Used cars have been in short supply and in high demand for the last 3 years. People have not been trading in cars as quickly as before the Great Recession. That makes used car prices higher than in recent years.New cars, on the other hand, are being discounted heavily, and loaded with incentives, to encourage people to buy and not hold on to their old cars longer. Most car makers are now offering rebates, low-interest loans, bonuses, and special lease deals that makes new cars a real bargain. Used cars do not have incentives and low interest loans — and are never leased. In short, there are rarely any “good deals” on used cars. Car dealers make more profit on their used car lot than on sale of brand new cars.The old saying that new cars depreciate by 15% when driven off the lot is a bit of a misnomer. If you actually paid MSRP sticker price (which we almost never do), that would be true for many brands of vehicle. However, if you get price discounts, bonuses, and rebates that reduce the price of the car by 15%, their is no depreciation when you drive the car off the lot — the 15% reduction in MSRP value has already been absorbed by the discounts.

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