New cars may be a better deal than used ones

(MoneyWatch) The conventional wisdom is that buying a used car will save thousands of dollars over getting a new one. But in this market, new cars may be a better deal, says Kelley Blue Book.

Two years of rising used car prices have shrunk the differential between the cost of a new car and a similar one-year-old vehicle to a well-below-average 11.5 percent, according to the auto industry research firm. The difference is even slighter for subcompacts and compacts (5 to 7 percent) and hybrids and midsize crossovers (4 to 5 percent).

The difference can vary greatly by model. The smallest price gap found by Kelley is for the 2012 Chevrolet Camaro, at $26,180 -- only $126 more than a one-year-old model. A new Subaru Impreza sedan costs only $150 more than the one-year-old used equivalent. The differential is considerably greater for a 2012 Ford Focus -- $3,000 more than a 2011 model -- because the 2012 Focus is completely redesigned and much improved.

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In addition to justifying paying up for the new-car smell, the high cost of used cars can benefit shoppers in another way. For those who consider leasing, the high used-car residual value -- along with low interest rates -- make monthly lease payments unusually low. That shows up dramatically in the case of the Camaro, which carries payments of just $269 per month for 39 months and requires a relatively low $1,299 due at signing.

Among the best lease deals this August is the midsize Honda crossover CR-V, at $239 a month for 36 months with $2,799 due at signing, and the bigger GMC Terrain SUV. at $269 a month for 39 months with $1,519 due at sighing.

Lease deals from other companies include the just introduced 2013 Ford Escape crossover at $229 per month for 24 months with a $2,799 down payment. The Kia Optima sedan is offered at $189 per month for 36 months with $2,399 due at signing.

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    Jerry Edgerton, author of Car Shopping Made Easy, has been covering the car beat since Detroit companies dominated the U.S. market. The former car columnist for Money magazine and Washington correspondent for Business Week, Edgerton specializes in finding the best deals on wheels and offering advice on making your car last.

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