A friend of mine alerted me to a radio article by NPR about how some new cars are cheaper than used cars.  I’m always up for a good debate, so let’s have some fun and debunk the claim that “Some New Vehicles Selling For Less Than Used Ones.”

Claim #1: “Some new cars are actually cheaper than used…”

• Truth Meter: Low
• Comment: This is true only under certain conditions. As a used car buyer, you CAN always pay more than a new car but you would only do this if you got tricked into paying too much!
• Reality: Used cars are still much cheaper than new cars. The idea that new car prices are plummeting and therefore making used cars relatively more expensive makes little sense. Car pricing is partly based on the price of similar alternatives. Therefore, if new cars prices come down, used car prices follow suit.

Claim #2: “Honda Civic Hybrid” is an example of a car where the new car is cheaper.

• Truth Meter: Even Lower
• Comment: A new Honda Civic Hybrid will cost you about $21,000 plus tax, title, and license. This is more than $3,000 less than the suggested retail price. However, I just used Carsala to do a price check, and I can buy a 2007 or 2008 for $17K (19% cheaper). Even better, I found the following ad on AutoTrader. It’s a Certified Pre-owned (CPO) car and the asking price is $1,000 less than the new car price. CPO means the warranty will be extended by one year and 12,000 miles so it has the same warranty as a new car.

Claim #3: Used cars are getting more expensive because if you’re “not producing as many new cars, then you’re not producing as many used cars.”

• Truth Meter: Very Shaky Grounds
• Comment: The statement if taken entirely literally is true. However, the used cars you want to buy now are two years old (see here for why), and the current decrease in car production will have minimal effect on the used car market. How many people are in the market to specifically buy a used car that is only three months old? Hogwash.

Claim #4: To buy a new car you will have to do some “serious research”, “shop well for financing rates”, and shop for “deals in your area.”

• Truth Meter: Finally something true!
• Comment: Buying a new car is a colossal pain. For me, it ranks with getting ALL my teeth pulled – without a painkiller. Read my past post about The Top 10 Things a Dealer Absolutely Won’t Tell You in case you need to be reminded about what car dealers will do and say to make as much money as possible from you.
• Reality: Buying a used car is much easier. With Carsala, all you need to do is (1) choose the car, model year, features and colors that you prefer, then (2) let Carsala find your cars and negotiate a price of up to 25% off Blue Book, then (3) inspect and drive the car in person, with the option of buying at the Carsala price. It doesn’t get much easier than this…