Car Buying - Buy Almost-New to Avoid New-Car Depreciation

Since new cars suffer high rates of depreciation in the first year, it is generally better to buy a relatively new car (at least one year old) that has already experienced its greatest loss in value.

Almost-new used cars represent the best values for automotive consumers and offer most of the benefits of new-car ownership at lower cost. Here are some of those benefits:

- Manufacturer's warranty is still in effect. Most new cars have 36 month general warranties, many have 48 months, and a few have 60 months -- all transferable to new owners.

- Manufacturer's new-car rebates and low-interest loans, which are very common, drive the price of used cars down. Almost-new used cars are currently undervalued for this reason.

- Optional equipment and packages on almost-new used cars are generally greatly undervalued, compared to original cost.

- Safety equipment is up to date, and comparable to new cars.

- Less risk of hidden problems than with an older car.

- Many almost-new used cars are lease returns that have been well maintained and cared for.

- Many used car dealers certify almost-new used cars with comprehensive inspections and guarantees.

- Leases are readily available for almost-new used cars, but not for older models.

Careful selection of vehicle make and model can save you money in the long term. Those brands that have traditionally maintained high resale values, such as Honda, BMW, and Lexus, will be your best choice. A relatively low initial purchase price combined with a relatively high sale or trade price a few years later will help to minimize your overall ownership cost.

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Al Hearn is owner and operator of Used Car Advisor, a web site designed for automotive consumers who want to be smart about buying and selling used cars.