If you're looking for a used vehicle, fleet cars, trucks and vans are almost always an outstanding value. Unlike autos you'd buy from a private seller, or even a quality used car lot, fleet vehicles have been maintained meticulously and will have the records to prove it!
With this article we'll look into the numbers surrounding fleet vehicle purchases and explain why they're a solid investment.
Or check out Wilmars off-lease vehicle page to see available autos right now!
Whether you're interested in a personal vehicle or a work truck, know that any brand new vehicle you purchase will instantly experience depreciation the moment you drive it off the lot.
In other words, a brand new $50,000 vehicle becomes a $40,000 used vehicle the instant you leave the lot! And it will continue to decrease in value for the next twelve months, even if you barely drive it.
We think this NerdWallet.com article says it best: "Your car's value decreases around 20% to 30% by the end of the first year. From years two to six, depreciation ranges from 15% to 18% per year."
Generally speaking, during the first five years, brand new vehicles lose 60% or more of their original value. In the case of our $50,000 brand new car, that's a loss of about $30,000!
The depreciation issue leads to interesting insurance quandaries. When you finance a brand new vehicle, you'll usually be on the hook to pay for GAP insurance.
Using our $50,000 new auto example from above, let's assume you owe the full fifty grand on the vehicle. Auto insurance will only pay for the Blue Book value of the car, so if you get in a wreck next week and total the ride, your auto insurer will only pay the $40,000 depreciated value. Thus the need for GAP insurance on brand new vehicles. Your lender needs to know they'll be reimbursed in full for the loan.
GAP insurance isn't terribly expensive. It's merely an extra cost you'll need to absorb when purchasing a new car. But we have other financial points to make.
Your payment on a fleet lease vehicle will be considerably lower than the payment on a brand new vehicle. That's money you can take to the bank every month, or pay off the car or truck faster.
Once you've paid down the loan to the point you're no longer "underwater" or "upside-down" you have equity! In other words, the vehicle is worth more than the amount you owe on it. You can trade in that vehicle if you'd like, instead of a cash down payment on another car. Or you can keep paying it down until you own it outright.
Once you own a vehicle fully and have the pink slip in hand, you can save even more cash on insurance by increasing your deductibles or choosing to insure it with liability coverage only.
Here at Wilmar, our goal is to provide our customers with as many options as possible for their fleet leasing and personal auto purchase needs.
Contact us directly to learn about our off-lease vehicles for sale. They're in excellent condition and will save you money every month!
Related Reading & Resources: