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For some cars, new really is cheaper than used

By Claes Bell · Bankrate.com
Saturday, September 4, 2010
Posted: 8 am ET

Remember the extensive discussion we had a few months ago about new versus used? Playing the role of the devil's advocate, I advanced the notion that with incentives and the rising cost of used cars, some cars might actually be cheaper to buy new rather than used.  What followed was a great conversation where a few people joined me, but most people found a lot of intelligent and well-reasoned ways to tell me I was wrong.

Well, Edmunds has given me a little ammo for the argument by compiling a list of cars it's cheaper to buy new than used when financed with the same length of loan. Of course, they make it a little easier on themselves than I did by comparing the cost of a new car to a used car that's only one year old and financing both with a 60-month auto loan, which will carry a significantly higher rate with a used car than a new one, but still the list is actually pretty long.

The common thread is that many of the cars have high resale values. Audi and BMW are well-represented, as is Mazda. The car you stand to save the most on by buying new is the Audi S4, a high performance-performance variant of the A4. The other cars on the list are those where your total outlay for buying a new over a used model is just a few hundred dollars over the life of the loan.

So what do you think? Does this list change your mind or am I still wrong?

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2 Comments
chris
September 06, 2010 at 7:51 pm

Another crazy post. The whole premise has artificial constraints such as only including 1 year old cars, taking out a loan, a used car loan having a higher interest rate than a new car loan, etc. No one in the car market is actually factually contrained by those parameters. This article and the Edmunds article amount to nothing more than unpaid advertising for car manufacturers masquerading as well thought out advice. I have a six figure income, but I've got about $15k worth of car sitting in my driveway split between 2 nice cars. Instead of car payments I have fully funded 401Ks.