Used Cars Not Always Cheaper Than New, Edmunds Says


  • 2014 Mazda 2 Picture

    2014 Mazda 2 Picture

    For a Mazda 2 Sport, the typical monthly payment when new is $242, compared with $255 for a certified pre-owned version. | December 26, 2013

Just the Facts:
  • Used cars are not always cheaper than new cars, especially when the economic climate is as unusual as it is now, according to Edmunds.
  • The deals on some new cars are so generous, they actually make a new car less expensive than both a one-year-old used and certified pre-owned version of the same model.
  • Automakers and dealers expect to keep new cars selling, so expect a plentiful number of deals this holiday season.

SANTA MONICA, California — Used cars are not always cheaper than new cars, especially when the economic climate is as unusual as it is now, according to Edmunds.

"The deals on some new cars are so generous, they actually make a new car less expensive than both a one-year-old used and certified pre-owned version of the same model," Edmunds said in a new survey on car buying.

Senior Analyst Jessica Caldwell observes: "Automakers and dealers expect to keep new cars selling, so expect a plentiful number of deals this holiday season."

To illustrate this point, Edmunds compared the vehicles' True Market Value transaction prices and typical interest payments. Because used/certified pre-owned cars are generally financed at a higher rate than new cars, a shopper can actually save money in some cases by purchasing a new vehicle instead of a used version.

Among the examples cited are a Volkswagen Jetta GLI, whose typical monthly payment when new is $389, compared with $390 for a one-year-old version.

The typical monthly payment on a new Honda CR-V EX is $433, compared with $434 for a certified pre-owned version. For a Mazda 2 Sport, the typical monthly payment when new is $242, compared with $255 for a certified pre-owned version.

The list of new cars cheaper than their used counterparts has dwindled over the years due to softening used-car prices, Caldwell said, but there are still some good deals.

Edmunds assumed a 60-month loan term, no down payment with a typical finance rate for new cars and a typical finance rate for one-year-old used cars. Edmunds added in destination charges and gas-guzzler taxes as appropriate.

Many of the year-end deals continue to January 2.

Edmunds says: Don't make the assumption that a newly used vehicle is always a better deal than a new car.

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