According to Kelly Blue Book the increased reliability and quality of cars on the road today has extended their life to an average of 11 years.
However, that may take a dramatic change this year as a stable economy, aging fleet and easing of credit availability is allowing consumers to revive their passion for new cars.
The latest technology enables a safer more secure and fuel efficient driving experience while manufacturing costs have been streamlined to make a new car with rebates and incentives a better deal than some pre-owned models. The exception being CERTIFIED Pre-owned luxury brands which originally sold for over $50k.
So in the emerging 2013 car arena, the best deals are new vehicles priced under $35k and Luxury vehicles purchased on an incentive lease program, or CERTIFIED Pre-Owned luxury models which are virtually half the new car price and offer some amazing incentive low interest rates on auto loans.
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When is a car considered too old?There was a time prior to 2008, when it was customary for car buyers to trade up to the newest model yearly, or purchase a vehicle with little more than a 2-year lease plan every other year. However, as the economy faltered, it become necessary for car shoppers to adjust their buying behavior. Belt-tightening in most households, concern about job loss and the mortgage crisis combined to cause delays in the purchase of a new car. Except for the “Cash for Clunkers” program in 2009, we know dealers, for the most part, suffered through some pretty lean years. Statistics bear out the extended period of time shoppers intend to keep their vehicles. Even today, the length of time continues to expand. In 2009, the intended length of ownership for their next vehicle was 6.1 years: in 2012 that has extended to 7.4 years1. We ran a quick survey on KBB.com in early December to gauge how this number might have changed since earlier in the year. It is eye-opening to see a third of shoppers say they intend to own their vehicle for over 10 years2. Part of this may be due to the increased quality of today’s automobiles, but certainly economic concerns are still a reason for the delay.
The good news for dealers is that the average person is driving a car that is almost 11 years old. So, according to our survey above, there are a lot of drivers that are waiting for the right moment to purchase a replacement vehicle. This, along with an economy that continues to stabilize, shows great promise for dealers looking for trade-in inventory. 1 Kelley Blue Book, 2012 Online Shopper Study (N=314)
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