Age is but a number, but many car buyers care more about miles and what’s documented in the vehicle history report, according to most respondents in a recent survey by Bumper.
In the news: With demand growing in the used vehicle market, the vehicle history database Bumper asked 2,168 users: What age does a used car become too risky to buy?
A majority (59%) stated no age at all, and that all that mattered was the mileage and vehicle history.
The second most popular answer was 8 to 10 years old.
And the third most frequent response was 11 to 15.
“59%, they didn’t even care about the age of the car, it was more how it was maintained and the overall mileage, which if you know what you’re doing when you’re buying a car, that’s a good mindset,” said Jeff Ross of Bumper.
Diving deeper: Compiling industry data, Bumper found depreciation flattens out at year five after early losses of 25% in the first year, 12% in the third year, and around 6% in years five and six.
But as depreciation slows, maintenance and repair costs rise, hitting $761 in year five and then hitting $1,079 at 8 years old.
The Bumper data makes a case for a 6-year-old vehicle being in the sweet spot, given that depreciation is mostly absorbed by then, it’s beyond the 5-year repair spike, and at the start of the “calmest stretch in the ownership curve.”
What they’re saying: “It’s interesting to see the consumers shifting to that mindset just to try to save money,” Ross said. “The one thing that really popped up was that sweet spot in terms of what customers are comfortable buying, and the point at which a car’s maintenance and value intersect at about the six- to seven-year range.”
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Divided among brands: The data did create a pair of tiers that could sway decision-making, based on an average daily driving distance of 25 miles.
Tier 1 of Toyota, Lexus, Honda, and Acura had a lifespan of 19.6 years and retirement mileage of 180,873, meaning that at year six it still has two-thirds of its life.
For Tier 2 of Mazda, Subaru, Hyundai, Kia, GMC, Chevy, Ford, and Nissan, the lifespan was 16.8 years and 155,862 miles, meaning at year six it is nearing the halfway point.
Bottom line: With average new and used vehicle prices rising to more than $50,000 and $30,000, respectively, according to the August CarGurus Intelligence report, consumers are more open to considering older options.
The Bumper survey found only 14% felt that an 8-year-old vehicle was too risky to buy.
“For dealers, it opens up a new client base. New cars are high-priced… but for those looking for pre-owned, [dealers] have the opportunity,” Ross said. “A dealership could have a higher-quality, high-mileage vehicle that maybe they normally wouldn’t have had and that would allow them to bring in customers that might not have been looking at a dealership purchase.”
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