Consumers Can Lower Car Payments by Trading in for a New Car, Advises

Consumers Can Lower Car Payments by Trading in for a New Car, Advises

Consumers Can Lower Car Payments by Trading in for a New Car, Advises

SANTA MONICA, Calif. — November 29, 2010 — Consumers driving three-year-old cars have the opportunity to get a lower monthly car payment by buying a new car, thanks to a downward trend in interest rates and an increase in used car values.

According to the analysts at, the premier online resource for automotive information, trade-in values for three-year-old cars were up 10.3 percent in October 2010 compared to October 2007, while interest rates on 60-month auto loans have declined from an average of 7.4 percent in October 2007 to 4.7 percent in October 2010. Analyst Ivan Drury pointed out, "By taking advantage of these unusual market conditions, consumers who purchased cars three years ago may be able to get top dollar for their trade-in, lower their monthly payments and get a new car — all at the same time."

A consumer who has a five-year $25,000 car loan at the average interest rate in October 2007 will spend $4,985 in interest while the current average rate would generate an interest charge of just $3,101. This reduces the monthly payment from $499.76 to $468.35. A consumer who qualifies for cut-rate financing would save even more. At the 1.9 percent interest rate that is being widely offered by automakers today, a qualified buyer with a $25,000 car loan will spend just $1,226 in interest, bringing the monthly payment to $437.10 per month. Consumers can crunch their own numbers using the free auto loan calculator at

"It is a terrific time to sell a used car since they are in high demand right now," noted Analyst Joe Spina. "That is especially true for cars that are three years old and newer since they often qualify for automakers' certified pre-owned vehicle programs, making them quite valuable to dealers who can sell them for a premium after certifying them."

Many new cars are actually less expensive than some one-year-old used cars. See a complete list at

For more car-buying tips, read Ten Steps to Buying a New Car at

The following three-year old vehicles are among those that lead their segments in average True Market Value® price increases since October of last year.

Average Used True Market Value®
Model October 2010 October 2009 Change
Chevrolet Suburban $26,398 $20,538 28.5%
BMW X5 $38,605 $31,084 24.2%
Chevrolet Tahoe $23,926 $19,771 21.0%
Jeep Wrangler $20,231 $17,096 18.3%
Hummer H2 $33,570 $29,478 13.9%
Toyota Tacoma $18,269 $16,317 12.0%
Hyundai Tucson $13,608 $12,202 11.5%
Dodge Dakota $14,884 $13,469 10.5%
GMC Canyon $14,746 $13,553 8.8%
Volvo V70 $21,309 $19,957 6.8%

The chart below lists year-over-year used car price increases by vehicle segment.

Average Used True Market Value®
Segment October 2010 October 2009 Change
Standard Compact $9,473 $9,238 2.5%
Premium Compact $10,564 $10,338 2.2%
Midsize $13,767 $13,628 1.0%
Standard Sport $15,559 $15,152 2.7%
Premium Sport $34,088 $32,168 6.0%
Fullsize $14,650 $14,175 3.4%
Standard Luxury $22,875 $20,621 10.9%
Premium Luxury $29,192 $28,717 1.7%
Compact Pickup $16,271 $14,460 12.5%
Fullsize Pickup $20,339 $19,112 6.4%
Mini SUV $16,144 $14,612 10.5%
Midsize SUV $18,403 $17,988 2.3%
Fullsize SUV $24,531 $19,483 25.9%
Luxury SUV $29,371 $26,690 10.0%
Mini Van $16,989 $15,784 7.6%
Fullsize Van $13,022 $12,140 7.3%

About Edmunds (

Edmunds publishes Web sites that empower, engage and educate automotive consumers, enthusiasts and insiders., the premier online resource for automotive information, launched in 1995 as the first automotive information Web site and hosts the most established automotive community online. Its mobile site, accessible from any smartphone at, makes car pricing and other research tools available for car shoppers at dealerships and otherwise on the go. is the most-read automotive enthusiast Web site. Its mobile site, accessible from any smartphone at, features the wireless Web's highest quality car photos and videos. provides insightful automotive industry commentary and analysis. Edmunds is headquartered in Santa Monica, California, and maintains a satellite office in suburban Detroit. Follow on Twitter@edmunds and fan on Facebook at

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