Some New Cars Selling at Used Prices
If you've been shopping for a late-model used car, you may have noticed some 2015 and 2016 model-year vehicles listed with very low mileage - I'm talking below 100 miles on the odometer. Why are these vehicles on the used car market? Who would get rid of a brand new car after driving it for such few miles? And are these cars to be avoided, or do they present a good buying opportunity?
The practice of selling low-mileage used vehicles is referred to as "punching cars". It's a result of manufacturers encouraging dealers to buy their own cars in order to artificially inflate sales figures. This is a stupid practice for manufacturers and dealers, as it results in short-term benefits (increased fake sales), and long-term consequences (eroded brand image, lower residual values). But you, the car shopper - can benefit from their stupidity!
In 2015, there were over 250,000 "punched" cars. Some of these are legitimate used vehicles, such as loaner or demos, but many of these vehicles are basically new cars being sold as used.
The four brands that punch cars most often seem to be Kia, BMW, Nissan, and FIAT. A quick search on Cars.com shows over 2,000 late-model Nissan Altimas available on dealer lots, some with less than 10 miles on the odometer:
So do these vehicles present a good buying opportunity? The short answer is yes, but you do need to pay attention to how long the vehicle has been sitting on the lot. While the vehicle is pretty much "new", the warranty period starts on the day it was first "sold" - so keep that in mind.
Manufacturers encourage dealers to buy/sell these vehicles by offering large hidden incentives, so dealers do have more wiggle room to negotiate prices on these "punched cars". If you're shopping for a new car, I recommend you check out the used listings on the low-mileage alternatives to see what kind of deals you may be able to get.
Each week, I'll keep you up-to-date on the latest car deals and news that might affect your purchase. This includes...
- Best Rebates, Incentives, and Lease Deals
- Latest Car Buying Scams and Tricks
- The Best & Worst Time to Buy a Car
- Which Cars You Should Avoid