not true.
The value drops by almost 1/3rd..
The easiest way to figure this out is to find a brand new car and then look at the same car used on the same lot.
You'll see how much the car drops in price.
That's why it's ALWAYS best to buy a car that's a year or two old. You get all the same options at nearly 1/3rd the cost.

Answer 6

Ok the dealer shouldn't be selling it to you for brand new price surely it has been pre registered with them so you are not the first owner. (Not 100% sure how the registering works over there with demonstrator cars)

A car will loose money as soon as it driven off the lot. It would usually be the tax paid and the registering fees.

(That's how I understand it is anyway)