Why do people buy brand new vehicles when they depreicate so much in the 1st year?

Question

I dont understand why people are willing to throw so much money away.

And for that matter, why do the companies come out with 08's at the beginning of 07? The car is actually a year older than you think it is!

Answer 1

I have never bought an older car.
My reason is that i's worth spending extra money and knowing that I"m getting something BRAND NEW without any previous problems.
When you get a used car, you have NO idea what you are buying, where's it's been, what was done in it (germs!) and if there were any accidents... no car salesman is going to tell you straight up.

Answer 2

Buying a new car, will give you a warranty, plus you know the cars history. You know what has been done to the car, and how it was driven. Some people like the status of having the latest and the greatest.

The 08's are actually made starting in Jul;y after the annual summer shut down and retooling. If a model is not selling well, or it is a new model, then they will sometimes bring it out early. It is a marketing ploy for the most part. It's done to help sell the car and it saves the company money because they can get a longer run out of the same equipment without having to retool for the new model nest year. good luck.

Answer 3

Well some of the manufacturers do come out with their cars in January but all the US manufacturers come out in September with the next years models. Makes no sense at all to me. Regarding new versus old, a lot of people like a new car and if you lease and roll into a new one every 3 years you always have one. It is pretty tough to find a car that is a year or two old, most people aren't trading in until 3 years because of what you mentioned, the depreciation that happens actually as soon as you buy it. However this isn't just a car deal. Buy a new Television and try to sell it 6 months later and see what your value is.

Answer 4

Well, your question is not completely correct.....New Cars, being new, do command a higher price and there is some depreciation in the 1st Year. Not on all cars, but most. Now, your question shows that you are unsure how the car pricing thing works, so please let me explain:

MSRP or sticker price is the RETAIL price for an automobile, whether it is new or used makes no difference.

Invoice is the wholesale price on that particular automobile, now new cars dealers tend to recieve factory to dealer incentives for selling a particular model during a certain time period. Used Car wholesale prices are determined regionally by a couple different companies who poll auto auctions on what a particular model with these features in this kind of condition is selling for.

Now, the kicker, you are the buyer, and it is your money you are spending. If you spend it wisely or poorly, who makes this determination?

And, for your information, I purchased in Febuary of 2006 a 2005 Jeep Liberty CRD, brand new, 32 miles. Sticker price was $26625.00, I drove it off the lot for $17550.00, trade in on this truck 2 weeks later, I was curious, was $22400.00.
So, you see, I disagree with part of what you are saying about throwing money away. I researched and negotiated my deal, spending my money, and I came out pretty good.

As for early model release, there is the truck market, the suv market, the seadan market, the sport sedan market, and so on and so on. If a manufacture has a completely new model to introduce in one of these markets, they will normally release it earlier to take advantage of all the hype. As for the car being a year old already, yes it is a year old, but not in price. If a car is never registered, it is considered a new car. I don't rember the dealerships name, but it was a chevy dealership in Winchester, KY. Anyway, they had for many years an Indy Pace Car Corvette on their showroom floor. Now, I do know for a fact that the car, when eventually sold, it was sold as a new car, even though it was about 12 years old at the time.

Answer 5

Excellent question...I've asked that for years. The best new car buy is a leftover or a demo., followed by a short term lease turn in ( not a daily rental), about 2 years old, still in warranty. Some people just must have that new car smell all the time.

Answer 6

because brand new are cost effective interms of maintenance, gasoline which is most of the brand new is using ethanol or a hybrid system plus you get a warranty of 3 years or 100,000kms which comes first (some car company). when you buy used car, you are not sure how long will it last.

Answer 7

Some people are so afraid of used cars that they will not accept anything less than a new car and then they end up several thousand dollars upside down in the car almost immediately.

Answer 8

Beats the heck out of me.

Answer 9

It is for prestige i think they are spending a lot for that
http://www.imagegrumble.com/showpic-112.jpg

Answer 10

More money than sense.