Tips on Buying Cars: New vs. Used SUV, finance term, mazda protege

Question
I'm looking for a slightly used or a new SUV and I wanted to know if you could point out some of the pros and cons.  I was also interested in finding out what is meant by dealers placing a 2007 vehicle in a "new" category.  Is there drop in the price as there is in a used 2007 vehicle?  I'm looking for something relatively cheap like an Escape.  I plan on putting down between $4000 - $5000 and my credit scores are:  693, 704 and 721.  I have a dead 1998 Mazda Protege to trade in as well, the transmission is no good on it.  Do dealers give rebates and/or incentives on "new" 2007 models?

If there's anything you can think of to help, please let me know.

Thank you

Answer
Hi Landon, You've asked a lot of great questions. A NEW car is considered as a vehicle that has not been previously owned or titled by anyone. This can even include a "demo" that has been used by the dealer for whatever reason, and have a few miles on it. Most manufacturers limit the amount of miles that can be put on a "demo" and still conside it as new. If you don't mind a few miles on the vehicle, a demo is a good way to save some money. A used vehicle is one that has been titled to someone regardless of how many or little miles are on it. Because it is a "used" car, it will usually sell for a little less that a demo. The pros are, you can save some money on the purchase with a slightly USED car, than a New car or a demo. The con would be that you can't order a used vehicle. What you see on the lot is what you get. Your credit score is great, and you will qualify for most manufacturers' better interest rates on their loans and products. Keep in mind that the interest rate a length of finance term is usually better on a new vehicle than it is on a used one. Both Ford and GM have plans in place whereas if the used vehicle is "certified", meaning it has less than the company's maximum allowed  mileage and has been thoroughly inspected by the service department, and no defects found, will offer new car finance rates on that used vehicle. Something else to remember. A vehicles warrantee usually begins when the vehicle is first put in service. (That means from the date it was taken from new status to owned by someone). That in service date will follow that vehicle for ever. So the manufacturer's warrantee on a "used" car will be from the date it was ORIGINALLY put in service. Everyone handles mileage differently. On a new car, usually the warrantee begins with the mileage on the odometer when you accept delivery. So if you purchase a demo as a new car, be clear as to when the warrantee mileage starts. In regard to your trade, it isn't worth a lot of anything. You would get more for it "on the street" than the dealer may give you for it. But I think the difference would be minor on a dead old Mazda. I would take whatever the dealer offers you for it, keeping in mind that what ever you allow for that trade comes off the purchase price, thus you don't pay sales tax on that amount. Let me tell you something in closing that may be the biggest help of all. The rebate on the 2007's should be pretty good now that the 08's are out. Rebates and specials from the manufacturers are transmitted to the dealers usually on a weekly basis. Most dealerships I have been got new incentive, or "rebate" reports on the first part of the week. When you go to the showroom, as the sales manager if any new rebates have been announced. Ask how old the present program is, and do they expect any changes coming soon. Unfortunately, no one can predict if the rates or incentives will improve next week or go away, so don't shoot yourself in the foot if you are confident that you are getting a good deal. Obviously if the factory is offering a 0% interest, with some small cash rebates, the deal probably will NOT get much better. I think you see what I mean here. Best of luck on your new SUV, please let me know how it turns out. Please let me know if there is anything I can assist with.  Thanks for asking---Jim Sears.