New Car Deals That Are Better Than Used Car Bargains
Car buyers who are considering purchasing a used car instead of a new one should take another look at the survey conducted by Edmunds, the auto industry information company, that delved into the questions on new cars that may be less costly than used ones.
Report looked at vehicles across the automobile industry, from foreign to domestic . In some cases automakers subsidize the interest rate on new vehicles as an incentive for buyers to purchase. We have seen a lot of that lately, by automakers clamped by the financial effects of the credit crisis. In some cases automakers are offering as low as zero percent financing. Such is the case with Ford, GM and Chrysler.
Toyota, Honda and other foreign car makers are offering interest rates as low as 1 percent on some of their new models. Even luxury car makers like Audi and BMW are offering incentives on new vehicles that makes the deal much more attractive than used ones.
For instance, the payment on a new Audi S4 Premium Plus quattro 4dr Sedan AWD (3.0L 6cyl S/C 6M) is $832 while payment for used one is $895, a difference of $3,780 in total payment. The monthly payment on a new Cadillac CTS-V 4dr Sedan (6.2L 8cyl S/C 6M) is $961, while payments for a used Sedan is $1,014, a difference in payment of $3,180 for the total value of the loan.
Research indicates that the average price of a 3 year old used car is 11.1 percent higher than it was the year before. Currently used cars in general are 5.5 percent more expensive than they were in 2009. Due to the credit crisis used car looks more like a bargain to some customers, so there has been a spike in used car purchase.
Automakers have taken notice of this trend and are trying to capitalize on it. GM used vehicle prices have risen about 7.8 percent over last year. For example, a 3 year old Chevy Silverado 1500 truck has a price target that is 23.7 percent above that of last year. Even Honda used car prizes increase at about 2 percent.
It is important that car buyers do their research before making a determination between a used car or new car deal. Cost such as insurance and repair should be taken into consideration.
If a used car is selected, then it should be one that is relatively used and very reliable with a good resale value to avoid any possibility of an upside down car loan situation. Look for vehicles that are facing redesign or carryover. Ask the dealer of any incentives such as rebates, allowances, discounts, collections that may help to reduce the price of the vehicle
