Last Updated Apr 22, 2010 11:37 AM EDT
Thanks to the avalanche of 0% financing from dealers, many new models now boast lower monthly payments and total financing costs than their one-year-old counterparts. And no, not all of them are Toyotas.
To compare the cost of new cars with their one-year-old equivalents, Edmunds.com analysts made these assumptions: All the loans, new and used, are for five years. All used-car loans are figured at the average used-car rate of 7.7%. (There are no incentives.) Each new-car loan was computed with the 0% or low-rate loan specific to that model.
In dissecting the market, Edmunds found that 22% of new cars bought with loans in March had 0% financing; that's an all-time high. For Toyota, which launched the cut-rate financing campaign to overcome its recall woes, an astounding 71% of financed sales came with 0% loans.
If you're attracted to 0% financing, remember that you must have strong credit to qualify for those deals. That translates to a FICO score of at least 650 and often over 700. "Shoppers should always check their credit score and secure financing from a bank or credit union before setting foot in the dealership so that they have a back-up plan if they get declined for the special deals," says Philip Reed, Edmunds.com senior consumer advice editor.
If you qualify for the alluring finance deals, here are four striking comparisons favoring the new models over the certified one-year-old versions of the same models. (Certified cars must have a thorough dealer inspection and usually carry a added warranty of one year or more.)
Honda Odyssey. Honda offers a broad range of promotional financing (See 4 Sizzling Car Deals Now.) and Edmunds.com says payments on the 2010 Odyssey minivan would be $545 (with 2.9% financing) vs. $573 for the used version, for five-year savings of $1,680. Reviewers have long ranked the Odyssey, with a recent average sale price of $30,225, the best-driving minivan, as well as comfortable and family-friendly.
Mazda CX-9. Mazda gave 58% of its buyers 0% financing in March. Among the best deals, the Grand Touring version of the 7-seat CX-9 SUV, boasting monthly payments of $521 for the new car (with 0% financing) vs. $582 for the used one-a total savings of $3,660. Reviewers like its exterior design and nimble performance as a rare car-based crossover in the large SUV class. The CX-9, with a list price of $32,815 for the Grand Touring, gets 22mpg highway, 16 city with its V-6 engine.
MINI Cooper Clubman S. This station wagon version of the MINI with clever under-floor storage sports $416 monthly payments with promotional 1.9% financing vs. $441 for the used version, for five-year savings of $1,500. The wagon, with a list price of $24,050, is just as much fun to drive as all MINIs, and its four-cylinder engine saves money on gas, with EPA ratings of 34 mpg highway, 26 city.
Porsche Cayenne S. Buyers with expensive taste and wallets to match might consider the $60,700 Cayenne S SUV, which comes with monthly payments of $1,048 (with 1.9% financing) vs. $1,136 for the used version-a total five-year savings of $5,280. Reviewers say this is the SUV for buyers who would rather be driving a sports car. If you can afford the payments, you probably won't mind putting up with the middling gas mileage for the 385-horsepower V-8: 19 mpg highway, 13 city.
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