If you are looking to buy a used car buy a car at least two to three years old due to the money you will save in depreciation cost. A five-year-old car is nothing nowadays. With modern manufacturing plants and robotic controls, cars are made to last and are over engineered compared to cars in the 80s. You hardly hear about cars popping fuses, alternators failing, etc. Electrical systems and power-plant engineering has improved quite a bit. A lot of that has to do with major manufacturers outsourcing all the R&D to companies like Visteon, Delphi, etc. The automakers can concentrate more on making their cars and helping to avoid any power train issues. When you spend less time developing a new radio and more time developing the engine and other major components, you will have a better product.
Competition between major manufacturers is also on the up. Acura is trying to outdo Lexus and Lincoln is trying to outdo Cadillac. The demand for better cars and nice features is up and automakers are racing to make a better product to outsell their competition. You will see this in the warranties now, as well. Hyundai, which used to be a joke ten to fifteen years ago, is now a “Big Dog” in the auto industry. If you look at the new Sonata compared to what the Sonata was in 1995, it is 100 percent improvement! GM is now offering a 100k mile warranty to compete with Hyundai, Kia and other auto makers. The product must be good for them to do so; otherwise the manufacturer will fold because of warranty repairs.
The majority of cars made after 1996 are very solid and reliable. You can get some great deals for under $5k for cars from 96–99. These are great cars for the most part, but maintenance is the key. Ask for receipts of all repairs, oil changes and tune ups. If a car is well maintained, it will run almost forever, as long as you don’t abuse it.
Recently, a 1998 Cadillac Deville, fully loaded with 145k miles was sold for $3500. This was a $40,000 car, brand new. It was well maintained and had receipts for all the work done to it. It has lost almost all its value and will not depreciate much more in years to come. If you can turn a wrench and fix some issues, go for cars older than five years.
Another great thing is that if you don’t like the car, you can sell it very easily and jump into another one. You will not be able to do that if you buy new car due to the money you will still owe on the loan. Cars depreciate value the most in the first five years than they do at any other time.
A great spot to search for used vehicles is at CarTango. This Web site offers a “Car Soul Mate Survey” so you can find the best car for you. This includes new, used, an SUV or convertible and so forth. An excellent feature on this website is the “Tango” option. You can choose up to three cars at different dealerships and have the dealers compete for your business. Consumers can also send an anonymous message to a dealership to ask any questions they may have. No personal information is required.
Let the dance begin!
Photo courtesy of CarTango