Some New Cars Cheaper Than Used Now, Hybrids Included, Edmunds Study Finds

Some New Cars Cheaper Than Used Now, Hybrids Included, Edmunds Study Finds

Car prices are falling, we all know that, but did you realize that for some makes the declines, combined with the industry's ubiquitous cut-rate financing offers, has made it cheaper to buy new than used?

A just-released study by Edmunds.com's analysts shows that shoppers who may think the budget will only stretch to cover payments on late model used vehicles could, with a little research, find themselves in a new model for lower overall costs if they are financing rather than paying cash.

Mostly, the findings apply to conventional models, although many of those are fuel-efficient compacts. But there are even two hybrids in the mix.

Yup, the price on the window of that brand new, 2009  Honda Civic Hybrid (above, left) may be a lot higher than what's being asked for a year-old "previously owned" model (below, right), but the new Civic Hybrid comes with a national interest rate deal that means a savings of nearly $2,000 over the year-old model in the course of a 60-month loan.

To compute potential savings, our analysts used the Edmunds True Market Value ® - what people are really paying - rather than the sticker prices and figured a 10.5 percent annual percentage rate on the used car loans. New car loans were figured at a national average of 5.9 percent, and where a national interest rate discount is being offered - as with the Honda Civic Hybrid - it was applied instead of the higher, 5.9 percent rate.

(Incentives can change from region to region. For the most up-to-date information abut deals and discounts in your area, check Edmunds' incentive finder.)

In the case of the Civic Hybrid, the new '09 model has a True Market Value® of $21,788, the use '08 model a TMV of $20,167.

Because of the higher interest on a used car loan, the new hybrid would be $795 less expensive than the used model over a 60-month loan even if Honda weren't offering a discount interest rate on new-car financing. With that rate the savings jumps to $1,991.  

The other hybrid deal is the 2009 Nissan Altima Hybrid, which has a national average TMV of $26,036 versus $22,184 for an '08 model on the used car lot.

Our analysts found that while there would be no savings in Nissan weren't offering a discounted interest on the new model, with that discount a buyer would save an average of $609 by picking new over used.

To see the full list, which includes 18 makes from six automakers (Audi, BMW, Honda, Mazda, Mitsubishi and Nissan) hop over to our sister blog, Edmunds AutoObserver.

And remember, even when shopping for advanced technology "green" vehicles that typically cost more than their conventional counterparts and don't come with big discounts, it pays to dig deeper than the MSRP.

"Never underestimate the cost of the interest on a loan, and never forget that if you have decent credit, you may be able to negotiate the interest rate you are offered," recommends Philip Reed, Edmunds.com's senior consumer advice editor. "Car shoppers should look at all the costs of buying a car, not just the purchase price."

John O'Dell:  is an AutoObserver Senior Editor. Follow @AutoObserver on Twitter.