2011 Used Car Value Catches New Car Value In A Hot Car Market

by Don Elliott on March 27, 2012

Is it possible that buying a new car could actually be cheaper than buying a one-year old used car? Kelley Blue Book did some research and discovered that it is not only possible, but actually happening. The Kelley Blue Book research shows 10 cars worth consideration because of the trend. But before we get to that list, let’s take a look at what is going on in the new and used car markets that could cause such an anomaly. Three factors are shaping this unusual pattern; vehicle supply, gas prices, and pent up demand.

New car sales in the first quarter of 2012 are better than the sales rate before the 2008 economic meltdown. New car dealers are much healthier now than they were back then, having trimmed their fat during the lean years and refined their sales process. Day’s supply on dealer’s lots in March is a very realistic 48-days versus almost double that number four or five years ago.

The shortage of used cars created by bankruptcies, tsunamis, Cash for Clunkers, plant closures, and the economic meltdown forced prices up on good quality, late-model used cars. Art Spinella of CNW Market Research reports that used car transaction prices in March are the strongest that they have been in a year.

Spiraling gas prices caused a shift in demand by consumers toward more fuel-efficient vehicles. At the same time, manufacturers shifted production and improved the miles per gallon capability on some 2012 models.

Combine short supply and pressure to own a more fuel-efficient vehicle with pent up demand by many consumers who were unsure about their financial future and you have an interesting pricing dilemma.

Kelley Blue Book crunched the numbers to compare the cost to own a 2012 new vehicle, monthly payment plus fuel, versus a 2011 version of the same car, monthly payment plus fuel. The costs were very similar if not better in favor of the new car purchase.

Make and Model Miles Per Gallon 2012 Payment
plus Fuel
2011 Payment
plus Fuel
Cost Difference
Toyota Corolla LE 27 City/34 Hwy $434 $412 ($22)
Nissan Juke S 27 City/32 Hwy $519 $501 ($18)
Mini Cooper 29 City/37 Hwy $484 $468 ($16)
Nissan Cube 25 City/30 Hwy $416 $401 ($15)
Chevy Equinox LT 22 City/32 Hwy $589 $579 ($10)
Hyundai Elantra GLS 29 City/40 Hwy $435 $427 ($8)
Honda Civic LX 28 City/36 Hwy $424 $416 ($8)
Honda Civic Hybrid 44 City/44 Hwy $494 $490 ($4)
Volkswagen Jetta SE 24 City/34 Hwy $454 $450 ($4)
Subaru Impreza 2.5i 25 City/34 Hwy $444 $469 $25

 

So if you’re considering buying a new or used car, make sure to research the difference in cost. It may be worth your while to go with a new car even if the used car is in great shape.

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