Those planning to buy a used car to save money may be making the wrong choice. The Carpocalypse has pushed some new cars to a point where they're actually cheaper than used.
Most automakers are sitting on top of a lot of inventory and are so desperate to move cars they're implementing massive rebates and lucrative financing deals, like Chrysler's employee plus-plus. At the same time, the used car market is heating up as people who would normally buy new are looking at other options, raising demand.
The Detroit Free Press did the math and discovered a certified-used 2008 Honda Accord EX on Edmunds.com goes for $21,544. A 2009 Accord EX? Just $21,464 after rebates. As dramatic as this difference is, the total cost difference in buying new versus used is even more surprising if you factor in the cost of financing.
The average rate on a 3-year used car loan is approximately 7.5% while many automakers are currently offering 0% to 1.9% financing for qualified buyers. Here's the math:
For example, a $30,000 car with an annual percentage rate of 2.9% would cost $662.70 a month over four years. By comparison, a used car with an APR of 7% would cost $718.38, a total of $2,673 more over the same period.
Those living on Craigslist and looking for a mainstream car should maybe consider visiting the dreaded dealer while the Carpocalypse makes everything cheaper.
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