Hello. Partner’s 2011 Ford Fusion Hybrid is on its final legs (actually, possibly past its final legs), so we’re starting to look at replacing it. Partner would prefer to buy, rather than lease (he doesn’t like the idea of replacing a car every 2-3 yrs, was hoping to get a CX-5, and is fine driving cars past 100K miles, if they’re still in good condition).
Buying a new CX-5 is more than we want to spend, but it seems like there are a decent number of CPO CX-5s near us in our price range (in the low $20K range for a Grand Touring from 2019 w/ ≤ 50K miles). We’re going to look at credit-union rates for a used car loan.
Comparing new car deals seems relatively straightforward b/c there’s more current data. For comparing CPO deals on a specific model, I’m comparing prices and making minor mental adjustments for year, mileage, and trim on the Mazda CPO website.
A few questions:
I’m assuming there’s not much room for negotiation on CPO prices. Is this generally correct?
Is there a (much) better way for me to compare prices that I’m missing?
Not in my experience. Shortly pre-pandemic (March 2020) we negotiated a CPO accord for my sister. All in all we bought the car for a little less than $2,000 less than advertised. If you form a reasonable deal negotiation is completely possible.
It really depends. Frankly, the more aggressively priced a CPO vehicle is, the more likely it is that they’re probably firm on the price (and sometimes they artificially price it low to draw in interest and then pack a bunch of add-ons).
Best thing to do is track the pricing of all the ones you like and compare to book values (just for context) and determine which are the best deals. You may also want to note how long certain cars stick around for sale, and which move fast and thus could be interpreted as being priced right.
But keep in mind that there’s condition differences that can’t be discerned in pictures. Plus you have to evaluate the vehicle history (# of owners, accidents, maintenance records) that you may be able to track in the CarFax.
Easiest way IMO is to jump on Cargurus and filter down to the model and trim you want. Then filter for CPO, no accidents, miles, and whatever else. Then start comparing from there.
Each used car and dealer is unique. I hated selling used when I worked for Audi since they had $1000 grosses if I was lucky, so everyone was usually a mini. When I worked for BMW, the used car sales guys made 20% more than new car sales. Really all that matters is how the car is priced relative to the rest of the market. It doesn’t matter if a dealer owns the car for $1 or $100,000 if the market is $50,000.
This used to be a good strategy but I wouldn’t recommend it today.
At some point mean reversion in used car values is inevitable. So you’re looking at very steep depreciation. If the 2008 financial crisis is any guide, the model years with the lowest new car sales hold their value best. So a 2022 or 2023 may actually depreciate less than a 2019 bought today.
Other aspects of TCO say the same thing
Finance charge: lower on the new one.
Maintenance/service: Lower on the new one.
I highly recommend looking at a brand new Toyota, Honda, Mazda, Hyundai, etc in your budget.
We def haven’t ruled out getting a new car. Thankfully, the current car still functions, so we don’t need one RIGHT NOW. So we’ll test drive some new and used to see what he likes best.
