It’s never been more difficult for buyers to find a bargain in the used car market. Fortunately we’ve dug deep into the data to identify 11 worthy late-model cars and SUVs that are truly great deals.
According to the used-car valuation experts at Kelley Blue Book, the average value of a one- to three-year-old used vehicle has increased from $15,000 in 2008 to more than $23,000 in 2011, which amounts to an average boost of nearly 16 percent per year. This is causing an affordability problem among cash-strapped buyers who can’t otherwise afford a new car, which on average costs nearly $30,000 according to the industry research and forecasting company TrueCar.com.
“While the pace of used-car appreciation is likely to subside as supply, and ultimately sales, improve, shoppers in the market for a used car will continue to pay more, making it difficult to buy at a discount.” says Alec Gutierrez, manager of vehicle valuation for Kelley Blue Book.
This situation can be blamed largely on the economist’s old friends, the forces of supply and demand. The industry is currently suffering from a diminished stock of used models on dealers’ lots, just as pent-up demand is bringing buyers back into the market. This lack of inventory is widely attributed to an extended period of slow new-car sales, which resulted in fewer trade-ins, combined with a rollback in new-car leasing between 2008-2010 that would have otherwise yielded two- and three-year-old used models coming off lease. What’s more, over 690,000 used cars — albeit older and less-desirable models — were taken out of the market by the so-called “cash for clunkers” program in 2009.
Analysts predict used car prices will finally begin tapering off, perhaps as early as year’s end, with healthier new-car sales — including those from Japanese automakers recovering from production disruptions because of the earthquake and tsunami in March — helping to refill the supply chain via trade-ins. “Used car prices at the end of the year will still be higher than last year, but not at the levels during the peak in May and June when prices jumped 25-30 percent higher,” says Jonathan Banks, a senior analyst with the National Automobile Dealers Association Used Car Guide.
But that doesn’t mean there still aren’t some advantageous deals to be found in the used-car market. The key here is to find the “best” late-model pre-owned vehicles that, for one reason or another, have lower-than-average resale prices.
Age, condition and mileage largely determine a car’s value in the resale market, but comparable models can still cost more or less than each other because of various market forces. According to Automotive Lease Guide, a vehicle’s value down the road can be affected by something as superficial as a particular make or model’s market perception. Cars initially sold with big cash rebates tend to take a greater hit in terms of depreciation, as do vehicles that have significant fleet sales, which ensures a steady flow of models into the resale market each year.
Our list of Best Used Cars for the Money consists of vehicles from the 2008 model year that received average or above-average scores from the most recent J.D. Power & Associates U.S. Vehicle Dependability Study and boast average or below-average long-term ownership costs as reported by Intellichoice.com. Even so, they all suffer below-average resale values as estimated by Kelley Blue Book, which makes them outstanding deals. Used-car values cited for comparison are based on dealers’ estimated retail prices for three-year-old models in excellent condition, equipped with a typical assortment of features and driven an average 46,500 miles. Actual transaction prices will vary according to a vehicle’s precise condition, exact mileage and a buyer’s negotiating skills.
One caveat: Even the sweetest used car deal can ultimately go sour if the vehicle’s been abused, has hidden damage or was improperly maintained. That’s why it’s always prudent to have a trusted mechanic carefully inspect any used car or truck under your consideration to get an impartial evaluation of its operating condition, especially if you’re buying it from a private party. Particularly in the wake of this year’s devastating floods, be sure to run a model’s vehicle identification number (VIN) through a title-search service like carfax.com to make sure it hasn’t been previously flood-damaged or salvaged and subsequently rebuilt.
2008 Ford Taurus
Ironically, while this accommodating full-size sedan enjoys a top ranking for reliability from J.D. Power & Associates, it’s saddled with poor resale value, which makes it an especially attractive choice as a used car. It comes nicely powered by a 263-horsepower V6 engine that’s mated to a smooth-shifting six-speed automatic transmission. If you live in the Snow Belt, look for models equipped with the optional all-wheel-drive system for top traction. Otherwise, the car delivers a smooth ride with surprisingly lively handling. With an estimated retail price of $14,685-$20,370 for the 2008 version you’ll save quite a bit of money over a comparable Toyota Avalon at $20,200-$26,770.
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2008 Hyundai Accent
Here’s another model that gets top rankings for reliability, but is saddled with rock-bottom resale values. With a retail price in excellent condition estimated at $9,580-$10,705, the subcompact Accent is a good deal compared to models like the Nissan Versa at a projected $11,580-$12,850 and the Honda Fit at $14,030-$15,550. Offered in a choice of sedan or hatchback body styles with only modest features, performance was not the 2008 Accent’s strong suit with only a 110-horsepower engine under the hood, but it boasts admirable fuel economy at 27-city/33-highway mpg.
2008 Buick LaCrosse
This large near-luxury car boasts top reliability with low long-term ownership costs and sells at bargain prices in the resale market. You’ll find the 2008 vintage with either a sufficient 200-horsepower 3.8-liter V6 engine or a more powerful 300-horsepower 5.3-liter V8. While the current model features snazzier styling, the 2008 model gives up nothing in terms of passenger comfort, with a buttery smooth ride. It retails for an estimated $14,765-$19,505, which edges out its closest competitor, the Chrysler 300, at $15,550-$22.865.
2008 Hyundai Elantra
While the previous generation Elantra compact sedan isn’t as expressively styled as the current model, it performs well in most respects and garners top scores for reliability after three years of ownership. A 138-horsepower four-cylinder engine is peppy enough, especially when mated to the standard five-speed manual transmission. The 2008 model is a decent deal with a projected retail price of $11,650-$13,600, versus an estimated $12,510-$16,780 for the class-leading Honda Civic.
2008 Cadillac DTS
They don’t make luxury cars like this any more (literally, as the DTS was discontinued at the end of the 2011 model year). The old-school DTS is big as a boat and emphasizes comfort above all else. A choice of 4.6-liter V8 engines delivers 275 or 292 horsepower, with the car receiving top reliability scores. Look for models equipped with what are still among the latest safety features, including lane-departure and blind-spot warning systems. At an estimated retail price of $22,300 (with little else in the market with which to compare it) it’s a classy ride at a bargain price.
2008 Mitsubishi Galant
The midsize Galant sedan performs admirably, with better-than-average reliability and uncluttered styling that remains fresh. You’ll find model-year 2008 Galants equipped with either a 160-horsepower four-cylinder engine or a smoother and more powerful 258-horsepower V6 in the top Ralliart model. The Toyota Camry might be a more popular choice, but a 2008 Galant is more affordable at an estimated retail price of $12,630-$18,255 versus $15,385-$20,440 for the Camry.
2008 Chevrolet Trailblazer
This midsize truck-based SUV can tackle the toughest trails and tow a decent-sized boat or trailer when properly equipped, which are tasks few of today’s car-based crossovers can accomplish. There’s no shortage of power, with a range of V6 and V8 engines delivering from 285-390 horsepower. Mechanically equivalent to the GMC Envoy, both models were discontinued after the 2009 model year. The 2008 Trailblazer can be found on dealers’ lots in excellent condition for around $17,650-$26,165. Those instead seeking a 2008 Toyota 4Runner will be asked to pay a costlier $25,530-$32,605.
2008 Cadillac SRX
While the current generation of Cadillac’s luxury crossover SUV is smaller and more stylish, the 2008 version holds its own with solid performance from a choice of V6 and V8 engines at 255 and 320 horsepower, and sportier-than-average handling. Its roomy interior can seat up to seven passengers when found with the available third-row seat. With a projected retail price of $26,300-$28,035 you’ll keep a couple thousand dollars in your pocket by choosing a 2008 SRX instead of the Lexus RX350 at $28,500-$30,000.
2008 Dodge Durango
While large truck-based SUVs have largely fallen out of favor, those with a purposeful need for a roomy vehicle with stalwart towing abilities will find the 2008 Dodge Durango to be a godsend. You’ll find dealers asking around $14,685-$23,970 for a three-year-old model in excellent condition versus a projected $24,835-$34,805 for a Chevrolet Tahoe. The Durango’s base 3.7-liter V6 is barely adequate at 210 horsepower; it’s better equipped with either of the available V8s at 303 and 335 horses. This generation ran through the end of the 2009 model year with a similar version sold as the Chrysler Aspen.
2008 Chevrolet Equinox
This pleasant compact SUV is not only capable, coming powered by either a 3.4-liter V6 engine at 185 horsepower or a 3.6-liter V6 with 264 horses, it’s comfortable, with a back seat that can slide fore or aft to maximize legroom or cargo space. A similar model was sold as the Pontiac Torrent. It’s a better deal than the import competition, with an estimated retail price of $17,050-$22,805 for a 2008 model versus around $18,785-$23,635 for a similar Toyota RAV4.
2008 Hyundai Sonata
While Hyundai is at the top of its game right now with the current-generation Sonata, there’s still a lot to like about the previous generation of this midsize sedan, particularly if you find one with the smooth and powerful 234-horsepower 3.3-liter V6 engine. A 2.4-liter four-cylinder with a sufficient 162 horses was otherwise standard with the 2008 model. You’ll find it packed with features at an affordable price, which is pegged at about $13,115-$16,635 at retail in excellent condition. By contrast, dealers will ask a steeper $17,975-$19,635 for a 2008 Nissan Altima.
Jim Gorzelany is author of the "Automotive Intelligentsia 2011-2012 Sports Car Guide."
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