Buying a new car? Get more for your used one

@Money November 28, 2011: 12:39 PM ET
Buying a new car? Get more for your used one

(MONEY Magazine) -- Got the urge to splurge on a shiny new ride?

Now's your chance to swap your old vehicle for this year's model. Because of used-car shortages and new-car incentives, the price gap between new and used cars has sharply narrowed over the past year.

Two- to five-year-old vehicles jumped 10% in value since a year ago, according to the National Automobile Dealers Association; new-car prices, after deals, are up a mere 2%, says Edmunds.com.

Drying up the used supply are smaller rental-car fleets and individuals' inclination to drive cars longer.

Buying a new car? Send The Help Desk your questions.

Trade-in values are up, especially for newer, fuel-efficient models, reports KBB.com. New-car deals are fueled by Japanese automakers trying to reclaim pre-earthquake market share and U.S. firms unloading gas-hungry stock.

So, for example, a new Toyota Prius costs just 24% more than a two-year-old used one; a year ago, that gap was 48%, according to AutoTrader.com. A new Acura TL is 37% more than a used model, vs. 56% more last year.

For the best trade-in, go to independent used-car dealers itching for inventory, or to dealers for the brand you're selling, not buying; they can unload your auto more easily, says Jonathan Banks, analyst at NADA Used Car Guide. You'll be on your way to new wheels for the new year.  To top of page

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