Buying a new car is not a decision most people take lightly. About 86 percent of people conduct research online before they even visit a local dealership.
But 3.4 percent of new cars are resold within a year of purchase, according to a study by iSeeCars.com. They analyzed more than 46 million car sales. Their data showed that ten models are sold with a year two-and-half times as often as the average vehicle. The vehicles had at least 1,000 miles on the odometer.
What may be surprising is that most of the cars on the list were luxury vehicles. Here’s the breakdown:
- Mercedes-Benz C-Class (12.4 percent resold within the first year)
- BMW 3 Series (11.8 percent resold within the first year)
- Land Rover Discovery Sport (11.8 percent resold within the first year)
- Land Rover Range Rover Evoque (10.9 percent resold within the first year)
- MINI Clubman (10.7 percent resold within the first year)
- BMX X1 (10.4 percent resold within the first year)
- BMW X3 (9.0 percent resold within the first year)
- Nissan Versa Note (9.0 percent resold within the first year)
- Jaguar XF (8.8 percent resold within the first year)
- Nissan Versa (8.7 percent resold within the first year)
So why did people want to sell those cars so soon? One possible explanation: “Despite the popularity of these vehicles, they generally have below-average reliability ratings from Consumer Reports, which could contribute to why owners get rid of them so quickly,” says iSeeCars CEO Phong Ly. Find out which cars you should buy new—and which ones you shouldn’t.
But there could be another factor at work. The people who are likely selling the vehicles are dealership owners, not consumers.
“BMW and Mercedes offer incentives to their dealers to buy new cars to use as loaner vehicles, which are then sold as used when they are still under a year old,” Ly says. “In turn, this boosts the brand’s new car sales and introduces current customers to new models when they bring in their vehicles for service.” If you’re in the market for a new vehicle, this is the best time of the week to buy a new car.
That explanation squares with the data that another analyst is seeing.
“I think that the bulk of the vehicles that are hitting the market after one year are actually coming from dealership courtesy vehicles, especially since we see so many luxury vehicles on this list,” says Jeremy Acevedo, manager of industry analysis for Edmunds.com.
For a retail consumer, it would be extremely expensive to trade a new car in at the one-year mark. With depreciation, new car owners take a 20 percent hit on the value of their car as soon as they drive it off the lot, Acevedo says. So to trade one of the cars in for gas mileage or some other factor doesn’t make a lot of sense.
In addition, about 33 percent of new cars are leased and 50 percent of them are financed at a dealership, Acevedo says. So plenty of people are carrying loans for new cars. Find out what car dealers won’t tell you about leasing.
“We don’t see a whole lot of people that trade in their vehicles until they’re well into that term,” he says. But if you’re curious about it, here’s what happens when you trade your car in.
There is a potential upside to the sales of new cars for consumers. You might consider one of these barely used vehicles instead, Acevedo suggests.
“You get to buy these gently used vehicles that have low mileage,” he says. “They are a very recent model year that will have significant savings over new.” But first, find out 34 things your car dealer won’t tell you.