For many Americans in these challenging economic times, buying a new car just isn't an option: The budget simply doesn't contain room for it.
But for those who need a new set of wheels, there's a way around that problem: It's possible to purchase a used vehicle and actually be in a better position, both financially and from a vehicle value standpoint. The trick is buying a superior-quality, late-model used vehicle -- a vehicle that is operationally and aesthetically comparable to a new model, but that sells for a substantially lower price.
Obviously, it takes a little work to find these gems, but you're in luck: We've already done the research. Listed below are three, late-model used vehicles -- an SUV, sedan, and a luxury sedan -- that will provide you with near-new-car service, without that painful new car price. Keep one of these vehicle properly maintained, washed and waxed, and your neighbors will think you're tooling around in a new vehicle. Heck, you may even fool yourself.
(Note: The 2006 and 2008 prices assume each vehicle has about 50,000 miles on it.)
2006 Toyota RAV4 Limited 4WD 6-cylinder
2006 manufacturers' suggested retail price (MSRP): $21,500.
2006 National Association of Auto Dealers (NADA) average retail price: $18,800.
Many know about the Toyota (TM) RAV4's multifunctional characteristics, including its larger-than-meets-the-eye cargo area, but despite weighing only about 2,600 pounds, the RAV4 also rides almost like your father's old Buick or Oldsmobile, and handles very well. The 6-cylinder version has superior acceleration. The RAV4 may be the best late-model used vehicle value in the smaller SUV category, and Toyota's superior craftsmanship means that with normal maintenance, you can count on it performing well for at least another 100,000 miles.
2006 Nissan Altima SL 4-Door 6-cylinder (non-hybrid), automatic transmission
2006 MSRP: $17,750.
2006 NADA average retail price: $14,650.
The 2006 was the last model year made before the Nissan (NSANY) Altima's fourth-generation remake in 2007, and offers superior acceleration (0 to 60 miles per hour in about 6 seconds), excellent handling, and a responsive 5-speed manual transmission or a 4-speed automatic. However, you'll have to go with the 3.5-liter (214 cubic inch), 6-cylinder version to get the aforementioned acceleration. The Altima seats four people comfortably, and its 20-gallon gas tank combined with its strong fuel economy (18 mpg city, 25 mpg highway) means you can drive halfway across your time zone before you need to fill up.
2008 BMW 750Li 4-Door
2008 MSRP: $76,800.
2008 NADA average retail price: $45,075.
The BMW 7-series is known as a "surplus wealth vehicle" because the new models annually transfer surplus wealth from adults to the bank accounts of BMW (BAMXF) and auto dealerships. New 7-series vehicles are both over-engineered and overpriced, which accounts for much of the massive depreciation they take after just a few years on the road. That said, few cars offer the combined ride, acceleration, and handling characteristics of the stately 7-series, and this car has every option conceivable, including seven air bags, traction control and a parking aid. The key to the BMW experience? Buy a nicely-maintained 3-year-old or 4-year-old model. Odds are, you won't notice a performance difference between the used and the new models, and you'll save $30,000, or more.
Take the first steps to building your portfolio.View Course »