Advisors might want to tell their clients to wait a few months before purchasing a pre-owned car with their tax refund.
Thousands of car shoppers use their tax rebate checks to purchase a pre-owned car between February and April, according to Black Book. The used-car valuation guide has tracked this trend over the years and found that prices traditionally peak in April and subsequently fall by July.
According to Black Book, the average price of an entry-level mid-size car this April is $10,741. If 2014 depreciation patterns follow last year’s trends, cars in this segment will fall -5.9 percent in value by July to $10,107.
Data on five popular car segments below show that car buyers who postpone the purchase could save hundreds of dollars.
|Segment||April ’14 Value||Projected % Decrease||Projected July ‘14 Value|
|Entry Mid-Size Car||$10,741||-5.9%||$10,107|
|Upper Mid-Size Car||$10,995||-3.5%||$10,610|