New vs Used
It used to be that if you were short on cash and needed a new car, a used car was the way to go. That may not be true in many cases anymore. Kimberly Johnson of The Associated Press wrote an article that I found on detnews.com. The reality is that dealers are so desperate to make a sale these days that they are offering rebates and incentives that may make the prices lower in many cases than used cars. The interest rates are lower for new cars as well. Here’s an example. According to Edmunds.com, the average cost of a used 2008 Honda Accord EX sedan certified by a dealership was $21,544 earlier this month, whereas a new 2009 Honda Accord costs $80 less. If you take an example of the difference in finance rates between new and used, you would see that many times it’s cheaper to buy new as well. For example, a $30,000 new car at 2.9 APR would cost $662.70 over four years. For a used car at $30,000 with a 7% APR, the cost would be $718.38, a total of $2673 more over four years. Why would you buy used then? Obviously, this is not the case for every make and model, but if you do enough research when it’s time to buy a car, you can definitely find the new cars to buy instead of buying used.