You may have heard the warning that a new car loses a great deal of value as soon as you drive it off the lot. If you’re looking for your next ride and want to avoid such a financial hit, perhaps it’s time to consider another option.
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According to Kevin Roberts, director of economic and market intelligence at CarGurus, the math on nearly new used cars is hard to ignore right now. Perhaps that’s one big reason why a 2026 report from CarGurus showed sales of nearly new used vehicles (two years old or younger) jumped nearly 24% year-over-year in the first quarter.
But are nearly new vehicles are good investment for retirees? Read on below to find out.
Available at Good Prices
“The median list price for a two-year-old used car is roughly $30,000, compared to about $46,000 for new, a discount of roughly 35%,” Roberts noted. “And if your budget is under $30,000, the new car market has largely moved on without you. The share of new vehicles available at that price point has dropped 60% in just five years.”
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Feature Modern Safety and Low-Mileage Options
But Roberts added that a one- or two-year-old used car in that range gets you a current-generation model with low mileage and modern safety tech — and someone else has already absorbed the steepest depreciation hit.
Avoid the ‘New Car Premium’
Andrew Lokenauth, founder of the blog Fluent in Finance, said buying a car that’s about two years old is one of the smartest financial moves a retiree can make.
“A new car loses roughly 20% of its value the moment it leaves the lot and by year two, that depreciation curve flattens out,” he said. “You’re letting someone else absorb that hit. On a $40,000 vehicle, that’s [over] $8,000 in value that just vanishes for the original buyer.”
When Lokenauth worked in banking and saw how retirees handled fixed incomes, he said the ones who stretched their dollars the furthest were the ones who stopped paying the “new car premium” and started letting depreciation work in their favor instead of against them.
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This article originally appeared on GOBankingRates.com: 3 Reasons Why Nearly New May Be the Best Vehicle Option for Retirees
