Why It’s Time to Snap Up a Good Used Car

What's Hot

2 Types of Black Marks Might Vanish From Your Credit File SoonBorrow

6 Ways the Obamacare Overhaul Might Impact Your WalletInsurance

7 Dumb and Costly Moves Homebuyers MakeBorrow

This Free Software Brings Old Laptops Back to LifeMore

Obamacare Replacement Plan Gets ‘F’ Rating from Consumer ReportsFamily

Beware These 12 Common Money MistakesCredit & Debt

21 Restaurants Offering Free Food Right NowSaving Money

17 Ways to Have More Fun for Less MoneySave

House Hunters: Beware of These 6 Mortgage MistakesBorrow

30 Household Uses for Baby OilSave

25 Ways to Spend Less on FoodMore

Nearly Half of Heart-Related Deaths Linked to These 10 Foods and IngredientsFamily

5 Surprising Benefits of Exercising Outdoors in WinterFamily

10 Ways to Save When You’re Making Minimum WageSave

Boost Your Credit Score Fast With These 7 MovesCredit & Debt

7 Painless Ways to Pay Off Your Mortgage Years EarlierBorrow

The Most Sinful City in the U.S. Is … (Hint: It’s Not Vegas)Family

The True Cost of Bad CreditCredit & Debt

10 Companies With the Best 401(k) PlansGrow

This Scam Now Tops ID Theft as the No. 2 Consumer ComplaintFamily

6 Stores With Awesome Reward ProgramsFamily

6 Ways to Save More at Lowe’s and The Home DepotSave

6 Healthful Treats for Your DogFamily

New Study Ranks the Best States in the U.S.Family

Thousands of Millionaires Moving to 1 Country — and Leaving AnotherGrow

Strapped for College Costs? How to Get the Most From FAFSABorrow

6 Overlooked Ways to Save at Chick-fil-AFamily

Ask Stacy: What’s the Fastest Way to Pay Off My Mortgage?Borrow

Where to Sell Your Stuff for Top DollarAround The House

8 Ways to Get a Good Price on a Shiny New AutoCars

Ask Stacy: How Do I Start Over?Credit & Debt

Secret Cell Plans: Savings Verizon, AT&T, T-Mobile and Sprint Don’t Want You to Know AboutFamily

30 Awesome Things to Do in RetirementCollege

14 Super Smart Ways to Save on TravelSave

The Rich Prefer Modest Cars — Should You Join Them?Cars

You’ll Soon Pay More to Shop at CostcoSave

10 Ways to Save When Your Teen Starts DrivingFamily

A flood of previously owned cars is about to hit the market and drive down prices. Here's what to look for.

If you dream of finding a nice used — but not abused — car at a reasonable price, it is just about time for you to shop.

Auto dealers expect a flood of used cars­ – about 800,000 – to come into dealerships this year as a record number of leases mature, according to NADA Used Car Guide, a Division of J.D. Power. The influx of such “pre-owned” cars – adding about 33 percent to what is currently available — is expected to continue through 2018.

That influx is expected to drive down used-car prices to more reasonable levels from previous highs. Used-car prices hit a record high in the second quarter of 2015, climbing 7.6 percent year-over-year to an average of $18,600, according to a new study by car shopping site Edmunds.com.

“The key factor driving all of the trends in used-car sales today is the popularity of leasing, which is bringing younger and higher-quality used cars back to the market,” said Jessica Caldwell, Edmunds.com director of industry analysis in a press statement. “With a record number of lease terminations expected in 2016, for the foreseeable future there certainly will be no shortage of supply to meet the growing demand for used cars.”

NADA estimates the prices of used cars will fall 2.5 percent annually for the next three years. That would be down 7.3 percent in 2018 from 2015. This drop would mean that used-vehicle prices would be at their lowest point since 2010.

Why you should buy used

You already know that low mileage, good condition pre-owned vehicles at reasonable prices save you money for several reasons — not least of all because they don’t suffer the sharp depreciation that new cars incur the moment they are driven off the lot.

And there’s even more good news this year because the off-lease and fleet vehicles that will soon be for sale are expected to have low mileage and a history of proper maintenance. In fact, some are from corporate fleets. That means many qualify for automaker’s CPO (certified pre-owned) programs and come with detailed inspections and extra one-year warranties, reported NADA.

So what can you expect to find on the lots?

Some of the best deals will be on subcompact and compact cars as well as some compact and midsize SUVs.

Lease maturities for compact SUVs will more than double (a 116 percent increase) in 2017, according to NADA. Off-lease supplies of vehicles will also grow for midsize SUVs (57 percent), compact SUVs (44 percent) and midsize cars (23 percent).

Based on Forbes’ list of the most unbeatable car leases in 2013, shoppers can expect to find an array of pre-owned models ranging from Audi A5 to Chevrolet Corvette and Honda CRV.

It’s a fair bet a hefty number of pre-owned Toyotas and Chrysler will also be on the market. In 2014, Automotive News reported those two automakers saw a strong shift in two-year leases. Ford and Nissan both saw a shift away from such short leases during that time.

But don’t expect everything to be sold at rock-bottom prices. Perennial favorites, such as the Chevrolet Corvette and Ford’s F-150 trucks, will likely retain their value and sell quickly due to demand.

“Low gas prices are making larger vehicles more appealing, to the detriment of smaller cars,” said Jessica Caldwell, an analyst with the auto research website Edmunds.com, told the New York Times.

Luxury will be in the mix

Besides Lexus, which is owned by Toyota, there will be plenty of other pre-owned luxury cars on lots, auto analysts predict.

Mercedes-Benz USA is among the automakers that expect a flood of off-lease vehicles, remarketing manager Stephen Nicholson told Automotive News. Mercedes-Benz dealers will get first crack at selling those cars, but Nicolson said the volume would likely force the automaker to sell off-lease vehicle through non-Mercedes dealers.

“We’re going to have something like 200,000 units coming back at some point,” Nicholson said according to Automobile News. “We’ve been leasing at 40, 50, 60 percent for a long time.”

And BMW will surely be in the pre-owned mix, Industry analysts reported BMW held onto the top spot in U.S. luxury car sales last year because of the incentives it offers dealers to buy the latest models for their fleets of loaner vehicles, reported Automotive News. As new models roll in the automaker will surely nudge dealers to swap out older models.

Special programs

Automakers and dealers are expected to pull out plenty of stops to move the pre-owned cars.

Although many deals are not yet public, one major example began this month. GM started a new sales program for its factory-owned used cars.

If you’re interested in what GM reports are more than 30,000 such pre-owned Chevrolet, Buick, GMs or Cadillac can click here. The cars have fewer than 37,000 miles and come with extended warranties. The vehicles are company owned, are coming off lease or are coming from rental company use.

The automaker said the program also includes a three-day or 150-mile exchange, three-month trial of OnStar’s Guidance Plan and come with roadside assistance and free transportation during the warranty.

Before you buy

It’s easy to get caught up in the excitement of buying any car, but it’s especially important to go through these steps when buying a used car.

And don’t forget these two additional steps:

  • Compare finance rates. Sometimes finance rates for used cars — depending on a host of variables including the buyer’s credit score — are much higher than for new cars. Also, some new cars are offered with attractive rebate offers. Don’t forget to factor in all of the specifics.
  • Calculate depreciation. If you’re tempted to buy a new car instead of a used one, be sure to factor in depreciation costs. Kelley Blue Book has a guide that will help you determine the true cost of your purchase. And check out “8 Ways to Get a Good Price on a Shiny New Auto.”

What’s your experience shopping for used cars? Share with us in comments below or on our Facebook page.

Stacy Johnson

It's not the usual blah, blah, blah

I know... every site you visit wants you to subscribe to their newsletter. But our news and advice is actually worth reading! For 25 years, I've been making people richer without making their eyes glaze over. You'll be glad you did. I guarantee it!


Read Next: 8 Great Travel Freebies You Can Get in 2017

Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 2,018 more deals!