NEW YORK (FOX 5 NEWS) - If you're looking to get a new car this holiday season, a preowned vehicle may be the way to go. The price of a new car rose by 1.2 percent last month while used vehicle wholesale prices dropped an average of 3.7 percent, according to Kelley Blue Book. This is the fourth month in a row they've seen a decline.
Rebecca Lindland, senior analyst for Kelley Blue Book, says one of the big appeals about used cars is that you don't pay for the depreciation. She adds that a typical new car will depreciate about 20 percent in a year. She explains that the flood of trade-in and off-lease models entering the market is causing a shift in prices. That allows consumers the opportunity to pick up a well-maintained vehicle that is usually still under warranty.
With the average household income not increasing and the price of the new car marketing rising, consumers have to make a choice, Lindland says. The average price of a new car is more than $35,000, she says, so buyers are taking out 72-month and even 84-month loan because they can't afford the payment.
So what other factors should consumers look for?
Lindland says go to the dealership prepared. If you have a specific car in mind and a price that you want to pay, you went get caught-guard. Also, decide what amenities or technology is important to you. In some instances you can narrow down your search just by knowing what you need. And lastly, factor in how much you drive. Lindland says people who should lease don't often lease. She says if you drive about 10,000 to 12,000 miles a year you really should look at leasing instead of buying.