Higher used-car prices make new cars attractive

Prices for used cars are surprisingly high, and in some instances it might be less expensive to purchase a new vehicle, according to auto information company Edmunds.com.

One reason is that automakers often subsidize the interest rate on a loan for a new car. Used-car loan interest rates are typically higher.

Edmunds says this scenario plays out for a number of vehicles, including some luxury cars such as an Audi or a BMW. For example, the payment on a manual-transmission BMW 128 coupe would be $506 a month assuming no down payment and a 60-month loan. The payment on a 1-year-old 128 coupe, also without a down payment, would be $534, Edmunds estimated, based on a review of transaction prices and interest rates.

Overall, Edmunds said, the average price of a 3-year-old car is 11.1 percent higher than it was last year, which it called "a remarkably high year-over-year increase."

Used cars of all ages are 5.5 percent more expensive than they were last year. Typically, the year-over-year increase is less than 3.5 percent, Edmunds said.