SolveYourProblem Article Series: Hybrid Cars
Buying a Used Hybrid Car
Hybrid cars are all the rage on the current
market. Dealers are having trouble keeping them on their lots
as consumers buy them out from underneath them. Boasting a
very high rate of demand, naturally, the supply is going to
be limited. A limited supply drives the prices up. If you're
thinking about buying a used hybrid, make sure you carefully
research pricing before you get into any deals. Hybrid cars
are selling second-hand at much higher prices than traditional
vehicles.
This price increase is not only a function of the initial
price being higher. Hybrid cars do, indeed, cost more
right from the start. However, that is not the only reason for which
hybrids are reselling at higher prices. The real reason is
that hybrids are depreciating less than traditional models.
For example, a $15,000 traditional car that goes up for sale,
used, at $9,000 is what you are used to. A $15,000 hybrid car
might go up for resale (after the same amount of time as the
traditional car) at $12,000. This is a significant difference
in resale value for cars that started out with identical sticker
values. One reason for this is the supply and demand scenario
mentioned above. If used hybrids can be sold at a certain price,
they will be sold at that price; there is no need to lower
the price and make the depreciation rate similar to traditional
vehicles.
Another reason is that hybrids are coming with long
warranties,
such that owners don't have to be thinking about all of the
money they're going to have to 'put into' their car. Buying
a used car that still has 6 years under warranty left is a
very attractive prospect. Almost everyone is willing to put
up the money up front to have that guarantee that repairs will
be paid for by the company. When we're talking about an object
as mechanical and as expensive to repair as a car, having a
100,000-mile warranty is a wonderful thing.
Another
reason is that the most typical hybrids out there (Toyota
and Honda) are known to be 'good cars' in the first
place. Both automakers have an extremely good performance record
and a great reputation to live up to. Even non-hybrid Toyotas
and Hondas are known to be built to last; add in hybrid technology
and once long-running cars will run even longer. When you're
in the market for a used vehicle, it's only natural that you'd
put up more money for a vehicle that's going to be with you
for 8 years than for one that's going to serve you for only
4 years.
Automakers claim that all hybrids will run longer than their
non-hybrid counterparts, so we shouldn't make this decision
based solely on the reputation of the automaker. A Ford hybrid
SUV should run longer than a Ford SUV, regardless of Ford's
track record as a whole.
Another important consideration when in the market for a used
hybrid is how many years old you are willing to go. If you're
looking at a model that's 1.5 years old and selling for $4,000
less than brand new, you should consider going for the brand
new version. About half of the four grand will come back to
you immediately in most states as a tax credit for having bought
a hybrid. (There is, obviously, no tax credit or deduction
for used hybrid purchases.) If you buy the new model you'll
be able to resell it for that much more than you'd be able
to resell the older model for. In the market for traditional
cars, buying one that's 1.5 years old can be an exceptional
deal; in the hybrid world, 1.5 years old is not going to benefit
you either in the short term or in the long term.
There is not a huge hybrid resale market yet because hybrids
have only been around for 6 years and are mostly still under
warranty. As these warranties come to an end, perhaps we will
see a rapid increase in second-hand hybrid sales as folks play
the gambling game that we all play with our past-warranty vehicles.
The market for second-hand hybrids has not yet established
itself and developed a trend that we can put our full trust
in. For the time being, the trend is steady, but the market
is not yet large enough for us to be sure that this is a trend
that will continue into the future.
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by SolveYourProblem.com : 2007
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