New and used vehicles reverse roles in transforming auto market

In an economy turned upside-down, a brand new auto loan has become more affordable that buying used. Interest rates and incentives for new autos have created situations where time-honored advice on vehicle purchases might not apply. Depending on the make and model, there are some automobiles that actually cost less over time when bought brand new instead of used. This makes it easier than for those who take out installment loans for their vehicles.

What all of the free financing auto loan companies are offering

It is sometimes a better idea to get a brand new vehicle loan than a used vehicle loan unless you’ve quick money to pay. The recession brought on loan rates to go down a lot. That means that they are nevertheless just as low for new vehicles. In Dec., the average rate for a car loan was 4.16 percent. This is what Edmunds.com reports. Over 15 percent of auto loans do not even have interest though. General Motors, which is showing signs of life after a notorious government bailout, offers 0 percent funding on 50 percent of its auto loans. However, 0 percent funding isn't for every person. Strong credit is needed to qualify for such a sweet deal, to the tune of a FICO score of at least 650 and sometimes above 700.

Having cheaper brand new automobiles than used cars automobile

There are about 8 percent interest rates for used automobiles at this time although brand new cars are around 4 percent. There have been several reasons leading to there being less of a price gap between brand new and used automobiles too. There was a "cash for clunkers" program that took about 700,000 automobiles off the industry. This was in 2009. The amount of used vehicles being traded in has been affected by the financial crisis. With the way a new car is made to have such cheap deals with a five year loan, a one year old car is probably going to be more expensive than a new model.

How do I know which new cars are less expensive?

To make a list of brand new automobiles that are cheaper than used vehicles, Edmunds.com compared the average used vehicle rate of interest of 7.7 percent with a 0 percent brand new car loan accessible for certain models. There were several incentives added with auto loans being in five year terms. On the list it showed the Audi S4 Premium Plus Quattro Sedan saving $1,020, the savings of $1,320 with the Honda DR-V EX and the saving of $1,320 with the Toyota Motors FJ Cruiser base model.

Information from

Market Watch

marketwatch.com/story/story?Guid=94f611d3-aa3c-4b21-b432-90910a50e8e0

Money Watch

moneywatch.bnet.com/saving-money/blog/cars-money/flash-new-cars-cost-less-than-used-cars/460/

Edmunds.com

edmunds.com/car-news/new-vs-used-car-buying.html