As a general rule of life, buying things used saves money. In fact, aside from a house or a nice bottle of scotch, things generally get less expensive as they age.
Cell phones, computers, clothes and cars are all good examples of things people can buy used to save a significant amount of money versus buying new. Cars especially. Only in some kind of bizzaro world would buying a used car cost more than buying a new one.
If we’ve learned anything the last couple of years, though, it’s that bizarre just might become the new reality. Better get used to it.
Automotive News reports that the cost of used cars is inching ever closer to that of new ones. The story references an Edmunds study that says the payment on a 2011 BMW 3 Series is just $34 more per month than for a 2010 model. It even says a 2011 Acura TL carries a monthly payment of $583, compared with $601 for a used 2010 model. Actual retail prices aren’t quoted, however, which would be a more reliable measure of car prices, considering interest rates and terms vary greatly between new and used car loans.
A new 2011 Acura TL with Technology Package carries an MSRP of about $39K, while a 2010 TL in Pennsylvania with 21,000 miles has an estimated value of $35K.
Those prices are certainly within shouting distance of one another, and once the higher cost of financing a used car is taken into account, the new version might indeed be the cheaper buy. I have yet to see a mainstream used car with a value higher than the new model’s MSRP, but who knows, it may be only a matter of time.
When shopping for a used car, always check DealFinder to find the Instant Market Value and compare that against the used inventory and even against new car prices. If you’re financing the purchase, you could find that buying new will actually save you a few bucks.
Would you buy a new car over used if it cost less over the finance term? If it were me, I’d just go a few years older and save some coin.