When it comes to purchasing a vehicle, one of the most significant decisions you'll face is whether to buy new or used. As we approach the end of the summer, the next model year is winding down, and enticing deals are being offered at every turn. In these robust economic times, does the conventional wisdom still hold true that it's cheaper to buy used rather than new? Our analysis provided a fresh and surprising perspective.
Deciding between a new or pre-owned car is a common dilemma for many buyers. As the new model year approaches, dealerships offer tempting deals. But is it truly more economical to buy used? Our detailed analysis of popular 2012 model-year sedans and SUVs compared to their 2011 and 2008 counterparts reveals some surprising insights. We crunched the numbers, considering factors like mileage, warranty, and financing rates, to help you make an informed decision.
To provide a comprehensive analysis, we examined current offers for several popular 2012 model-year sedans and SUVs and compared them to used-car prices for the same models from 2011 and 2008. In some cases, with a slight increase in monthly payments, you can get a brand-new vehicle with zero miles and a full manufacturer warranty.
For instance, let's look at the Ford Fusion and Chevrolet Malibu sedans. The 2012 models have an average of 28,500 miles, while the 2008 models have around 48,500 miles. Monthly payments were calculated assuming a 10% down payment on a 5-year loan. For new cars, the price listed is the MSRP before incentives; for used cars, the chart shows the retail price. The estimates are based on the average New York metro-area financing rate of 3.365% for new cars and 3.310% for used cars, according to Bankrate.
| Model | Year | Mileage | Monthly Payment | Warranty |
|---|---|---|---|---|
| Ford Fusion | 2012 | 28,500 | $534 | 3-year, 36,000 miles |
| Ford Fusion | 2010 | 48,500 | $505 | Limited |
| Chevrolet Malibu | 2012 | 28,500 | $520 | 3-year, 36,000 miles |
| Chevrolet Malibu | 2010 | 48,500 | $490 | Limited |
The 2012 models of these SUVs also show interesting trends. For example, the 2012 Acura MDX would cost $534 per month, while the 2010 model would be $505. For an additional $29 per month, totaling $1,766 over the loan term, you get a full 3-year, 36,000-mile warranty.
However, opting for the 2009 Ford Edge might be a better financial decision, offering over $8,000 in savings and $119 less per month, which can offset the mileage and maintenance costs.
| Model | Year | Mileage | Monthly Payment | Warranty |
|---|---|---|---|---|
| Acura MDX | 2012 | 28,500 | $534 | 3-year, 36,000 miles |
| Acura MDX | 2010 | 48,500 | $505 | Limited |
| Ford Edge | 2009 | 48,500 | $415 | Limited |
While the out-the-door cost is a natural focus, don't look solely at the purchase price. Consider how much the car will cost to own over time. Factors like depreciation, insurance, financing, fuel costs, and other operating expenses can quickly add up and may make that bargain not so appealing in the long run.
New cars typically lose 20-30% of their value within the first year. According to Edmunds, a new car loses about 60% of its value after five years. This rapid depreciation can make used cars a more financially sound choice.
Insurance rates are generally higher for new cars due to their higher replacement value. According to NerdWallet, the average annual cost of insuring a new car is about $1,674, compared to $1,325 for a used car.
Interest rates for new car loans are often lower than those for used cars. However, the total amount financed is usually higher for new cars, which can offset the lower interest rate.
These case studies illustrate that, particularly at the end of the model year, the deals available can make buying a new car worth considering over a used one. However, it's crucial to do your homework. There isn't a one-size-fits-all answer that suits every scenario.
In summary, while new cars offer the allure of the latest features and full warranties, used cars can provide significant savings. Weighing the total cost of ownership, including depreciation, insurance, and financing, will help you make the most informed decision.
By considering these factors and doing thorough research, you can make a more informed decision that best suits your financial situation and driving needs.
How to Instantly Lower Car Windows Using Your Key Fob
Unlocking your car and rolling down the windows before you even get inside can be a game-changer, especially on hot days. This little-known feature, available in many modern vehicles, allows you to cool down your car without having to open the door first. Here's how it works and why you should start using it.
The Ultimate Guide to Instantly Lowering Car Windows with Your Key Remote
On scorching sunny days, the interior of your car can become unbearably hot, regardless of the outside temperature. When you approach your vehicle and find it sweltering, the first thing you likely want to do is lower the windows and crank up the air conditioning. However, did you know there's a convenient feature that allows you to start cooling your car without even getting inside? This feature, which has been around for years but remains unknown to many car owners, enables you to lower your windows using your key remote.
The Best Way to Instantly Lower Your Car Windows Using the Key Fob
Discover a hidden feature in many modern cars that allows you to lower your windows remotely using your key fob. This handy trick can help cool down your vehicle before you even get inside, making those hot summer days a bit more bearable.
