Best Deals – New or Used?

Do you get the best deals on brand new cars or on used cars?

best car leasesIt might seem to be an obvious answer — that used cars are always better deals. But that’s not always true.

Used cars seem to be better deals in the sense that you pay less than for a brand new car of the same make and model. It’s common knowledge that new cars rapidly depreciate in value and if you can buy a used version of the car, you avoid suffering the high initial value loss.

In a simple world, this might be good logic. However, it’s not a simple world and there are a number of other factors that come into play when considering a used-versus-new decision.

Although it would be a rare situation if a used car cost the same or more than a brand new car of the same make and model, it is very possible that when a bad deal on a used car is compared to a great deal on a new car, the new car deal provides more bang for your buck and can be a smarter buy.

So what’s happening right now in the car world, and how does it affect new and used car deals?

At the time of this writing, two important factors are affecting the used-versus-new situation.

First, new-car sales are hot right now, being driven by generous incentives from dealers and manufacturers. These incentives come in the form of cash-back rebates, conquest bonuses, trade bonuses, low interest loans, and great lease specials. Large rebates can lower the effective purchase price of a vehicle by thousands of dollars.  Nearly every car company is participating, every month, across a broad selection of their product line. Dealers are willing to pitch in with good price discounts as they compete with other dealers and strive for monthly sales goal bonuses from car companies.

In some cases, with certain makes/models vehicles, a brand new model can be purchased for about the same deal as a used model that is a year or two old. When you consider that fact that you get a full manufacturer’s warranty, lemon law protection, free maintenance (for some), and the newest technology and safety features, it makes for a no-brainer decision for those particular vehicles. Of course, this kind of deal is not always available, for every vehicle, from every car company.

Second, at this time, used cars prices are falling. Prices fall when supply exceeds demand, which has been caused by a flood of recent lease returns and trades from consumers moving up to new cars as the economy improves. Dealers who have a surplus of used cars are willing to make good deals to get those cars off the lot. This is a little different than the last few years when dealers suffered a shortage of used cars and prices remained high.

The net effect of these factors is that there are some great deals on BOTH brand new cars AND on used cars. Of course, this is a generalization that may not apply to every car, every dealer, in every part of the country. However, it does mean that getting a good car deal — either new or used — is not especially difficult at this time. A little research, shopping patience, and negotiating skill will go a long way to making it happen.

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