When a new car is a better deal than used

It's an article of faith among shoppers looking for a bargain on a car: Buying a year-old used car is a way better deal than buying a new one. After all, new cars suffer on average a 27 percent depreciation in value their first year. But it's time to shake that faith.

For a handful of SUVs and pickups with low first-year depreciation, buying new makes more sense, according to a new study by research site iSeeCars.com.

For instance, you can buy a new 2018 Jeep Wrangler for just $3,199 -- or 8.9 percent -- more than the same Jeep as a one-year-old 2017 model. "Instead of buying a car that has been driven for one year, consumers can buy the new version for just a few thousand dollars more and take advantage of the latest technological and safety features," said Phong Ly, CEO of iSeeCars.com.

Of the nine vehicles the study cites as losing less than 15 percent of their value in the first year, eight are either SUVs or pickups. The one exception -- in ninth place -- is the Subaru WRX, a low-volume sports car in high demand.

"The list reflects the current marketplace as demand for SUVs and pickup trucks is at record levels, while demand for passenger cars is steadily declining," said Ly. Jeep, Toyota and Honda each have two models among the top eight.

In addition to the Jeep Wrangler, other SUVs on the list are the Toyota 4Runner, Honda Pilot, Honda HR-V and Jeep Renegade. Pickups include Toyota Tacoma, Nissan Frontier and Chevrolet Colorado. The full details are available at iSeeCars

To get these findings, iSeeCars.com analyzed over 6 million cars sold between Aug. 1, 2017, and Jan. 24, 2018. New cars were 2017 and 2018 models. Used cars were 2016 and 2017 models carrying mileage within 20 percent of 13,476 -- the average annual miles a vehicle travels in the U.S.

The study also screened for the cars with the biggest one-year depreciation -- that is, the ones you would save the most on by buying them used. The list was dominated by luxury cars, led by the Cadillac XTS, which loses an average of $20,965, or 38.7 percent, in its first year. The Mercedes-Benz E-Class loses $22,919, or 35.8 percent. The Cadillac CTS finishes fifth on this list. 

"Many luxury cars are leased by individuals or companies for fleet or management use and replaced often with newer models," explained Ly. "This turnaround increases the number of used cars in the marketplace, causing a larger drop in price."

The one startling name on the list of biggest depreciators is the midsize sedan Toyota Camry. But Ly said this appears to be a one-time phenomenon caused by a complete redesign and high recommendations for the 2018 model -- making buyers less eager to settle for the year-old model. 

  • Jerry Edgerton - feature On Twitter»

    Jerry Edgerton, author of Car Shopping Made Easy, has been covering the car beat since Detroit companies dominated the U.S. market. The former car columnist for Money magazine and Washington correspondent for Business Week, Edgerton specializes in finding the best deals on wheels and offering advice on making your car last.