10 Used Cars to Check Out Before Buying New
NEW YORK (MainStreet) -- Amid all the economic turmoil of the past few years, Americans apparently became the car-buying equivalent of high school seniors working at the Tastee Freez.
The best car of the era, it seems, is one that got you from place to place reliably, cost little to own or maintain and could darken the driveway until such time as its owner needed to replace it or could afford better. An inexpensive car more than a decade old was considered a jalopy half a century ago, a hoopty in more recent decades and a beater in certain circles, but is known as just "the car" in American homes today.
Automotive data service Polk revealed last month that the average age of cars and light trucks on U.S. roads is 10.8 years. That's up from 8.9 years a decade ago and 9.8 as recently as 2007. New car sales slumped during the 2008 and 2009 recession years as America's drivers squeezed as much mileage out of their old cars as possible rather than risking a large investment.According to Manheim Consulting's Used Vehicle Value Index, used car prices are just 1.6% off their highest level since the index was introduced in 1995. Dwindling new car supply and used car lots already depleted of 2- and 3-year-old vehicles by the recession have driven prices up 0.6% from last January as sales increased 5% in 2011 and more than 10% from 2010. That's making a lot of formerly undesirable older vehicles a lot more popular. Manheim found that the average selling price for a compact car is 5.1% higher than it was a year ago. If owners are looking to sell their old Toyota (TM) Camry, Honda (HMC) Accord or Ford (F) Fusion, Manheim says they'll make 4.7% more on the deal than they would have last January. Even used pickups and vans have benefited as demand accelerated 0.7% and 2.7% respectively within the past year. Just about the only vehicles not speeding off the lots are fuel-inefficient SUVs. Their value has dropped 4.8% year over year as smaller crossovers sip their gasoline more slowly. While Polk says American car buyers are regaining their confidence, they're also learning the value of an older, cheaper, equally reliable vehicle. Considering the advanced age of the average American car, we asked the folks at Kelley Blue Book to see what decade-old models should factor into car buyers' decision-making this year. They came back with an extremely flush selection of 20 vehicles. "The average age of vehicles on the road today has been increasing not only due to improvements in the quality of vehicles produced in the last 10 years but it has also been driven up by the sharp reduction in new vehicles sales since 2009 reducing used vehicle supply," says Alec Gutierrez, Kelley Blue Book senior market analyst. "Since we expect the supply of used vehicles to remain limited through at least 2012, these vehicles are likely to depreciate only minimally as time goes on." The list focuses on model year 2002 used vehicles with a Kelley Blue Book Private Party Value of less than $10,000. The vehicles listed are assumed to be in good condition with approximately 118,000 miles, as per Kelley Blue Book's mileage depreciation schedules. The list was further reduced by focusing only on those vehicles KBB expects to require minimal maintenance based on their proven reputation for reliability. To eliminate certain redundancies, we've pared that list to 10 decade-old cars worth considering before buying new. They may have some wear on the tires, but consensus is that each of the cars on the list should be able to hit or break 200,000 miles with a minimal amount of maintenance:
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV