South Florida Sun-Sentinel (Sunday)
Top 10 bargains on late-model used cars
Looking for a great deal on a used car? In South Florida, the best bargains can be found on lightly used luxury sedans, according to the automotive research site iSeeCars.com.
And buyers can get an even better deal on those sedans in South Florida, where average depreciation rates are higher and average used car prices are lower than the national averages, the researchers say.
That Lincoln MKZ that was priced at $43,299 in 2016? You can buy it 59.2 percent cheaper in South Florida — or about $17,451.
How would you like a Mercedes-Benz E-Class model that listed for $68,882 three years ago and can now be had for $28,546? That’s 58.5 percent cheaper.
iSeeCars has released a list of vehicles with highest rates of depreciation after three years of ownership, and they tend to be the ones with high list prices when new.
On average, all cars depreciate 38.2 percent over three years,
proving the adage of diehard used car buyers who always let the original owners take the initial decline in value. According to carfax.com, the value of new vehicles can drop by more than 20 percent after the first 12 months of ownership, and then lose 10 percent annually over the next four years.
But iSeeCars analyzed more than 4.8 million car sales to identify models that lose value at much higher rates after three years, the age that most leased cars enter the used car market.
The models that topped iSeeCars’ highest depreciation lists can deliver high quality and significant savings for used car buyers, researcher Julie Blackley said.
“Luxury brands are often leased, which creates a surplus of these three-year-old luxury vehicles in the used car marketplace without an equal amount of demand,” iSeeCars CEO Phong Ly was quoted as saying in a recent post by Blackley.
But to take advantage of the opportunity, buyers would have to endure what fewer and fewer drivers want to endure these days — drive a sedan.
In South Florida, depreciation after three years averages 41.3 percent — three percentage points higher than the national average. South Florida’s average rate of depreciation is thirdhighest average rate of the top 50 U.S. metro regions, and it could be a result of the region’s lower-thanaverage used car prices, Blackley said.
For example, a threeyear-old Kia K900 with an average national price of $26,522 costs $24,448 here, according to the rankings. A Cadillac XTS priced at $26,306 nationally costs $23,540 here.
The automotive marketplace site CarGurus.com has consistently ranked Miami as the cheapest city to buy a used car. The site’s most recent ranking, released in December 2018, found that used car prices in Miami averaged 11.1 percent below the national average. The site looked at sales within a 50-mile radius of the centers of its ranked cities.
Why is Miami cheapest? CarGurus doesn’t explain, but notes that ratings factors include supply and demand, population density and competition among dealers.
South Florida dealer Rick Case said the large supply of rental vehicles kept for use by tourists plays a role. “When you’ve got high supply, values are going to be less, he said.
As for why luxury sedans depreciate at a steeper-than-average rate, Case said manufacturers are often forced to offer higher incentives to convince people to purchase high-end cars, so depreciation off of the list price could be overstated.
Writing on the website Quora.com, Brian Feldman said luxury cars are bought by rich people who buy new cars every three years and leased by notso-rich people who exchange them every three years for another new luxury lease car.
All those luxury cars returning to the market after three years creates a supply glut, which dealers must address by slashing prices, he said.
Top 10 most depreciated cars in South Florida: Here are the 10 vehicles with the highest rates of depreciation after three years of ownership (excluding luxury cars over
$80,000 and electric vehicles), according to iSeeCars.com:
1. Volvo V60 — new:
$58,011; used: $19,241; depreciation: 60.4 percent
2. Lincoln MKZ — new:
$43,299; used: $17,451; depreciation: 59.2 percent
3. Mercedes-Benz EClass — new: $68,882; used: $28,547; depreciation: 58.5 percent
4. Cadillac XTS — new;
$58,846; used: $23,540; depreciation: 58.2 percent
5. Kia K900 — new:
$59,090; used: $24,448; depreciation: 57.6 percent
6. Volvo S60 — new:
$42,939; used: $18,392; depreciation: 56.9 percent
7. Lincoln MKZ Hybrid — new: $42,216; used:
$18,145; depreciation: 56.6 percent
8. Kia Cadenza — new:
$40,839; used: $16,547; depreciation: 56.2 percent
9. BMW 5 Series — new:
$63,248; used: $27,823; depreciation: 55.9 percent
10. Cadillac CTS — new:
$56,043; used: $24,750; depreciation: 55.5 percent
Most depreciated nationally Overall: Acura RLX — used: $28,259; depreciation: 55.8 percent
SUV: Lincoln Navigator — used: $37,905; depreciation: 51.6 percent
Pickup: Nissan Titan XD — used: $33,097; depreciation: 45.9 percent
Electric: Fiat 500e — used: $10,358; depreciation: 69.7 percent
Luxury over $80,000: BMW 6 Series — used: $45,293; 56.1 percent