The American dream of owning a luxury vehicle is no longer reserved for the ultra-wealthy. Over the past few years, a significant shift has taken place in the used car market, making premium vehicles more accessible to everyday buyers. Whether it is a sleek BMW, a spacious Cadillac Escalade, or a sporty Mercedes-Benz, luxury used cars for sale by owner are showing up at prices that were simply unimaginable a decade ago. But what is driving this trend, and how can smart buyers take advantage of it?.
Buyers Can Take Advantage of Rapid Depreciation
One of the main reasons luxury vehicles are becoming more affordable is because of rapid depreciation. A new luxury sedan depreciates anywhere from 20%-30% in the first year of ownership. After three to five years of ownership, the original price of the vehicle will have decreased by almost 50%, while the vehicle still appears and performs as if it were new.
The depreciation curve is advantageous to buyers who purchase an older model of a car. Buying an older model of a luxury car allows you, as a buyer, to buy luxury items (i.e., heated leather seats, large sunroofs, advanced driver assistance systems), but at far less than what you would normally pay for their original price. This makes purchasing a luxury vehicle an excellent financial decision.
Independent Sellers – Better Value Than Dealerships
The second significant change is that an increasing number of buyers are now opting to purchase their vehicle through private sellers, rather than dealerships.
When purchasing a used vehicle from a private seller, many times you will find good deals (meaning, the price of the car is less than the price you would pay for the same make and model as a used vehicle at a dealership). The reason for this pricing difference is because private sellers do not have the same overhead as dealerships. By eliminating these costs, private sellers are able to pass the savings onto the buyer.
Private sellers do not incur the expense of renting or leasing building space (floor space), operating advertisements (advertising), paying for employees’ commissions (sales staff) or managing employee commission programs. The transparency that makes private sellers appealing also works in the buyer’s favor when a vehicle has mechanical problems — a decision to sell car with blown engine through a private listing typically comes with full disclosure of the issue, allowing both parties to negotiate a price that reflects the actual repair cost.
Private sellers are also likely to be more willing to negotiate than dealers. As such, the net result is that buyers can save thousands of dollars when buying a luxury vehicle from a private seller.
Some Examples of Luxury Vehicle Savings Are:
- Late model luxury SUVs with low miles from the original owner
- Certified pre-owned sedans from the previous owner with full service history
- Off-lease luxury vehicles being resold privately for less than the dealer retail price
- Luxury coup or convertibles being sold by the previous owner who is upgrading to the next model
These opportunities can often be found through used cars for sale by owner listings, where buyers can access premium vehicles at significantly lower prices.
The Advancement of the Internet Has Helped Make Private Sellers Safe
For many people who are interested in purchasing a vehicle from a private seller (be it through a classified ad or online), one of the biggest concerns that people have when doing such transactions is a lack of trust in the seller.
Many people ask questions such as:
- “Is this car worth the asking price?”
- “What condition is the car really in?”
- “Am I really buying a vehicle from the seller?”
- “Will I get ripped off?”
The above concerns are reasonable concerns; however, they are becoming less worrisome due to the changes in technology that have occurred recently.
Technological advancements now allow for the availability of vehicle history reports, third-party mechanic inspections, and secure payment options for private sales. In addition, before meeting with a private seller, you can verify the vehicle you are considering has had no accidents, has had a small number of prior owners, and has had regular routine maintenance.
Because of the increase in transparency, private used cars for sale listings have become a more reliable option for people looking to buy a car, including those who are looking for luxury models. Many platforms have been created just for luxury cars that are sold between private parties. These types of platforms allow buyers to easily locate high-end used cars.
If you are an existing owner of a luxury car and want to upgrade your vehicle to something newer, you will be better off choosing to sell your car privately for more than you would get by trading it in at a dealership.
Dealerships typically offer low trade-in values for used cars. Since dealerships will be reselling your vehicle, they need to make money and offer you a wholesale price for your vehicle. However, by selling your vehicle to someone who is willing to pay market value, you will make much more on the sale of your vehicle.
The difference between the trade-in price that a dealer wants to give you for your vehicle and the sale price when sold to an individual is typically several thousand dollars for a luxury vehicle that has a lot of equity remaining in it.
Why Consider Buying Through Private Sale?
If you’re considering purchasing a luxury vehicle on the private market, here are some strong reasons for doing so:
- Private buyers can often command higher prices than dealers will offer as part of a trade-in
- Buyers determine the final asking and negotiating prices
- Buyers don’t have to feel pressured to package their new vehicle purchase with their trade-in price
- If a buyer prices their luxury vehicle competitively in a strong used market, transactions are generally completed more quickly than through traditional dealer routes
Many of these opportunities are available through cars for sale by owner marketplaces, where buyers and sellers communicate directly without dealer involvement.
Financing Options for Used Luxury Buyers Continue to Expand
The availability of financing for used luxury vehicle purchases continues to increase. Traditionally more conservative lenders, including banks, credit unions, and online lending institutions, are now offering competitive interest rates and terms on certified pre-owned (CPO) vehicles, including luxury vehicles.
A buyer who may have never purchased a luxury vehicle a few years ago may now find his/her monthly payment on a 3-year-old luxury SUV is within $100 of the payment on a brand New economy vehicle!
Many lenders now offer entirely online pre-approval processes that allow buyers to determine their buying power before they ever shop for a car. This not only removes some of the anxiety from the purchase experience but also provides the financial confidence necessary for buyers to act quickly when presented with an attractive opportunity.
Some Smart Practices When Buying A Used Luxury Vehicle Privately
If you are ready to explore buying a used luxury vehicle through the private sale process, here are some simple steps you can take to protect yourself while still getting the best possible deal:
- Before committing, obtain a complete vehicle history report (using the VIN) for the vehicle you are considering
- Before completing the purchase, schedule an independent pre-purchase inspection with a certified mechanic
- Research the fair market value (FMV) for the specific make/model, year, and mileage of the vehicle you are considering buying
- Ask the seller for all available maintenance records and any other documentation regarding repairs to the vehicle
- Agree to meet at a safe, public location to complete the transaction; if possible, take someone with you who you trust
While these steps are rather simple in nature, they could save you a great deal of money and/or heartache when purchasing a vehicle on the private market from another individual.
Final Thoughts: Find Your Dream Luxury Vehicle on Karkiosk
Currently, there is a great deal of momentum in the market in favor of the buyer, and right now, access to a luxury vehicle at a price typically associated with a non-luxury vehicle has never been better.
Accelerated depreciation rates, motivated private sellers and improved access to the internet as a means of conducting safe transactions with the private seller, have all made it possible for significantly more buyers in this country than ever before to consider purchasing a luxury vehicle.
If you are interested in finding your next luxury vehicle whether it’s a Lexus, Audi,, Infiniti, BMW, Buick, or another premium brand Karkiosk is a platform built for that purpose!
Karkiosk connects private buyers with private sellers throughout the U.S., allowing users to search for quality used vehicles listed by their owners and easily list their own vehicle for sale while completing their transaction with complete confidence.
Whether you are a buyer or seller, Karkiosk puts you in total control of the process, thereby allowing you to maximize the value of every deal you make.
Get to Karkiosk today and see why thousands of Americans are selecting the smarter, more economical alternative for buying and selling luxury vehicles privately.