9/1/2023 0 Comments Edmunds new car pricesGenerally speaking, you have to start a new lease-or-buy cycle.īut if you'd bought a new car and were now at the end of the ownership cycle, you'd have a 6-year-old vehicle that would have about 72,000 miles on the odometer. Here is something essential to remember about the apparent lower cost of leasing versus buying new: At the end of a leasing cycle, you don't own the car. These factors result in a monthly payment of $356. The interest rate for used car loans is usually higher than for new, and in our case it would be about 7.9%. The average interest rate is 3.9%, resulting in a monthly payment of $482.īuying Used: The average amount financed for a 3- or 4-year-old compact SUV is $19,331, with an average down payment of $2,771. We used the same numbers for the second three-year lease.īuying New: The average amount financed for a new compact SUV is about $28,905, with a down payment of $3,847. This results in a $360 monthly payment for three years. For the lease's interest rate, better known as the money factor, we've used the average amount: 0.009583. Leasing: The average lease cost is based on a compact SUV that sells for $28,633 and has drive-off fees of $1,981. You can see the other assumptions behind these examples at the end of the story. To match that period, we are basing the leasing example on two back-to-back three-year leases, totaling 72 months. That's the length of ownership we are assuming here. keeps a vehicle for 79 months - just over 6.5 years. To compare the costs of leasing, buying new and buying used, we'll use a popular vehicle in our examples: a compact SUV. If a low monthly payment is your primary goal, leasing might be the best approach. If you want the latest technology or like getting into a new car every three years, buying new or leasing is the route to take. Car-by-car details of CR’s ‘best value’ calculations are available only to subscribers, but you can check out the basic ranking on its website.Used cars aren't for everyone, however. You can check out ’s ‘true cost to own’ findings for the 2009 Prius Touring model for free on its website. Real-world experience can be an important guide - but don’t let one owner’s experience totally determine your choice. Then you can cross-check the cheapest vehicles against CR’s ‘best value’ rankings to make sure you’re not about to saddle yourself with a real stinker of a car.Īnd if you know somebody who owns the car you’re interested in, ask what it costs them to own and operate the vehicle. So whom do you believe? If you’re looking for a new car and parsing ownership costs down to the last dollar keeps you awake at night, you might start by checking the ‘lowest cost’ rankings to get a fix on which vehicles are the absolute cheapest in dollar terms to own and operate. The publishers of Consumer Reports ‘seem to think that their editors should do it for you.’ ‘We feel consumers should determine’ which vehicle best suits their needs, Anwyl said. The folks at, meanwhile, detect a bit of nannyism in CR’s implied mission of protecting consumers from themselves. ‘To suggest that people should look at a Chevy Aveo just because it’s cheaper to own doesn’t really help consumers out much.’ ‘It was slow, it wasn’t very fuel efficient for its class, and its emergency handling was not very good. 2 car in Edmunds’ ‘small sedan’ rankings is the Chevy Aveo, ‘a car that did horribly in our testing,’ Fisher says. Some cars that CR found were actually cheaper to own than the Prius - notably the Toyota Yaris and the Chevrolet Aveo - didn’t make the magazine’s ‘value’ list because they received poor marks from Fisher and his fellow testers. Consumer Reports limited its ‘value’ rankings to vehicles that were already on the magazine’s ‘recommended’ list. ‘There’s more to good value than just low cost,’ says Jake Fisher, a Consumer Reports vehicle tester.Īnd here’s another twist. This information is combined with the cost data to arrive at a final score - which is then used to rank vehicles by ‘best value’ as opposed to ‘cost of ownership.’ In addition to ownership costs, Consumer Reports factors in the results of its customer surveys and its own vehicle road tests.
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