Thinking about putting a set of car keys under the tree this year? Consider a used car. It might not have the same cache on Christmas morning, but it's a much smarter financial move.
New cars typically depreciate the minute you drive off the lot. By the time it's a year old, the vehicle has lost nearly one-third of its value, according to Edmunds data.
"The sweet spot is to buy a car that's 2 years old," said Scott Tucker, president and founder of Scott Tucker Solutions in Chicago. "It's done quite a bit of depreciation yet the repair costs will still be relatively low."
And more car shoppers are wising up to this cost-saving opportunity. In fact, 2016 is on track for a record number of preowned sales. For the year, almost 41 million used vehicles are expected to be bought in the U.S., according to Cox Automotive, with December slated to be a particularly strong month for sales.
With more used cars on the market, there's a lot of variety and competition, and that's good news for car buyers, said Bill Kearney, president of Integrated Financial Concepts in Mooresville, North Carolina. Plus, concern over ending up with a lemon have been minimized thanks to sites like Kelley Blue Book and Carfax, he said.