David Ruebush

I was driving down IH-35 yesterday when it hit me. As I drove past a local Chevrolet dealership, I noticed a Tahoe with a sticker on the windshield that read “$7,800 off”. This was just one of the many amazing price reduction stickers blanketing the windshields of new Chevy’s along the highway. Car after car, dealership after dealership, new car prices are falling.

Have you been considering a used car? After reading this, you may want to think new. When you add auto maker requirements to increase sales volumes with the topsy turvy economy, you get an interesting result, a rare occasion for car shoppers. Edmunds.com says it may be cheaper to buy a new car now than a used car of the same type, according to a recent study.

Auto lenders have been constraining their lending requirements over the past 18 months because of the fitful economy, which has caused a great deal of car shoppers to enter the used car market. Common sense says when there is a rise in demand, there will normally be a rise in prices. As a matter of fact, the average 3-year-old used car’s price has gone up 11.5 percent from last year. All the while, in the midst of increasing used car values, new car makers are chopping prices.

As I studied this concept further, I found some interesting information. There are now 41 new vehicles that cost less to buy new than used, when you compare a new model to a one year old vehicle, make zero down payment, and finance the purchase for 5 years, according to the Edmunds.com study. The same study also reveals 93 other new car models that are no different in cost whether you buy new or used. What does this mean to you? You should research before you buy. There are some very good deals out there for you to find.

Recent numbers released from Detroit show the U.S. new car market may be stalling. While most manufacturers are reporting sales that are higher this June compared to last year, they are falling short of March, April, and May. Toyota’s sales fell 14 percent compared to May. GM’s sales are off 13 percent, and Ford’s sales are off 11 percent.

Both analysts and auto manufacturers have made recent statements that show they feel the lackluster new car market recovery may be shutting down. The auto industry is approaching tomorrow with apprehension and questions while buyers keep expressing fear, lenders keep tightening their belts, and the economy keeps acting sketchy. Noone seems to know what tomorrow brings. Therefore, it remains expected the industry will continue to slash prices.

Paul Taylor, chief economist of the National Automobile Dealers Association says the gap between new and used cars that has been narrowing for the past 18 months will continue for “at least another year” in an article by Gregory Karp in the Chicago Tribune. So, if your finances or fears of the economic future are making you think used, you should do your homework. New may be a better choice.