New vs. Used
I heard a news report on the radio last week that implied new vehicle sales were up due to the high prices of used vehicles. I bought a pickup truck at the end of 2007. I curiously checked the Kelley Blue Book value of it 10 months later and was a little miffed to see the value of my truck had dropped almost $5,000. I just checked the value again and surprisingly it is hasn't dropped much over the past 3 years. Used vehicle prices are currently so high that in many instances it makes more sense to buy new. According to edmunds.com, in a typical economic climate, there is usually more value in buying a used car. However, the current economic climate is anything but typical. The deals on new cars are so enticing as to make buying a new car the better alternative over buying a certified pre-owned or a one year old car of the same model. There are also some pretty good perks to buying new such as warranty and interest rates. Below the same article on edmunds.com is a list of vehicles with lower than or similar monthly payments when comparing new and used vehicles. In our current economy, the prices of used vehicles are to the point where people are going to go with a substitute, which in this case has increased the quantity demanded of new vehicles.
Posted by Farva at 9/13/2011 09:46:00 AM