2012: A Unique Year for Car Buying
When deciding to buy a new car one of the most important decisions is whether to buy new or used. When I Googled “buying new car vs. used” I first clicked on an article by the trustworthy consumer advocacy site, Consumer Reports, where they wrote “choosing a three-year-old car instead of a new one can save you thousands of dollars over the first five years.” Then I noticed the date the article was posted: October 2008. Since we’ve been living in a new economic reality for the past few years, conventional wisdom about car buying does not hold as true today as it did before the financial meltdown.
Under normal economic conditions, used cars are a better deal because they are cheaper to begin with, and depreciate less over time. However, lately several factors are making the monthly payments of some new vehicles competitive with that of used one or two year old models. Consumers are buying less new cars and more used cars during the recession. This has led to higher used car prices and made auto makers and dealerships more desperate to sell new cars. Auto companies began lowering prices and offering deals on new cars, such as cash incentives and zero percent financing, while dealerships became more eager to make a deal and flexible with combining promotions.
Projections for auto sales in 2012
Due in part to the recession and in part to the increased longevity of modern vehicles, the average age of cars on the road went from 8.4 years in 1995 to 11.1 years in 2011, according to analysis by the automotive research firm Polk. Many of the cars currently driven are fast approaching the end of their lifecycle.
An article by Automotive News reported that the National Automobile Dealers Association "expects fierce competition for new-vehicle sales as companies such as Toyota, Honda and Subaru -- which suffered supply-chain disruptions because of the earthquake and tsunami in Japan and flooding in Thailand last year -- get back in the market this year." Price competitiveness of new vehicles combined with the need to replace older vehicles is predicted to continue the rebound of new-vehicle sales from last year into 2012. Auto sales 2011 in the U.S. were 10% higher than in 2010, and analysts expect sales to rise about another 9% this year.
Why choose eco-friendly?
If you do decide to buy a brand new car this year, there are more eco-friendly options available than ever before. In 2012, hybrid options are becoming more mainstream; most major manufacturers will offer or announce a hybrid model this year. Also, there are several all-electric cars coming out this year from Nissan, Chevrolet, and Tesla as well as some of the luxury brands.
There are obvious reasons to choose an eco-friendly hybrid or electric car - reducing pollution and our dependence on foreign oil, less guilty trips to the gas station. Many customers that choose hybrids do so to make a statement, but there are also financial- and convenience-related reasons that customer satisfaction is high among hybrid owners and the hybrid market is growing rapidly. U.S. News & World Report points out that although the initial cost of hybrid vehicles is higher, lower fuel costs, cheaper car insurance, tax incentives, and free HOV Passes and parking passes in some states can help make up the difference (and then some).
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