What’s Better – New Car or Used Car?

New car or used car? Which is better deal?A couple of years ago (the “old days”) before the recent economic recession and car industry “crash”, it was nearly always a better idea to buy used cars instead of brand new.

It was a no-brainer.

Not anymore.

Used car prices, according to Automotive News, are the highest in years and will remain that way for the foreseeable future.

Why?

Because there’s currently a shortage of 2- to 5-year old used cars which makes them hard to find — which makes them expensive. In the recession, people are holding on to their cars and not trading them as often. Leasing hit a low point which means lease returns will decrease over the next few years. Dealers depend on lease returns and trades for their used-car inventory. Furthermore, last year’s “cash for clunkers” program destroyed many good used cars when they were eliminated as part of that program.

While used car prices are higher, new car prices are lower.

The past couple of years has been a time of unprecedented incentive programs on new cars. Manufacturers are offering huge incentives on not only last year’s models but also on brand new models. The incentives come in the form of cash-back rebates, low-interest loans, 0% APR loans, loyalty bonuses, special lease deals, and early lease return programs. Manufacturers are also putting significant money into “factory-to-dealer” rebates (marketing support) to help dealers give customers heavy price discounts that dealers could not otherwise offer on their own.

If you are still thinking the old fashioned way — that buying a used car is always a better deal than buying new — you would be well advised to do your homework before making a decision. In many cases, the old rules will still apply, especially if you buy an older used car that is in good condition. But if you are looking for a relatively new used-car, first make sure you can find the one you want, and then compare the price with the deal you can get on a brand new model of the same car. Even if there’s a price difference, consider the full new-car warranty, lemon law protection, and updated features of the brand new car.


Free New Car Price Quotes

You can get free price quotes on any new car from Edmunds.com.The quotes will automatically include any cash-back rebates and other incentives that are currently available from the car manufacturer.

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